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(263 U. S. 167, 68 L. ed. —, 44 Sup. Ct. Rep. 90.) claim;” and, specifically applying it otherwise, to say so in plain terms. to that provision, the court conclud- Not having done so, it must accept ed: “And so the date of the last the consequences resulting from the work done, or materials furnished, rule that the doubt for which its in such claim,' in the absence of own lack of clearness was responanything in the act indicating a dif- sible must be resolved against it. ferent intention, must be taken to Second. The argument advanced mean the time when such work was in support of the second ground redone or materials furnished, as lied upon for reversal, in substance, specified in plaintiff's written is that a policy of insurance necesclaim.”

sarily imports a risk, and where Here the words, referring to the there is no risk there can be no inwritten policy, are "from its date of surance; that when the insured dies issue." While the question, it must what had been a hazard has become be conceded, is not certainly free a certainty; and that the obligation from reasonable doubt, yet, having then is no longer of insurance, but in mind the rule first above stated, of payment; that by the incontestthat in such case the doubt must be ability clause the undertaking is resolved in the way most favorable that after two years, provided the to the insured, we conclude that the risk continues to be insured against

words refer not to for the period, the insurer will make Insurance incontestability the time of actual no defense against a claim under the -date of issue.

execution of the pol- policy; but that if the risk does not icy, or the time of its delivery, but continue for two years (that is, if to the date of issue as specified in the insured dies in the meantime), the policy itself. Wood v. Brother the incontestability clause is not aphood of American Yeomen, 148 Iowa, plicable. Only in the event of the 400, 403, 404, 126 N. W. 949; An- death of the insured after two years, derson v. Mutual L. Ins. Co. 164 Cal. it is said, will the obligation to pay 712, 130 Pac. 726, Ann. Cas. 1914B, become absolute. The argument is 903; Harrington v. Mutual L. Ins. ingenious, but fallacious, since it igCo. 21 N. D. 447, 34 L.R.A.(N.S.) nores the fundamental purpose of 373, 131 N. W. 246; Yesler v. Seat- all simple life insurance, which is tle, 1 Wash. 308, 322, 323, 25 Pac. not to enrich the insured, but to se1014. It was competent for the par- cure the beneficiary, who has, thereties to agree that the effective date fore, a real, albeit sometimes only of the policy should be one prior to a contingent, interest in the policy. its actual execution or issue; and It is true, as counsel for petitionthis, in our opinion, is what they did. er contends, that the contract is Plainly, their agreement was effec- with the insured, and not with the tive to govern the amount of the beneficiary; but, nevertheless, it is premiums and the time of their fu- for the use of the beneficiary, and ture payment, reducing the former there is no reason to say that the inand shortening the latter, and, in contestability clause is not meant the absence of words evincing a con- for his benefit as well as for the trary intent, we are unable to avoid benefit of the insured. It is for the the conclusion that it was likewise benefit of the insured during his lifeeffective in respect of other provi- time, and upon his death immediatesions of the policy, including the one ly inures to the benefit of the benehere in question. This conclusion ficiary.

As said by the supreme is fortified by a consideration of the court of Illinois in Monahan v. precise words employed, which are Metropolitan L. Ins. Co. 283 Ill. 136, "from its (that is, the policy's) date 141, L.R.A.1918D, 1196, 119 N. E. of issue;" or, in other words, from 68: "Some of the rights and obligathe date of issue as specified in the tions of the parties to a contract of policy. It was within the power of insurance necessarily become fixed the insurance company, if it meant upon the death of the insured. The

beneficiary has an interest in the There the clause was: “After this contract, and, as between the insur- policy shall have been in force for er and the beneficiary, all the rights one full year from the date hereof and obligations of the parties are it shall be incontestable," etc. The not determined as of the date of the decisions seem to have turned upon death of the insured. The incon- the use of the words “in force," the testable clause in a policy of insur- district judge in the first case sayance inures to the benefit of the ing: “Are the policies ‘in force,' as beneficiary after the death of the in- contemplated in the clause, after the sured as much as it inures to the death of the assured, occurring pribenefit of the insured himself dur- or to one year from the date of the ing his lifetime. The rights of the policy? It seems to me that the parties under such an incontestable proper construction of this clause is clause as the one contained in this that it contemplates the continucontract do not become fixed at the ance in life of the assured durdate of the death of the insured.” ing that year; else why except the

