COIT v. JEFFERSON STANDARD LIFE INS CO (1945)

The appellant sued on a policy of life insurance for the sum of $2500, the face of the policy. The court awarded judgment only for the return of the premiums plus interest, amounting to $71.48.

On January 19, 1942, Charles T. Parks, then a sergeant in the United States army, made application to the respondent for insurance in the sum of $2500. On February 1, 1942, the policy was issued with the insured's wife, Jean M. Parks, named as beneficiary. On October 22, 1942, while serving with troops, the insured died in an army hospital in Alaska of an embolism following an appendectomy. On December 6, 1942, the insured's wife died. The insurer made an tender of $71.48, claiming that under the policy's war risk exclusion rider no more than that was due. The tender was rejected and the administrator of the beneficiary brought this action. The prayer of the complaint was for the reformation of the insurance contract and for $2500, with interest, but at the trial the pursuit of the remedy of reformation was abandoned and the plaintiff stood, and now stands, on the policy as issued.

The rider, which was part of the policy when it was issued, provides that the ‘policy is issued and accepted upon the express agreement that the liability of the Company shall be limited to the amount specified below if the death of the Insured occurs: * * * (2) From any cause while the Insured is serving outside the states of the United States, the District of Columbia, and Dominion of Canada, in the military, naval or air forces of any country at war (declared or undeclared) or within six months after the termination of such service if death be caused from any wounds, injuries or disease received or suffered while in such service; * * *. In event the insured's death should occur under any of the conditions defined above, the Company's liability under this policy shall be a single sum equal to the premiums actually paid on this policy with compound interest at the rate of 3 percent per annum * * *.’

The trial judge decided that the insured's death from natural causes while serving in Alaska was not a risk assumed by the insurer. The appellant attacks this conclusion and contends that it was the meaning and intent of the contract to insure against death caused by ills common to everyone, whether in the service or not, and that the exclusion or exemption applies only in case of death from a cause connected with war and its hazards and perils. He argues that: ‘The words ‘From any cause’ when read in connection with the heading of the rider attached to the policy—‘Aviation and War Risk Exclusion Rider’ mean no more than that the liability of the insurer shall be limited when the death of the insured is occasioned by, incidental to or proximately caused by military activities, and not where it has been due to natural, ordinary or accidental causes.' Further, that such an interpretation is consistent with the universal rule (37 C.J. 546) that where the language of an insurance contract is ambiguous, it is to be construed most strongly against the insurer, who is presumed to have drawn the policy and caused the uncertainty to exist. That rule, of course, is well settled in this state. 14 Cal.Jur. 443, sec. 24; Bayley v. Employers' Liability Assurance Corp., 125 Cal. 345, 352, 58 P. 7; Clarke v. New Amsterdam Casualty Co., 180 Cal. 76, 81, 179 P. 195; Blackburn v. Home Life Ins. Co., 19 Cal.2d 226, 229, 120 P.2d 31.

The question is new in this state. A score of cases have been cited by the appellant and several by the respondent, most of which came before the courts of other states after World War I and arose because of deaths from pneumonia during the widespread influenza epidemic in 1918—1919, with a few cases of deaths by accident not caused by the perils of war or combat. It is agreed by both sides and recognized in the decisions that there is a diversity in the holdings, arising not because one group of states follows one line of decision and another group follows another, but because of the difference in the wording of the policies themselves. The cases fall, broadly, into two groups, one holding that the status of the insured as a soldier or sailor is determinative, the other that the cause of death is determinative. There is unanimity, however, on the rule that ambiguities in the policy are to be resolved in favor of the insured and against the insurer and in most of the cases relied on by the appellant that rule will be found to have played an important part in reaching the decision. See, generally, 29 Am.Jur., p. 695, sec. 911; 137 A.L.R. 1263, also 147 A.L.R. p. 1294; 150 A.L.R. p. 1414; 151 A.L.R. p. 1452, and 152 A.L.R. p. 1449.

