Mutual Life Ins. Co. of New York v. Lovejoy , 203 Ala. 452 ( 1919 )

This is the second appeal in this case. See report of case on former appeal, 201 Ala. 337, 78 So. 299, L.R.A. 1918D, 860, for statement of case.

The record on this appeal differs from that on the former to the extent that the agreement in the application for reinstatement is now shown to be a part of the policy in such manner and form as to meet the requirements of section 4579 of the Code, as construed in Gee's Case, 171 Ala. 435, 55 So. 166; Satterfield's Case, 171 Ala. 429, 55 So. 200; and Allen's Case, 174 Ala. 511, 56 So. 568.

The reinstatement of the policy or contract of insurance did not have the effect of creating a new contract of insurance, dating from the time of the renewal. It had the effect only of continuing in force the original contract of insurance, which would, under its terms, have terminated and become void if it had not been reinstated in the manner and within the time provided in the original contract.

This right to renew, or to reinstate the original contract, after a breach of some of the conditions by the insured — that is, a failure to pay premiums at times named — was a part of the original contract, and, after it was so renewed or reinstated in accordance with the original contract of insurance, the original contract was binding and of force as to each party just as if there had never been a breach, a renewal, or reinstatement. The original policy then stood as if there had never been a failure to pay to any of the premiums when due, or any cause for forfeiture of the original.

On the former appeal, we declined to follow that line of cases which treat a renewal or reinstatement of a contract after breach as a new contract and a forfeiture of the original. We approve and follow the line of cases which hold that the renewal or reinstatement is a mere continuance of the old or original contract which, but for the renewal or reinstatement, would have been forfeited and void. Silliman v. Ins. Co., 131 Tenn. 303, 174 S.W. 1131, L.R.A. 1915F, 707, and note, which cites and reviews many cases. Of course, the facts and circumstances in each case are somewhat different, the terms of the original policies were different in many of the cases, and so were the provisions as to renewals or reinstatement.

Under the facts and circumstances of this case, we hold that the policy in force when the insured died was, in effect, the original policy made with the insurance company, and the time intervening between the making of the contract and the death of insured is the time from the date of the original policy to the date of his death.

The insurance company pleaded several special pleas, setting up the suicide clause of the policy of insurance — to which plaintiff replied setting up the nonforfeiture clause. To these replications defendant attempted to rejoin by stating its conclusions as to the legal effect of the application for renewal or reinstatement, and of the acceptance by defendant of the application. The pleas, replications, and rejoinders must be construed in reference to the complaint, the insurance policy, the application, and renewal, which were made parts thereof. So construing them, the trial court ruled correctly as to the demurrer thereto, and as to instructions to the jury. To these special rejoinders the court sustained demurrers. The trial was had on an agreed statement of facts, and resulted in judgment for plaintiff, and defendant prosecutes this appeal.

It would serve no good purpose to again discuss the questions raised on this appeal. The main question, and the one which controls the rights and liabilities of the parties, viz., the effect of the nonforfeiture clause of the contract of insurance, has been several times considered by this court, and has been decided both ways. There has been and is now a difference of opinion among the justices of this court on the question, as may be seen from the opinions in this case on former appeal. 201 Ala. 337, 78 So. 299 et seq., L.R.A. 1918D, 860.

This court has since that decision reaffirmed and followed the rules of law and construction in the majority opinion on that appeal, and we are not yet convinced of its error, and again adhere to it. It may not be out of place, however, to here repeat in part what we hold:

"Without either affirming or denying that suicide while sane is a crime, or that it is not within the risk of a life insurance policy unless expressly so provided, or that, if so provided, the provision would be void as against public policy, we hold that the object and effect of the incontestable clause is to prevent any such questions from arising, or being set up by the insurer as a defense to an action on the contract, after the death of the insured. We fail to see why such a clause or provision is not valid, or why the courts should not enforce it. We cannot presume, in the absence of proof, that either party to the contract intended to violate the law, or to make a contract against public policy. If parties to an insurance contract or any other contract should attempt to incorporate a provision in violation of a statute or against public policy, the attempt would fail; the contract would be void, and would not be enforced by the courts. The contract of insurance here sued upon, on its face shows no such attempt on the part of either party."

The cases following the above rule are Ex parte Weil,201 Ala. 409, 78 So. 528; Knights of Pythias v. Overton, ante, p. 193, 82 So. 443.

Affirmed.

McCLELLAN, SAYRE, SOMERVILLE, and THOMAS, JJ., concur.

ANDERSON, C. J., and GARDNER, J., dissent, relying on opinion on former appeal.

On Rehearing.