In order to give the clause the nonpayment of premiums ?” This meaning which the petitioner as- amounts to little more than a quære, cribes to it, it would be necessary

since the question was then disto supply words which it does not missed and the case decided upon at present contain. The provision another ground. We express neiplainly is that the policy shall be in- ther agreement nor disagreement contestable upon the simple condi- with the construction put by these tion that two years shall have decisions upon the provision therein elapsed from its date of issue;—not considered; but, dealing alone with that it shall be incontestable after the provision here under review, we two years if the insured shall live, are constrained to hold that it adbut incontestable without qualifica- mits of no other interpretation than tion and in any event. See Monahan that the policy bev. Metropolitan L. Ins. Co. supra; came incontestable of insured-time Ramsey v. Old Colony L. Ins. Co. 297 upon the sole condiIll. 592, 601, 131 N. E. 108; Ebner tion that two years had elapsed. v. Ohio State L. Ins. Co. 69 Ind. Certain difficulties, both legal and App. 32, 42-48, 121 N. E. 315; practical, said to arise from this inHardy v. Phænix Mut. L. Ins. Co. terpretation, in respect of the en180 N. C. 180, 104 S. E. 166, 168,

forcement of the rights of the insur169.

er, are suggested by way of illustra

tion. But these we deem it unnecesCounsel for petitioner cites two

sary to review. It is enough to say cases which, it is said, sustain his

that they do not, in fact, arise in view of the question: Jefferson Standard L. Ins. Co. v. McIntyre, arise except as a result of the con

the instant case, and they could not 285 Fed. 570, and Jefferson Stand- tract, whose words the insurance ard L. Ins. Co. v. Smith, 157 Ark.

company itself selected, and by 499, 248 S. W. 897. But the incon

which it is bound. testability clause under review in The judgment of the Court of Apthose cases was unlike the one here. peals is affirmed.

effect of death

for contest.


Time when incontestable clause in life insurance policy becomes effective;

death of insured before end of contestable period.

I. Introductory, 109.
II. Death of insured before expira-

tion of period of contestability,

III. Computing the time from which the

incontestable clause begins to

operate, 112. IV. Effect of reinstating policies, 114.

V. Substitution of another policy, 115. VIII. Death within the "period of grace" VI. Assumption by one company of the

provided for paying premiums, risks of another, 116.

VII. Difference between policy and stat- IX. Miscellaneous, 117.

ute as to time, 117.
1. Introductory.

Illinois.—Monahan v. Metropolitan The question in Mutual Reserve L. Ins. Co. (1918) 283 Ill. 136, L.R.A. Fund Life Asso. V. Austin (1905) 6 1918D, 1196, 119 N. E. 68; Ramsey v. L.R.A.(N.S.) 1064, 73 C. C. A. 498, Old Colony L. Ins. Co. (1921) 297 Ill. 142 Fed. 398, and similar cases, as to 592, 131 N. E. 108. the effect upon the incontestable clause Indiana.-Ebner v. Ohio State L. of a provision in the policy that it Ins. Co. (1918) 69 Ind. App. 32, 121 N. should not take effect or be in force E. 315. until delivered to the insured during Missouri.-Lavelle v. Metropolitan his lifetime, while in good health, and L. Ins. Co. (1922) 209 Mo, App. 330, the first premium paid during his good 238 S. W. 504. health, is beyond the scope of the an- North Carolina.—Hardy v. Phoenix notation.

Mut. L. Ins. Co. (1920) 180 N. C. 180, Incontestability clauses in insur- 104 S. E. 166. ance policies are favored in the law, Pennsylvania.-Feierman v. Eureka and the courts are ever ready to con- L. Ins. Co. (1924) Pa.