We are satisfied from a reading of paragraph 2 by itself that it is free from any ambiguity or uncertainty, and that it means precisely what it says. In the first place, it does not attempt to create an absolute exemption because of military or naval service per se; it sets up only a partial exemption, the limitation being geographical in character. It is only ‘while the Insured is serving outside the states of the United States, the District of Columbia, and Dominion of Canada’ that the exemption is operative. Even while serving in time of war within that area the insured seemingly would be covered whether death results from natural causes or, for instance, from wounds or injuries received in meneuvers while training or in actual combat. This seems to be the plain and natural meaning of the language. Secondly, the use of the words ‘From any cause’ makes it doubly clear that death from injuries received in combat, or as a consequence of actual warfare, could not possibly have been contemplated as the sole ground of exemption. Those words show a studied attempt to get away from the constricted meaning for which the appellant contends. No broader or more comprehensive phrase could well have been chosen. Moreover, as will presently appear, these words, ‘From any cause’ or words of similar import, are not found in any of the policies involved in the authorities relied on by the appellant. Aside then, from whatever light is shed on the present problem by authorities from other jurisdictions, the language, in our opinion, when read by itself means just what the trial judge held it to mean, namely, that death ‘from any case,’ however remote from, or unrelated to, actual hostilities is within the limitation of liability if it occurs under the conditions named.

The respondent cites and strongly relies on the recent case of Bending v. Metropolitan Life Ins. Co., 74 Ohio App. 182, 58 N.E.2d 71, 72, where the clauses in the policy were held to be clear and unambiguous and to make the status of the insured in the military or naval service, and not his activities therein, the ground of exemption. The clauses there read: (a) ‘provided * * * that death shall not have resulted from bodily injuries * * * sustained while the insured is in the military or naval service in time of war’ and (b) ‘the insurance under this * * * contract shall be suspended * * * while the insured is in the military or naval service in time of war.’ That case is well reasoned. The language of the policy therein subjected to examination is comparable with that under examination herein (but nowhere nearly so explicit, because of the words herein ‘from any cause’). The opinion discusses the entire subject and cites most of the authorities with care and discrimination. For these reasons we adopt the discussion therein of the cases on which the appellant herein chiefly relies. In those cases the insured persons died, while in the service, from causes common to all humans, in most cases from influenza or pneumonia (in a few cases by accident) and in most instances at training camps or other places far removed from combat areas. In the Bending case the court says:

‘The apparent conflict is due in a great measure to the difference in phraseology of the exemption clauses, but the courts in many of these cases, adhering to the well settled rule that in construing an insurance contract which by reason of ambiguities is capable of two reasonable interpretations, that interpretation will be adopted which is most favorable to the insured, have gone to some length in taking a particular word or phrase in the military clause, construing the same as ambiguous, then resolving that ambiguity as meaning activity of a military nature and not status, and holding the insurer liable.

‘One of those words is ‘engaged’ and it occurs in clauses of which the following is typical: ‘If within five years from date hereof the death of the insured shall occur while engaged in the military or naval service in time of war, without previously having obtained from the company a permit therefor, the company's liability shall be limited * * *.’ Boatwright v. American Life Ins. Co., 191 Iowa 253,180 N.W. 321, 11 A.L.R. 1085.

‘The court in that case reasons that the word ‘engaged’ connotes ‘resulting from’ or ‘in consequence of’ etc. Consequently the clause was not intended to exempt the company from liability by reason of the soldier's mere status of being in the military service, but the exemption only applied where death occurred from activities of a purely military nature which were not common to soldiers and civilians alike. In that case the insured died in camp of influenza. To the same effect are the cases of Benham v. American Central Life Ins. Co., 1919, 140 Ark. 612, 217 S.W. 462; Long v. St. Joseph Life Ins. Co., Mo.App.1920, 225 S.W. 106; Rex Health & Accident Ins. Co. v. Pettiford, 1920, 74 Ind.App. 507, 129 N.E. 248; Myli v. American Life Ins. Co. of Des Moines, 43 N.D. 495, 175 N.W. 631, 11 A.L.R. 1097; Kelly, Adm'x, v. Fidelity Mutual Life Ins. Co. of Philadelphia, 169 Wis. 274, 172 N.W. 152, 4 A.L.R. 845; Barnett v. Merchants' Life Ins. Co., 87 Okl. 42, 208 P. 271.

