Hart, J.,
(after stating the facts). Each of the policies of insurance sued on was issued by the defendant on the 29th day of May, 1918, and the insured, Bur-rel A. Cranford, died on the 6th day of January, 1919. Proof of death- of the insured was given to the defendant by the wife, who was the beneficiary in each policy. Payment was refused by the company on the ground that the insurance had been procured -by false representations of a material character which had been made by the insured in his application for the purpose of procuring the policies of insurance.
No answer was filed to the present suit within one year after the date of the insurance policies, and no suit has been brought by the insurance company to set aside the contract of insurance because it had been procured by fraudulent representations on the. part of the insured.
Thus it will be seen that the sole issue raised by the appeal depends upon the construction to be given the incontestable clause, which is set out in full in our statement of facts. In substance it provides that the policies shall be incontestable after one year, if the-premiums are duly paid, except for the violation of the provision relating to military or naval service in time of war. The modern rule is that a life insurance policy containing a provision that it shall be incontestable after a specified time cannot be contested by the insurer on any ground not excepted in that provision. It is said that the practical and intended effect of such a stipulation is to create a short statute of limitations. By the stipulation, the insurance company agreed that it would take a year to investigate and determine whether it would contest the policies of insurance, and that, if it failed within that time to discover any grounds for contesting the same, it would make no further investigation and would not thereafter contest the validity of the policies.
It has been uniformly held that a provision of this kind is valid where the time allowed for the investigation is a reasonable period. Policies of insurance are prepared by the insurance companies, and the insured has no voice in their preparation. Clauses of this kind are evidently inserted in insurance policies by the insurer for the mutual advantage of both the insurer and the insured. It has been well said that such a provision is reasonable and proper because it gives the insured a guaranty against expensive litigation to defeat his policy after the lapse of the time specified, and at the same time gives the company a reasonable time and opportunity to ascertain whether the contract should remain in force. Such a stipulation is not against public policy as tending to put fraud on a par with honesty. On the contrary, the stipulation recognizes fraud and all other' defenses, but provides a reasonable time in which they may be, but beyond which they may not be, established. Therefore it is in the nature of and serves a similar purpose as a statute of limitations, the wisdom of which has been universally recognized.
As said by Judge Mitchell in Mareck v. Mutual Reserve Fund Life Assn., 62 Minn. 39, an- incontestable clause is inserted in the contract by the company itself and is written there for a purpose. After holding such a stipulation to be valid, the learned judge said: “To the layman the present contest would, as plaintiff’s counsel suggests, appear very much like a contest over an incontestable policy.” Numerous other eases from the various courts of last resort in the United States are cited in a case note to 6 A. L. E. at p. 453. Among these we cite the following: Arnold v. Equitable Life Assur. Soc., 228 Fed. 157; Great Western L. Ins. Co. v. Snavely, 206 Fed. 20, 46 L. R. A. (N. S.) 1057; Dibble v. Reliance L. Ins. Co., 170 Cal. 199, Ann. Cas. 1917-E, p. 34; Prudential Ins. Co. v. Lear, 31 App. D. C. 184; Massachusetts Ben. Life Asso. v. Robinson (Ga.), 42 L. R. A. 261; Weil v. Federal L. Ins. Co. (Ill.), Ann. Cas. 1915D, p. 974; Indiana Nat. L. Ins. Co. v. McGinnis (Ind.), 45 L. R. A. (N. S.) 192; Kansas Mut. L. Ins. Co. v. Whitehead (Ky.), 13 Ann. Cas. 301; Mutual L. Ins. Co. v. New (La.), 27 L. R. A. (N. S.) 431; Reagan v. Union Mut. L. Ins. Co. (Mass.), 2 L. R. A. (N. S.) 821; Harris v. Security L. Ins. Co. (Mo.), Ann. Cas. 1914C, p. 648; Drew v. Metropolitan L. Ins. Co. (N. J.), 75 Atl. 167; Wright v. Mutual Ben. Life Assn. (N. Y.), 6 L. R. A. 731; American Trust Co. v. Life Ins. Co. (N. C.), 92 S. E. 706; Murray v. State Mut. L. Ins. Co. (R. I.), 53 L. R. A. 742; Metropolitan Life Ins. Co. v. Peeler (Okla.), 6 A. L. R. 441; Supreme Lodge of Knights of Pythias v. Overton (Ala.), 16 A. L. R. 649; Philadelphia L. Ins. Co. v. Arnold (S. C.), Ann. Cas. 1916C, p. 706; Clement v. New York L. Ins. Co. (Tenn.), 42 L. R. A. 247; and Patterson v. Natural Premium Mutual L. Ins. Co. (Wis.), 42 L. R. A. 253.
