Lincoln National Life Insurance v. Sobel

ON PETITION FOR REHEARING. On a petition for rehearing in this cause, the appellee, in addition to vigorously asserting that the notice provision, as set forth in clause 12 of the policies in suit, required notice of cancellation subsequent to the 7th day of August, 1933, contends that this court by its original opinion held that the above notice provision of the policies was required in said policies notwithstanding the fact that the assured was a substandard risk.

The original opinion admits, and the record indisputably shows, that the assured in the instant case was a substandard risk. The opinion does not state, and we do not hold, that the notice provision as set forth in clause 12 of the respective policies was a required provision of the statute. While the appellant, in its brief on petition for rehearing, contends that the notice provision for cancellation as required by the statute is applicable to both standard and substandard risks, we think the contention of appellant in this respect is unsound. Clause 13 of the Acts of 1925, ch. 195, p. 466, specifically exempts insurance companies from the obligation to include in their policies a notice provision for cancellation, such as involved in this case, where substandard risks are insured.

If we are correct in holding, and we think we are, that a compliance with the notice provision required by statute is met by giving notice thirty days prior to the date on which 17, 18. the cash value and the indebtedness become equal, we can find no sound logic for holding that a notice provision in substantially the same language as that set forth in the statute should require a different interpretation where the insured is a substandard risk. A voluntary inclusion of the notice provision in a contract covering a substandard risk is solely for the benefit of the insured. Having adopted substantially the language of the statute, we find no reason requiring a different construction of such notice provision even though we admit the existence of ambiguity in the language of the notice provision. The language in the statute concerning the notice provision was not the language of the insurance company, but the language of the Legislature; and the insurance company is not responsible for the ambiguity. Neither is it to be penalized, under such circumstances, by the general rule that when insurance contracts are so drawn by the company as to be ambiguous, and subject to different reasonable interpretations, courts will adopt that construction most favorable to the insured. To so hold would require separate interpretations of the same identical language.

The appellee insists on a more favorable construction of the notice provision on the substandard risk in these policies because of the fact that a substantially larger premium was charged the insured. It is our opinion that this argument is more ingenious than sound. The assured and the beneficiary who paid all of the premiums that were paid were equally cognizant of the character of the risk involved; and the beneficiary, knowing the facts, was especially warned of the hazard and the necessity for prompt payment of the premiums and policy loan premiums if the policies were to be kept in force.

The appellee also contends that this court in its original opinion went outside its authority and weighed the evidence with respect to waiver by course of conduct on the part of 19, 20 the insurance company. Of course, it is elemental that this court will not weigh conflicting evidence, nor will it deny the fact finding body the right to draw reasonable and legitimate inferences from the facts established by the evidence. We think a reading of the original opinion does not justify appellee's criticism. The competent facts in this case offered by appellee to prove waiver by course of conduct have all been carefully traversed; and the original opinion holds, and we reaffirm that holding, that there are no facts established showing a waiver by the insurance company by course of conduct; and instead of different inferences to be drawn from the facts established, there is but one conclusion reasonably deducible from such facts, and consequently no question for the jury to decide. Upon a motion for a new trial, it was not only the prerogative, but the duty of the trial court to determine whether there was any evidence sufficient to establish a waiver by course of conduct; and upon appeal, it is the duty of this court, when the question is properly presented, to render a decision upon the same issue. We find no reason for coming to a different conclusion than we did in the original opinion. In addition to the case of Baxter v. Metropolitan Life Ins. Co. (1925), 318 Ill. 369, 149 N.E. 243, the following cases are in point on the question last discussed: Padgett v. Cunningham (1930), 156 S.C. 356, 363, 153 S.E. 280; Gen. Elect. Co. v.N.K. Ovalle, Inc. (1939), 335 Pa. 439, 6 A.2d 835;Cummings v. Conn. Gen. Life Ins. Co. (1930), 102 Vt. 351, 148 A. 484.

In the case of Padgett v. Cunningham, supra, the court said:

"As a general rule, the question of estoppel is one for the jury, but, where the facts relied on to invoke it are undisputed, as here, it is a matter for the Court."

Language of a similar character is found in the other two cases last cited. Having given careful attention to all of appellee's contentions as set forth in his petition for a rehearing, and ably briefed, we are of the opinion that the petition for rehearing in this case should be denied, and it is so ordered.

Stevenson, J., dissenting.