‘The use of the word ‘risk’ in those clauses has also been used as the basis of the construction of the clause as involving ‘activities' and not ‘status.’ The case of Atkinson, Adm'r, v. Indiana National Life Ins. Co., 194 Ind. 563, 143 N.E. 629, 630, is illustrative of this type of construction. The policy there provided: ‘After one year from the date of issue this policy shall become incontestable if the premiums have been duly paid, except in case of self-destruction within two years, whether sane or insane, and except that military or naval service in time of war without a permit from the company, is a risk not assumed under this policy at any time.’

‘Due to the use of the word ‘risk’ that clause was held to be ambiguous in that it might mean either activities or status and was therefore resolved against the insurer which was held liable for the death of the insured in a motorcycle accident while on leave of absence from duty.'

Each of the cases discussed in the foregoing quotation is relied on by the appellant herein. In addition thereto he has cited a number of cases most of which fit into the same category (to quote from the Bending case) putting ‘emphasis on the phrases ‘resulting from,’ ‘in consequence of,’ and ‘active service’ in arriving at a similar construction.'

Those cases, with parenthetical quotations from their exemption clauses, are as follows: Gorder v. Lincoln National Life Ins. Co., 46 N.D. 192, 180 N.W. 514, 11 A.L.R. 1080 (‘in consequence of such service’); Starr v. Great American Life Ins. Co., 114 Kan. 315, 219 P. 514, 515, (‘in consequence of such service’); Johnson v. Mutual Life Ins. Co., 154 Ga. 653, 115 S.E. 14, 15 (‘as a result of military or naval service in time of war, * * * nor if such death be caused directly or indirectly, wholly or partly, by * * * war, or any act incident thereto’); Nutt v. Security Life Ins. Co., 142 Ark. 29, 218 S.W. 675 (military or naval service in time of war are ‘risks not assumed’); Malone v. State Life Ins. Co., 202 Mo.App. 499, 213 S.W. 877, 880 (‘the death of the insured while so engaged * * * as a result of such service’); Farmers' National Life Ins. Co. v. Carman, 76 Ind.App. 700, 132 N.E. 697, decided, without setting forth any facts, on the authority of the Rex case, supra; Stephen v. Prairie Life Ins. Co., 113 Neb. 469, 203 N.W. 626, 627 (‘if the insured * * * engage in military or naval service in time of war * * * and death shall occur during such engagement or as a result thereof’); Arendt v. North American Life Ins. Co., 107 Neb. 716, 187 N.W. 65, 66 (‘death occurring in any part of the world and in any occupation, or from any cause, except military or naval service in time of war’); Illinois Bankers' Life Ass'n v. Jackson (2 cases), 88 Okl. 133, 211 P. 508 (‘if the insured engages in military or naval service’); Illinois Bankers' Life Ass'n v. Davaney, 102 Okl. 302, 226 P. 101, 103 (‘death while in the service in the army or navy of any government in time of war is not a risk covered * * *’). Also Welts v. Connecticut Mutual Life Ins. Co., 48 N.Y. 34, 8 Am.Rep. 518, where the policy provided that the insured was not protected against death from any of the casualties or consequences of war or rebellion, or from belligerent forces in any place where he may be. He was a civilian engineer building a bridge for the Union army thirty miles behind the Union lines, and was killed by four hold-up men who were not soliders in either the Union or Confederate armies. In the cases last cited (just as in the eight cases reviewed in the Bending case) a recovery of the full face of the policy was allowed on the theory that the insured's death from causes not related to hostilities, was not within the terms of the policy's exemption.