A.L.R. strue them, if possible, in favor of the - 124 Atl. 171. insured. As illustrative of this point, Tennessee. HUMPSTON V. STATE it will be observed that in many of MUT, LIFE ASSUR. Co. (reported herethe cases reviewed in this annotation, with) ante, 78. where there has been a doubt as to In MUTUAL L. INS. Co. v. HURNI whether the incontestability clause PACKING Co. (reported herewith) was to run from the date appearing on ante, 102, affirming (1922) 280 Fed. the face of the policy or from the 18, the court held that, under a proviactual date of execution or delivery, or sion in a life insurance policy making in cases where the incontestability it incontestable after two years from clause conflicted with other provi- its date of issue, the death of the insions of the policy, the doubt was gen- sured within the two-year period did erally resolved against the insurer and

not make the incontestable clause inin favor of the insured. Other classes operative. To use the words of the of cases treated in the annotation are court, “the provision plainly is that illustrative of the same principle. the policy shall be incontestable upon II. Death of insured before expiration

the simple condition that two years of period of contestability.

shall have elapsed from its date of isWhere a life insurance policy pro

sue-not that it shall be incontestable vides that after a certain definite time

after two years if the insured shall it shall be incontestable, except for

live, but incontestable without qualificertain defenses, a majority of the

cation and in any event." courts hold that the death of the in

The death of the insured within the sured within this time does not put

period of contestability provided for an end to the incontestable clause, or in a policy does not make the inconprevent its subsequently becoming testability clause inapplicable. Monaoperative for the benefit of the bene- han v. Metropolitan L. Ins. Co. (Ill.) ficiary.

supra. In other words, the limitation United States.-MUTUAL L. INS. Co. in the policy does not have to elapse in v. HURNI PACKING CO. (reported here- the lifetime of the insured in order for with) ante, 102; Jefferson Standard it to become effective as a bar. This L. Ins. Co. v. McIntyre (1923) 294 Fed. case settles the law on that point in 886, reversing (1922) 285 Fed. 570. Illinois, but attention is directed to

Arkansas. MISSOURI STATE L. INS. the fact that on appeal from a former Co. v. CRANFORD (reported herewith) trial in this case, in the intermediate ante, 93.

appellate court, it was held in (1913) 180 Ill. App. 390, that as the assured rule that statutes, like contracts, are died within the period of contestabil- to be taken and understood in their ity fixed by the policy, the incontesta- ordinary and popular sense, the court bility clause became inoperative, the was of the opinion that the language court being of the opinion that the in- used in the incontestable clause in the contestability provision should be con- instant case was not so ambiguous as strued as meaning that if the policy to call for the insertion of modifying had been in force for the whole period or limiting clauses in order to deterof contestability, or if the insured mine its meaning. should survive the period of contesta- And in Lavelle v. Metropolitan L. bility, it should be incontestable. Ins. Co. (1922) 209 Mo. App. 330, 238

In Ramsey v. Old Colony L. Ins. Co. S. W. 504, the court held that where an (Ill.) supra, the court held that where incontestable clause in a life insurthe insured died within a year after ance policy stipulated that the policy the issuance of a policy payable to should be incontestable, except for his estate, containing a clause making nonpayment of premiums, after two it incontestable after one year from years from date, all defenses except the date of issue, the period in which nonpayment of premiums were barred the insurer could contest the claim ex- two years from the date of the policy, pired in one year after the date of regardless of whether the insured surissue, excluding the time elapsing be- vived that period or not. The court tween the death of insured and the in the instant case was construing the appointment of his administrator. law of Illinois, as the policy was an This case cites and follows Monahan Illinois contract and governed by the v. Metropolitan L. Ins. Co. (Ill.) supra, law of that state, which was duly in holding that the incontestable pleaded and proven; the incontestaclause continued in force after the bility clause in this case was a requiredeath of insured, although the death ment of an Illinois statute, and the occurred before the expiration of the court, as intimated above, gave it the time limited for contest in the incon- same construction as was given to testability clause.

such clauses in the Illinois courts. Construing a similar clause, the And in Hardy v. Phænix Mut. L. Ins. court held in Ebner v. Ohio State L. Co. (1920) 180 N. C. 180, 104 S. E. Ins. Co. (1918) 69 Ind. App. 32, 121 166, the court held that under a policy N. E. 315, that the insurer's right to of life insurance containing a clause contest was

limited to one year providing that it should be incontesta(period provided for an incontestabil- ble after one year from date, except ity clause), regardless of the time for nonpayment of premiums, the when the insured died. The court policy becomes incontestable only says: “Had it been the purpose of the after that time, regardless of whether author of the provision, or the intent the insured survives the one-year of the parties to the contract in as- period. The court remarks that, if it senting to it, to stipulate that appel- should accept the view of the insurer lee's [insurer's right to

