Wilson v. Equitable Life Ins. Co.
| Decision Date | 24 September 1935 |
| Docket Number | 42997. |
| Parties | WILSON v. EQUITABLE LIFE INS. CO. |
| Court | Iowa Supreme Court |
Appeal from District Court, Ringgold County; H. H. Carter and George A. Johnston, Judges.
Suit on an insurance policy for total and permanent disability benefits. In the second division of the answer the defendant pleaded false and fraudulent representations in the original application for the insurance. A demurrer was sustained to this division of the answer, and defendant appeals.
Affirmed.
In action on life policy for disability benefits, defense of fraud and misrepresentation in original procurement of policy by insured was not available to insurer as defense where right to contest validity of policy on ground of fraud and misrepresentation was not reserved in incontestability clause of policy.
Phineas M. Henry, of Des Moines, and Beard & Beard, of Mount Ayr, for appellant.
Frank F. Wilson, of Mount Ayr, for appellee.
On the 6th day of February, 1925, a written contract of insurance was entered into between the plaintiff and the defendant. This policy covered not only insurance on the life of the plaintiff, but provided for total and permanent disability benefits. This policy was the basis of plaintiff's cause of action.
In the second division of the defendant's answer it was pleaded that certain false and fraudulent statements were made in the application on which the policy was issued; that defendant relied on the truth of such statements, and that the same were untrue; that the defendant would never have issued the policy with the disability benefits had it known that these statements were untrue. To this division of the answer plaintiff demurred, stating, among other grounds, that in paragraph 2 of said policy, referring to benefits, it was provided:
It is therefore contended that the matters set out in the aforesaid division 2 of the answer are foreclosed and not available to the defendant as a defense. This gives rise to the only question involved in this appeal.
Paragraphs 14 and 15, referred to in the above division of the policy read as follows:
" 14. Total and Permanent Disability Benefits .
Whenever the Company shall receive due proof, during the continuance of this policy and before default in payment of premium or within sixty days after such default, that the insured has become totally disabled by bodily injury or disease, after the delivery of this policy and before its anniversary nearest the insured's sixtieth birthday, so that he will thereby be permanently, wholly and continuously prevented from engaging in any occupation whatsoever for remuneration or profit, and that such disability has then existed for not less than sixty days, the Company will thereupon grant the following benefits:
(a) Waiver of premium.
On each anniversary during the continuance of such disability commencing with the anniversary of the policy next succeeding the receipt of such proof, waive payment of the premium for the ensuing policy year.
(b) Monthly income.
Pay to the insured, with the written consent of the assignee, if any, a sum equal to $10 for each $1,000 of the face amount of the policy (excluding dividend additions) as shown on the first page hereof and a like amount each month thereafter during the continuance of such disability until the maturity or surrender or expiration of this policy.
The face amount of the policy shall not be diminished on account of any premium waived or disability income payment made, nor shall such waived premiums or income payments be deducted in any subsequent settlement of the policy, and the loan and cash surrender values will be the same as if each premium waived had been paid in cash when due.
The provisions of paragraphs 11, 12 and 13, ‘ Dividends and How Applied,’ ‘ Paid-up and Endowment Options,’ and ‘ Privilege to Change to other Forms,’ shall be inoperative in the event of the total and permanent disability of the insured.
Misstatement of Age .
In case the age of the insured has been misstated the amount of the disability income payable hereunder shall be such as the premiums actually paid therefor would have purchased at the correct age.
Recovery from Disability .
The Company may at any time and from time to time, but not oftener than once a year, demand due proof of such continued disability and upon failure to furnish such proof, or if it appears that the insured is no longer wholly disabled as aforesaid, and no further premiums shall be waived nor income payments made.
Specific Causes .
In addition to and independently of all other causes of total and permanent disability, the entire and irrecoverable loss of the sight of both eyes or the severance of both hands at or above the wrists, or of both feet at or above the ankles, or the similar loss of one hand and one foot, shall be considered as constituting total and permanent disability within the meaning of this contract.
15. Discontinuance of Disability Benefits .
The provisions for the Disability benefits herein set forth and the Special premium therefor stated on the first page of this policy shall terminate:
(a) Upon the anniversary of the policy nearest the sixtieth birthday of the insured, but in no event shall the special premium extend beyond the date stipulated on the first page hereof; or
(b) In the event that the insured shall engage in military or naval service in time of war, or as a civilian shall engage in Red Cross service or other relief work in connection with actual warfare, or shall participate in aeronautic or submarine operations; or
(c) At any time on the written request of the insured accompanied by the policy for endorsement."
It is insisted by the defendant that it has a right to make the defense set out in said division 2, because such matters are not excluded by the aforesaid incontestability provision.
It is, of course, fundamental that insurance contracts prepared by the companies are to be strictly construed in favor of the insured where there is ambiguity in the language used. On the other hand, it is equally well-settled that if there be no ambiguity in the contract there is no right or duty on the part of the court to write a new contract of insurance between the parties. We elaborated this doctrine quite fully in the case of Jones v. Hawkeye Commercial Men's Association, 184 Iowa, 1299, 168 N.W. 305, 11 A.L.R. 380. Or, to state the matter in another way, where the contract is clear and understandable, the aforesaid rule of construction has no application. The first question, therefore, is whether or not it can be ascertained from the language used what the intent of the parties was, and if so, no rules of construction are necessary.
Referring now to the incontestability clause, it will be noticed that the policy is incontestable after one year from the date of its issuance, except (1) for nonpayment of premium, and (2) as provided in paragraphs 14 and 15 relating to disability benefits. With the first ground just stated we are not concerned. The question is on the second ground. Analyzing this sentence, the policy was made incontestable except " as provided in paragraphs 14 and 15." Passing the question of nonpayment of premium,...
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