The appellant also cites several cases which do not appear to fit into this category. They are: Railey v. United Life & Accident Ins. Co., 26 Ga.App. 269, 106 S.E. 203, where the insured a soldier, was killed in the collision with another troopship of the troopship on which he was being transported to the combat area in Europe. It was held to be squarely within the exemption. American Nat. Ins. Co. v. Turner, Tex.Civ.App., 226 S.W. 487, simply involved the question whether the beneficiary could collect attorney fees. The insured, a marine, was killed in battle in France, a risk clearly within the exemption.

In the Bending case the court says: ‘The court in many of the cases above referred to, while holding that the particular clause under consideration was ambiguous and therefore to be construed against the insured, specifically recognized the proposition that a clause might be written making status the ground for exemption and it would be valid.’ As an example the court quotes from the Myli case, supra, where it is said: ‘For instance, it might well have been stated, ‘If within five years from date the insured shall enlist or become inducted into the military or naval service without having obtained a permit therefor; etc., then status would clearly have been the test.’ A year later, in the Gorder case, 46 N.D. 192, 195, 180 N.W. 514, 11 A.L.R. 1080, supra, Justice Birdzell, the author of the opinion in the Myli case, said: ‘There is a vast difference between a death in the active military service [citations] and a death in consequence of such service [citations].’ See also Olson v. Grand Lodge, 48 N.D. 285, 290, 184 N.W. 7, 15 A.L.R. 1270, where the same court discusses the Myli case. In Long v. St. Joseph Life Ins. Co., Mo.App., 225 S.W. 106, 107 (affirmed, Mo.Sup., 248 S.W. 923), supra, the court says: ‘The insurance company has the right to decide the kind of contract it will enter into. * * * If it chooses, it can say to the insured: ‘During the period you are an enlisted soldier or sailor I will not be liable for the insurance, should you die in that period, no matter whether such service caused it or not.’' In Johnson v. Mutual Life Ins. Co., 154 Ga. 653, 656, 115 S.E. 14, supra, it is said: ‘Provisions in policies of life insurance, that the insurer does not assume risk of death which shall occur while the insured is engaged in military service, * * * have been held to exempt the insurer from liability, notwithstanding the fact that death did not result from any hazard peculiar to such service. [Citations.] * * * Under such provisions, when the insured is engaged in military service * * * and the dies in such service, from any cause, these authorities hold that there cannot be any recovery. * * * If the insurer had intended that it was not to be liable for this double indemnity if the insured died while in the military service from any cause whatsoever, it would have been an easy matter to have written such a stipulation in the policy. Such a provision would have made the insured's status in the military service, at the time he met his death, and not the cause of his death, the ground of the insurer's exemption from liability.’ [Emphasis ours.]

The quotations just given are all taken from cases relied on herein by the appellant.

A number of authoritis which support the decision of the trial court and the position of the respondent herein, construe policies where the language is quite similar to the language employed in the cases upon which the appellant relies. Notably, among such cases, is Bradshaw v. Farmers' & Bankers' Life Ins. Co., 107 Kan. 681, 193 P. 332, 11 A.L.R. 1091, where the limitation was ‘If * * * the insured shall engage in military or naval service in time of war, the liability of the company, in event of the death of the insured while so engaged * * * will be limited * * *.’ The court held that the status of the insured as a member of the armed forces was alone sufficient to bring the exemption into operation. Other cases where an exemption is created if the insured shall engage in the military or naval service (or equivalent language is used) are Huntington v. Fraternal, etc., Ass'n, 173 Wis. 582, 181 N.W. 819; Olson v. Grand Lodge, 48 N.D. 285, 184 N.W. 7, 15 A.L.R. 1270, supra; Field v. Western Life Ind. Co., Tex.Civ.App., 227 S.W. 530; Mattox v. New England Life Ins. Co., 25 Ga.App. 311, 103 S.E. 180; and Sandstedt v. American Central Life Ins. Co., 109 Wash. 338, 186 P. 1069. In these cases the courts reached conclusions opposite to those reached in the Benham, Boatwright and Long cases, supra, and held that the words ‘engage’ or ‘engaged in’ were simply descriptive of the status of the insured, and that the insurer's liability was limited. The same result was reached in Ruddock v. Detroit Life Insurance Co., 209 Mich. 638, 177 N.W. 242, 243, where the exemption read: ‘This policy * * * shall be incontestable * * * except for naval or military service in time of war, without a permit, which are risks not assumed * * *.’ And likewise in Miller v. Illinois Bankers' Life Ass'n, 138 Ark. 442, 212 S.W. 310, 7 A.L.R. 378, where the language was: ‘* * * death while in the service in the army or navy of the government in time of war is not a risk covered * * *.’

