Weil v. Travelers' Ins. Co.

The law is settled that a contract of life insurance issued to one who has an insurable interest in the life insured is a valid and enforceable contract. Helmetag's Adm'r v. Miller,76 Ala. 183, 52 Am. Rep. 316; Alabama Gold Life Ins. Co. v. Mobile Mutual Ins. Co., 81 Ala. 329, 1 So. 561; Troy v. London,145 Ala. 280, 39 So. 713. As observed by Mr. Justice Holmes of the United States Supreme Court:

"Life insurance has become in our day one of the best recognized forms of investment and self-compelled saving." Grigsby v. Russell, 222 U.S. 149, 32 Sup. Ct. 58,56 L.Ed. 133, 36 L.R.A. (N.S.) 642.

Assuming, therefore, for the sake of argument, that the beneficiary named in the policy had an insurable interest in the life of the insured, the contract was not void as contravening public policy, but valid, and, after its maturity, enforceable. The legal effect of the defense asserted by the defendant's plea, to wit, the conviction and legal execution of the insured for murder, is not that the policy is void, but that it has not matured. Otherwise stated, "death at the hands of the law" is not a contingency within the contemplation of the parties that operated to mature the contract so as to authorize an action thereon.

While the policy does not in terms exclude this cause of death as a risk assumed, the law on grounds of public policy, according to the contracting parties innocent and legitimate intentions, excepts this risk and excludes this contingency, as one not within the contract operating to mature it. Amicable Society v. Boland, 4 Bligh, N. R. 194; Supreme Commandery, etc., v. Ainsworth, 71 Ala. 436, 46 Am. Rep. 322; Ritter v. Union Central Life Ins. Co., 169 U.S. 139, 18 Sup. Ct. 300,42 L.Ed. 693; Burt v. Union Central Life Ins. Co., 187 U.S. 362,23 Sup. Ct. 139, 47 L.Ed. 216; Id., 105 Fed. 419, 44 C.C.A. 548; Mutual Life Ins. Co. v. McCue, 223 U.S. 234,32 Sup. Ct. 220, 56 L.Ed. 419, 38 L.R.A. (N.S.) 57; Collins v. Metropolitan Life Ins. Co., 27 Pa. Super. 353 ; Sophia Davis v. Supreme Council, Royal Arcanum,195 Mass. 402, 81 N.E. 294, 10 L.R.A. (N.S.) 722, 11 Ann. Cas. 777.

If the policy in terms insured the life against the contingency of the insured committing murder and being convicted and executed therefor, the contract would be void:

"Death, the risk of life insurance, the event upon which the insurance money is payable, is certain of occurrence; the uncertainty of the time of its occurrence is the material element and consideration of the contract. It cannot be in the contemplation of the parties that the assured, by his own criminal act, shall deprive the contract of its material element; shall vary and enlarge the risk and hasten the day of payment of the insurance money." Supreme Commandery, etc., v. Ainsworth, supra; Ritter v. Union Central Life Ins. Co., supra; Burt v. Union Central Life Ins. Co., supra; Hatch. v. Mutual Life Ins. Co., 120 Mass. 550, 21 Am. Rep. 541.

The appellant insists that the doctrine announced in the Ainsworth Case, supra, cannot be applied to this case, because suicide by the insured is the voluntary and intentional taking of his own life, while the execution of the insured for crime is involuntary. The principle on which the defense is allowed is the same in both cases; the act committed by the insured resulting in his death, whether suicide or murder, is felo de se (McMahan v. State, 168 Ala. 70, 53 So. 89), and to allow either as a risk within the contract — the contingency operating to mature it — would have a tendency to remove one of the restraints operating on the mind against the commission of crime, to wit, the interest of the insured in the welfare of those dependent upon him (Amicable Society v. Boland, supra; Collins v. Metropolitan Life Ins. Co., supra; Mutual Life Ins. Co. v. McCue, supra).

If the law allowed a man by insuring his life to provide for the welfare of his loved ones and those dependent upon him, under certain conditions he might be willing to wreak vengeance upon his enemy and take his chance of escaping the penalty of the law; and likewise, if he could so provide for those dependent upon him, he might, under some circumstances, take his own life to avoid the burden of living. Life is not man's to destroy at will, and to do so except in defense of one's own life or person is a violation of law, both human and divine, and public policy forbids that the natural restraints against such crimes be made the subject of contract. Helmetag's Adm'r v. Miller, supra; Collins v. Metropolitan Life Ins. Co., supra.