That too is the effect of a recent holding of the Supreme Court of the United States in Mutual Life Insurance Company v. Hurni Packing Company, 260 U. S. 712. In that ease the court said that, while the contract of insurance is with the insured, nevertheless it is for the use of the beneficiary, and that there is no reason to say that the incontestable clause is not meant for his benefit as well as the benefit of the insured. The court further said that it is for the benefit of the insured during his lifetime, and upon his death immediately inures to the benefit of the beneficiary. In that case it was contended by the petitioner (the insurance company) that, if the insurer died during the period of the time mentioned in the incontestable clause, that clause is not applicable. On this point the learned judge said: “In order to give the clause the meaning- which the petitioner ascribes to it, it would be necessary to supply words which it does not at present contain. The provision plainly is that the policy shall be incontestable upon the simple condition that two years shall have elapsed from its date of issue; not that it shall be incontestable after two years if the insured shall live, but incontestable without qualification and in any event.”
Counsel for the insurance company in that case cited Jefferson Standard Life Ins. Co. v. Smith, 157 Ark. 499, to sustain his view. The Supreme Court of the United States said that the incontestable clause under review in that case was unlike the one passed on by it. There the clause was, “after this policy shall have been in force for one full year from the date hereof, it shall be incontestable,” etc. The Supreme Court of the United States said that the decision seems to have turned on the use of the words, “in force,” which contemplated the continuance in life of the insured' during that year. Without approving or disapproving the distinction, we are content to place our decision in the case at bar upon the uniform current of authority upon the question, including the decision of the Supreme Court of the United States. It is to the advantage and convenience of both the insured and the insurer that there should1 be uniformity in policies of insurance, both in form and in the interpretation of the language used in the policies.
The insurance policies sued on were issued on the 29th of May, 1918, and the suits were brought on the 27th of May, 1919. On June 26, 1919, the defendant filed answers to the complaints.
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Hart, J.,
(after stating the facts). Each of the policies of insurance sued on was issued by the defendant on the 29th day of May, 1918, and the insured, Bur-rel A. Cranford, died on the 6th day of January, 1919. Proof of death- of the insured was given to the defendant by the wife, who was the beneficiary in each policy. Payment was refused by the company on the ground that the insurance had been procured -by false representations of a material character which had been made by the insured in his application for the purpose of procuring the policies of insurance.
No answer was filed to the present suit within one year after the date of the insurance policies, and no suit has been brought by the insurance company to set aside the contract of insurance because it had been procured by fraudulent representations on the. part of the insured.
Thus it will be seen that the sole issue raised by the appeal depends upon the construction to be given the incontestable clause, which is set out in full in our statement of facts. In substance it provides that the policies shall be incontestable after one year, if the-premiums are duly paid, except for the violation of the provision relating to military or naval service in time of war. The modern rule is that a life insurance policy containing a provision that it shall be incontestable after a specified time cannot be contested by the insurer on any ground not excepted in that provision. It is said that the practical and intended effect of such a stipulation is to create a short statute of limitations. By the stipulation, the insurance company agreed that it would take a year to investigate and determine whether it would contest the policies of insurance, and that, if it failed within that time to discover any grounds for contesting the same, it would make no further investigation and would not thereafter contest the validity of the policies.
It has been uniformly held that a provision of this kind is valid where the time allowed for the investigation is a reasonable period. Policies of insurance are prepared by the insurance companies, and the insured has no voice in their preparation. Clauses of this kind are evidently inserted in insurance policies by the insurer for the mutual advantage of both the insurer and the insured. It has been well said that such a provision is reasonable and proper because it gives the insured a guaranty against expensive litigation to defeat his policy after the lapse of the time specified, and at the same time gives the company a reasonable time and opportunity to ascertain whether the contract should remain in force. Such a stipulation is not against public policy as tending to put fraud on a par with honesty. On the contrary, the stipulation recognizes fraud and all other' defenses, but provides a reasonable time in which they may be, but beyond which they may not be, established. Therefore it is in the nature of and serves a similar purpose as a statute of limitations, the wisdom of which has been universally recognized.