In McQueen v. Sovereign Camp, 115 S.C. 411, 106 S.E. 32, the exemption read: ‘* * * In the event the holder of this certificate shall die while serving in any branch of the United States Army or Navy, either as an officer or enlisted man, outside the boundaries of the United States' the liability of the insurer would be limited. This language is closer to that in the policy involved herein than that of any case we have been able to find. It contains also a geographical limitation. The court held the liability was effectively limited.

In addition to the Bending case the respondent also relies on the recent cases of Life & Casualty Ins. Co. v. McLeod, 70 Ga.App. 181, 27 S.E.2d 871, and Lindsey v. Life & Casualty Ins. Co., 70 Ga.App. 190, 27 S.E.2d 877. In both cases the clause read: ‘Should the insured die while enrolled in such [military or naval] service in war time without such permit, the company's liability will be restricted to the net reserve of this policy.’ The clause was held in both cases to preclude a recovery of the face of the policy, and to fasten only limited liability on the insurer.

From the foregoing discussion it will be seen that the cases on this subject may be grouped about as follows: (1) Those holding that language such as ‘death in consequence of’ or ‘death resulting from’ military service means that death from natural causes while in the service is not within the exemption; (2) those holding that death ‘while engaged in’ the service has the same meaning (as group 1); (3) those holding that death ‘while engaged in’ the service means no more than while enlisted in, or enrolled in, the armed forces, hence such death, even from natural causes, is within the exemption, and (4) those cases where the war risk clause contains no such language as is found in (1), (2) or (3) but simply states the condition, namely, military or naval service.

The clause in this case (as in the Bending, McLeod, Lindsey and McQueen cases) is in the fourth category.

It is interesting to note, however, that the third paragraph in the war risk rider now before the court does contain language somewhat similar to that discussed in group (1). That paragraph is designed to limit the insurer's liability if death occurs: ‘(3) Within two years after the date of issue of this policy as a result of war (declared or underclared), or any act incident thereto occurring while the Insured is traveling, residing or stationed outside the states of the United States, the District of Columbia, and the Dominion of Canada.’ The words ‘as a result of war’ and ‘any act incident thereto’ are in sharp contrast to the language of paragraph 2, here involved, and would indicate that two distinct forms of coverage were intended. Paragraph 3 of course is not before the court in this case.

The phrase ‘from any cause’ which would seem to mean ‘without regard to the cause’ (see Bohrnstedt v. Travelers' Ins. Co., 123 Or. 539, 259 P. 419, 262 P. 938, 939) in our opinion leaves little or no room for argument in the instant case. ‘Because contracts of insurance are not the result of negotiation and are generally drawn by the insurer, any uncertainties or ambiguities therein are resolved most strongly in favor of the insured. * * * Where there is no ambiguity, however, courts will indulge in no forced construction against the insurer, and the insurance policy, like any other contract, is to be interpreted according to the intention of the parties as expressed in the instrument in the light of the circumstances surrounding its execution. * * *.’ Blackburn v. Home Life Ins. Co., 19 Cal.2d 226, 229, 120 P.2d 31, 32, supra.

The judgment is affirmed.

GOODELL, Justice.

NOURSE, P. J., and DOOLING, Justice pro tem., concur.