Mitchell v. Pennsylvania Mutual Life Insurance ( 1927 )

TREXLER, J., dissents.

Argued March 8, 1927. The policy of life insurance on which this action of assumpsit was based contained, inter alia, two clauses:

"INCONTESTABILITY. This policy, together with the application therefor, a copy of which is attached to this policy and made a part hereof, constitutes the entire contract between the parties, and shall be incontestable after two years from the date of its issue, except for non-payment of premiums and for engaging in military or naval service in time of war without the consent in writing of an executive officer of the Company and except for death incurred in the violation of the laws or in consequence of the insured's own criminal act."

"MISSTATEMENT OF AGE. If the age of the insured has been misstated the amount payable under this policy shall be the amount of insurance which the premium paid would have secured at the correct age of the insured."

The policy was issued on December 6, 1915. The insured died on June 2, 1925, with premiums fully paid, so that the clause as to the incontestability of the policy was in effect.

The defense set up in the affidavit of defense was that the insured had misstated his age; that he had represented in his application for insurance that he was born on August 16, 1866, and would be 50 years old on his next birthday, whereas defendant was informed and believes that he was then in his 65th year; that it was and is the rule and custom of the defendant company not to insure anyone who is over 60 years of age at the time of application and that the said insured knew of that rule and custom and therefore said policy was void; and that under the clause above quoted relative to misstatement of age, the amount which would be payable under the policy is $445.85 and no larger amount could be due the plaintiff.

The learned court below entered judgment for the plaintiff for the amount of the policy, for want of a sufficient affidavit of defense, holding that as the affidavit alleged that sixty years was the insurable age limit of the company, and so the premiums paid could not have purchased any insurance at the true age, it did not involve a mere matter of reduction but a contest of the entire amount, which the clause relating to incontestability prohibited. No reference was made in the opinion to the averment in the affidavit that under the clause relative to misstatement of age the amount which would be payable under the policy was $445.85, and no larger amount could be due the plaintiff.

In our opinion the two clauses of the policy above quoted are not necessarily incompatible. There would be no conflict provided the policy set forth the premium rates applicable to the different ages. In such event, if the insured has misstated his age, the contract is to pay the amount of insurance which the premium paid would have purchased at the true age of the insured and is incontestable within the meaning of that term, (Central Trust Co. v. Fidelity Mut. Life Ins. Co., 45 Pa. Super. 313; Feierman v. Eureka Life Ins. Co., 279 Pa. 507), for that amount: Doll v. Prudential Ins. Co., 21 Pa. Super. 434; Hall v. Mut. Res. Fund Life Assn., 19 Pa. Super. 31,34, 35. But this amount must be determined from the policy itself, for the clause relating to incontestability provides that the policy (including the attached application) constitutes the entire contract between the parties. Neither of the parties is permitted to go outside the policy to some other source, or some other company, to calculate the insurance which the premium paid would have purchased at the insured's correct age. The clause in the affidavit which alleged this amount to be $445.85 is not based on the policy nor on the company's established rates of premium and is accordingly of no effect, and insufficient to prevent judgment.

The judgment is affirmed.

TREXLER, J., dissents.