As said by Judge Mitchell in Mareck v. Mutual Reserve Fund Life Assn., 62 Minn. 39, an- incontestable clause is inserted in the contract by the company itself and is written there for a purpose. After holding such a stipulation to be valid, the learned judge said: “To the layman the present contest would, as plaintiff’s counsel suggests, appear very much like a contest over an incontestable policy.” Numerous other eases from the various courts of last resort in the United States are cited in a case note to 6 A. L. E. at p. 453. Among these we cite the following: Arnold v. Equitable Life Assur. Soc., 228 Fed. 157; Great Western L. Ins. Co. v. Snavely, 206 Fed. 20, 46 L. R. A. (N. S.) 1057; Dibble v. Reliance L. Ins. Co., 170 Cal. 199, Ann. Cas. 1917-E, p. 34; Prudential Ins. Co. v. Lear, 31 App. D. C. 184; Massachusetts Ben. Life Asso. v. Robinson (Ga.), 42 L. R. A. 261; Weil v. Federal L. Ins. Co. (Ill.), Ann. Cas. 1915D, p. 974; Indiana Nat. L. Ins. Co. v. McGinnis (Ind.), 45 L. R. A. (N. S.) 192; Kansas Mut. L. Ins. Co. v. Whitehead (Ky.), 13 Ann. Cas. 301; Mutual L. Ins. Co. v. New (La.), 27 L. R. A. (N. S.) 431; Reagan v. Union Mut. L. Ins. Co. (Mass.), 2 L. R. A. (N. S.) 821; Harris v. Security L. Ins. Co. (Mo.), Ann. Cas. 1914C, p. 648; Drew v. Metropolitan L. Ins. Co. (N. J.), 75 Atl. 167; Wright v. Mutual Ben. Life Assn. (N. Y.), 6 L. R. A. 731; American Trust Co. v. Life Ins. Co. (N. C.), 92 S. E. 706; Murray v. State Mut. L. Ins. Co. (R. I.), 53 L. R. A. 742; Metropolitan Life Ins. Co. v. Peeler (Okla.), 6 A. L. R. 441; Supreme Lodge of Knights of Pythias v. Overton (Ala.), 16 A. L. R. 649; Philadelphia L. Ins. Co. v. Arnold (S. C.), Ann. Cas. 1916C, p. 706; Clement v. New York L. Ins. Co. (Tenn.), 42 L. R. A. 247; and Patterson v. Natural Premium Mutual L. Ins. Co. (Wis.), 42 L. R. A. 253.
That too is the effect of a recent holding of the Supreme Court of the United States in Mutual Life Insurance Company v. Hurni Packing Company, 260 U. S. 712. In that ease the court said that, while the contract of insurance is with the insured, nevertheless it is for the use of the beneficiary, and that there is no reason to say that the incontestable clause is not meant for his benefit as well as the benefit of the insured. The court further said that it is for the benefit of the insured during his lifetime, and upon his death immediately inures to the benefit of the beneficiary. In that case it was contended by the petitioner (the insurance company) that, if the insurer died during the period of the time mentioned in the incontestable clause, that clause is not applicable. On this point the learned judge said: “In order to give the clause the meaning- which the petitioner ascribes to it, it would be necessary to supply words which it does not at present contain. The provision plainly is that the policy shall be incontestable upon the simple condition that two years shall have elapsed from its date of issue; not that it shall be incontestable after two years if the insured shall live, but incontestable without qualification and in any event.”
Counsel for the insurance company in that case cited Jefferson Standard Life Ins. Co. v. Smith, 157 Ark. 499, to sustain his view. The Supreme Court of the United States said that the incontestable clause under review in that case was unlike the one passed on by it. There the clause was, “after this policy shall have been in force for one full year from the date hereof, it shall be incontestable,” etc. The Supreme Court of the United States said that the decision seems to have turned on the use of the words, “in force,” which contemplated the continuance in life of the insured' during that year. Without approving or disapproving the distinction, we are content to place our decision in the case at bar upon the uniform current of authority upon the question, including the decision of the Supreme Court of the United States. It is to the advantage and convenience of both the insured and the insurer that there should1 be uniformity in policies of insurance, both in form and in the interpretation of the language used in the policies.
The insurance policies sued on were issued on the 29th of May, 1918, and the suits were brought on the 27th of May, 1919. On June 26, 1919, the defendant filed answers to the complaints. Hence it is contended by the defendant that, inasmuch as the suits were filed within a year after the date of the issuance of the policies and the defendant answered within the time allowed to do so under the statute, the allegations of its answer related back to the date of the filing of the complaints, and constituted a contest by it within the period of time named in the incontestable clause.
The forms of insurance policies are prepared by the company, from its previous knowledge and experience, and, where the language used is ambiguous hr doubtful, it must be given the strongest interpretation against the insurer which it will reasonably bear. Eminent Household of Columbian Woodmen v. McCray, 156 Ark. 300.
We have already seen that the incontestable clause is held valid, not for the purpose of upholding fraud, but for the purpose of shutting off expensive and harassing defenses based upon fraud after the lapse of a reasonable time. This view does not exclude consideration of fraud, but allows the parties to fix by stipulation the length of time within which the fraud of the insured can operate to deceive the insurer. Incontestable means not contestable. A contest, in law, implies an adversary proceeding in which matters in .controversy may be settled by the courts upon issue joined. The great body of policyholders are persons who are not learned in the law and who have no knowledge of the judicial construction of pleadings.
In the application of the rule just announced, we think the natural and most reasonable view is to hold that the insurer has not contested the policy until it has acted in the premises. The contract provides that the policy shall be incontestable after one year, and no action on the part of the insured or of the beneficiary can relieve the company of its duty to act. In order to contest the policy it was required to file an answer to the suit brought by the beneficiary within one year, or to have instituted an action of its own in equity to cancel the policy on the ground of fraud. In short, we are of the opinion that, construing the clause in the light most favorable to the insured, no contest was. made in the case at bar until the insurance company filed an answer, in which it averred that the contract should be set aside on the ground of the fraud of the insured in procuring it. Having waited until a year had elapsed before it elected to contest on this ground, the company is barred of relief under its own contract.
The judgment will therefore be affirmed.