] right to contest that the incontestability clause meant should be limited to a period of one that the insured must survive the year only in case the policy continued period of contestability in order to in force for that length of time, or make the clause effective, "we must longer, it would seem that apt lan- insert in the contract, expressed in guage to that effect might have been simple, unambiguous language, stipuemployed.” It seems that the incon- lations which do not appear there, and testable clause in the policy was in- which materially affect the contract of serted pursuant to a legislative enact- the parties, which we are not at libment providing that all life insurance erty to do.” To the same effect, see policies should be incontestable after HUMPSTON V. STATE MUT. L. ASSUR. not more than two years from their Co. (reported herewith) ante, 78. date, except for nonpayment of pre- Although the general question as to miums, etc.; therefore, applying the what acts on the part of the insurance

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company within the contestable period W. 913; INDIANAPOLIS L. INS. Co. v. amount to a contest which will pre- AARON (reported herewith) ante, 100; vent the incontestable clause from be- Markowitz v. Metropolitan L. Ins. Co. coming operative is beyond the scope (1924) 122 Misc. 675, — N. Y. Supp. of the annotation, it may be noted that in Feierman V. Eureka L. Ins. Co. The provision in the Stevens Case, (Pa.) supra, the court said that the and apparently in the AARON CASE, great weight of authority supports was that “this policy shall be inconthe position that the insurer must, testable after two years from its date at least, disavow liability within of issue except for nonpayment of the contestable period, to be premiums." That was also the form lieved—“not necessarily by legal of the clause in the Markowitz Case. action, but some definite step specify- In Jefferson Standard L. Ins. Co. v. ing the ground of complaint, in such Smith (1923) 157 Ark. 499, 248 S. W. form as to effect a cancelation of the 897, supra, however, the provision contract." In Jefferson Standard L.

that “after this policy shall Ins. Co. v. McIntyre (Fed.) supra, be in force for one full year from however, the circuit court of appeals the date hereof it shall be inconheld that a mere denial or repudiation

testable for any cause except for by an insurer of its liability under a nonpayment of premiums;" and the policy, after insured's death, accom- United States

States Supreme Court in panied by a tender of the premium MUTUAL L. INS. Co. v. HURNI PACKING paid, is not a contest within the mean- Co. (reported herewith) ante, 102, ing of such a provision. (In explana- which supports the majority view, tion of the fact that the decision on observed that the clause in the case at appeal in this case was in favor of the bar which read, “This policy shall be insurance company, it is to be noted incontestable, except for nonpayment that the appeal was from a decree of of premiums, provided two years shall the district court dismissing a bill of

have elapsed from its date of issue," equity filed by the insurance company differed from the clause involved in after the death of insurer, and seeking the Smith Case decided by the Arkancancelation because of alleged false sas supreme court. In this connection statements as to health, etc.; the dis

it will be noted that the latter court, trict court took the view that death put in MISSOURI STATE L. INS. Co, v. CRANan end to the incontestable clause, and FORD (reported herewith) ante, 93, also that the clause did not confine the which supports the majority view, contest to the judicial proceedings, so places its decision upon what it charthat the insurance company had an

acterizes as the uniform current of adequate remedy at law; the circuit authority, disclaiming any intention Court of appeals, having taken a dif- to approve or disapprove the sugferent view of both of these points, gested distinction. held that the bill was maintainable, In Jefferson Standard L. Ins. Co. v. as the insurer had no plain, adequate, McIntyre (Fed.) supra, which inand complete remedy at law.)

volved a clause in the form: “After There is, however, some authority this policy shall have been in force for the view that the death of the in- for one full year from the date hereof sured within the contestable period it shall be incontestable for any cause fixes the rights of the parties and pre- except for nonpayment of premiums," vents the incontestable clause from the court in support of its position thereafter becoming operative upon argued as follows: “Are the policies the expiration of the contestable 'in force,' as contemplated in the clause, period. Jefferson Standard L. Ins. Co. after the death of the assured occurV. McIntyre (1922) 285 Fed. 570 (re- ring prior to one year from the date of versed on this point in (1924) 294 the policy? It seems to me that the Fed. 886); Jefferson Standard L. Ins. proper construction of this clause is Co. v. Smith (1923) 157 Ark. 499, 248 that it contemplates the continuance S. W. 897; Mutual L. Ins. Co. v. in life of the assured during that Stevens (1923) Minn, 195 N. year; else why except the nonpay

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