It is strenuously insisted that the constitutional provision, "That no person shall be attainted of treason by the Legislature; and no conviction shall work corruption of blood or forfeiture of estate" (Const. 1901, § 19) — cuts off the defense that the insured was executed for crime, in that it saves to his estate all classes of property, and life insurance, being a recognized species of property, is within its protection. The statement of appellant's counsel in original brief, paragraph II, p. 8, is a complete answer to this contention:

"The contract sued on is not one payable to the insured or his estate; neither is it payable to his heirs; nor was it even held by the insured or any one claiming directly through him."

And we might add, nor does it affirmatively appear from the record that the insured or his estate ever had any interest in or claim to the policy. The manifest purpose of this provision of the Constitution was to inhibit legislative convictions for crime by bills of attainder, and to prohibit the forfeiture to the government of the estate of persons convicted as a punishment for crime. 9 Cyc. 871 (II, A, 3); 4 Cyc. 887; Cummings v. Mo., 4 Wall. 323, 18 L.Ed. 356; Drehman v. Stifle, 8 Wall. 601, 19 L.Ed. 508; Fletcher v. Peck, 6 Cranch, 138,3 L.Ed. 162; Cooper v. Telfair, 4 Dall. 18, 1 L.Ed. 721; Mayfield's Constitution, p. 16. The question here is: Is death at the hands of the law a contingency within the contract of insurance that gives the holder thereof the right to demand payment? This question we have answered. We do not doubt that it is within the competency of the Legislature to enact a statute that will cut off the right of an insurer to make this defense — may provide that contracts of insurance against such contingencies are valid and enforceable contracts. Whitfield v. Life Ins. Co., 205 U.S. 489, 27 Sup. Ct. 578,51 L.Ed. 895.

Appellant also insists that, when the insurer consented to the transfer of the policy and thereafter accepted payment of the premiums thereon, a new contract was created between the parties which cannot be affected by any act of the insured. This question is fully answered in McCue's Case, in these words:

"It is contended that, if the McCue estate cannot recover, the innocent parties, his children, will be admitted as claimants. To this contention, we repeat what we have said above, the policy is the measure of the rights of everybody under it, and, as it does not cover death by the law, there cannot be recovery, either by McCue's estate or by his children." Mutual Life Ins. Co. v. McCue, supra.

The Massachusetts court holds:

"It is true, as is said in some of these cases, that the insured cannot deprive a beneficiary of his rights by his subsequent misconduct. But it is equally true that, if the original contract impliedly excepts from its provisions cases of death by suicide, and if that is its true construction when considered in reference to the beneficiary as well as in reference to the insured, there is no more liability to the beneficiary for such a death than there would be to the executor or administrator of the insured." Davis v. Supreme Council, Royal Arcanum, supra.

The breach of the contract by failure to pay after maturity by proof of death in a manner within the contract is the sole foundation of liability, and, unless liability can be thus shown, the plaintiff cannot recover. Pollak v. Winter, 166 Ala. 255,51 So. 998, 52 So. 829, 53 So. 339, 139 Am. St. Rep. 33; s. c., 173 Ala. 550, 55 So. 828.

The "incontestable clause," by its very terms, is dependent upon the maturity of the policy in a manner within the contemplation of the parties at the time the contract was entered into. It provides:

"If this policy matures after the expiration of the said two years, the payment of the sum insured shall not be disputed," provided, of course, the premiums have been paid at the time and place mentioned in the policy.

As we have shown, the policy has not matured, and, because of the legal execution of the insured, the contingency or event necessary to mature it can never happen; therefore, waiving the question of the competency of the parties by such clause to cut off the right of the insurer to make this defense, it is clear that the clause in question does not have this effect. To illustrate, suppose the insured were still living; the contingency operating to mature the policy, to wit, the death of the insured in a manner within the contemplation of the contract, could not be said to have occurred. Would this clause operate to cut off the right of the insurer to show that the insured was living, that the death of the insured, the event maturing the policy, had not occurred so as to authorize the plaintiff's action? It is too clear for argument that it would not. And it is equally logical to assert that, if the insured came to his death as a result of criminal conduct on his part not contemplated by the contract, this clause in the policy is no obstacle to showing this in defense of an action on the policy. What we hold is that the clause in this policy is so worded that it reserves to the insurer the right to show that the contingency fixing the maturity of the policy has not happened. This identical clause was involved in Ritter's Case, and the defense of suicide was allowed (169 U.S. 153,18 Sup. Ct. 300, 42 L.Ed. 693). We do not hold that, by a clause differently worded, a policy may not be made incontestable after the lapse of a specified time. Many courts have so held. Sun Life Ins. Co. v. Taylor, 108 Ky. 408, 56 S.W. 668, 94 Am. St. Rep. 383; Clement v. New York Life Ins. Co., 101 Tenn. 22,46 S.W. 561, 42 L.R.A. 247 and note, 70 Am. St. Rep. 650. These principles justify the ruling of the trial court in sustaining the defendant's plea against demurrer, and in holding that the several replications aside from the seventh were not sufficient to avoid this defense.

When the sufficiency of the seventh replication is tested by the application of the familiar rule that a pleading on demurrer must be construed most strongly against the pleader and that, when thus construed, its averments must be precise, excluding all ambiguity of meaning and all intendments — in other words, that if, allowing the averments to be true, yet a case may be supposed consistent with it which would render the facts stated inoperative as an answer, it will be pronounced insufficient (Scharfenburg v. Town of New Decatur,155 Ala. 654, 47 So. 95) — it is clear that the facts set up in the replication are not sufficient to operate as an estoppel against the defense pleaded. The defect lies in the absence of an averment showing that the plaintiff was the beneficiary named in the policy, or that she had an insurable interest in the life of the insured, a burden which the law places upon her. The averment in the replication is "that said policy from the time of its issuance was the property of plaintiff's husband and plaintiff." If the plaintiff had been named in the policy as beneficiary, it would be assumed, in the absence of a contrary showing, that she had an insurable interest in the life; but, when the claim is made otherwise than by the beneficiary named, it is essential that the claimant show an insurable interest. Troy v. London, 145 Ala. 280,39 So. 713; Alabama Gold Life Ins. Co. v. Mobile Mutual Life Ins. Co., 81 Ala. 329, 1 So. 561; Stoelker v. Thornton,88 Ala. 241, 6 So. 680, 6 L.R.A. 140. In the absence of such showing, the entire transaction will be condemned as a wager and against public policy. Helmetag's Adm'r v. Miller,76 Ala. 183, 52 Am. Rep. 316; Culner, Trustee, v. Guyer, 129 Ala. 607,29 So. 779.

We are not prepared to say that if this replication had shown that the plaintiff had an insurable interest in the life of Jones, and that the alleged agent was acting within the scope of his authority, the conduct of such agent set up in the replication would not operate as an estoppel. Richards v. Shepherd, 159 Ala. 663, 49 So. 251; Auerbach v. Pritchett,58 Ala. 451; Meyer v. Mitchell, 75 Ala. 480; Firestone v. Firestone, 49 Ala. 128; Cardwell v. Kelly, 95 Va. 570,28 S.E. 953, 40 L.R.A. 240. As we have shown, assuming that the beneficiary named in the policy had an insurable interest in the life insured, the policy is not void on grounds of public policy; from its inception it was a valid contract, and is only avoided by the fact of the insured's coming to his death in a manner not covered, and which could not be covered by the contract, thus rendering the event necessary to mature the policy impossible of occurrence. Therefore it is not unreasonable to argue that, after the insured was convicted and sentenced to death, the insurer, by conduct which induced the holder of the policy with an insurable interest in the life to part with value on the faith of the promise that in the event of execution the policy would be paid, is estopped from pleading that the policy has not matured. The crime is a past fact, and the accused has been convicted and sentenced to death, and there is nothing in the transaction on its face contravening public policy. However, this question is not now presented, and we do not commit ourselves to this view. But when the transaction relied on as an estoppel is itself condemnable as a wager, it will not be recognized by the courts as a basis of estoppel. 29 Am. Eng. Ency. Law (2d Ed.) 1107; 40 Cyc. 255.

We find no error in the record, and the judgment of the circuit court is affirmed.

Affirmed.

On Rehearing.