National Life Insurance Co. of U. S. A. v. Jackson

256 S.W. 378, 161 Ark. 597, 1923 Ark. LEXIS 542

• Court: Supreme Court of Arkansas
• Decided: December 24, 1923
• Status: Published

Opinion

Hart, J.,

(after stating the facts). The court instructed the jury that, if it should find that' the agent of the insurance company had knowledge that the insured had tuberculosis at the time the policy was written or delivered, the insurance company would be liable.

The court erred in giving this instruction. It is true that the general rule of law imputing to a principal notice of facts learned by his agent in the discharge of his duties applies to insurers; but this principle has no application under the terms of the policy sued on. As will be seen from our statement of facts, one of the conditions of the policy is that no liability is assumed by the company for any accident, illness or disease occurring or contracted prior to the date thereof, or any death arising therefrom.

It is well settled that policies of insurance must be interpreted according to the plain import of the language used in them, where- there is no ambiguity in it. The clause in question, in plain terms, provides that no liability is assumed by the company for death arising from a disease contracted prior to the date of the policy. The testimony of the beneficiary herself, as well as that of the physician who attended the insured in his last illness, shows that he had tuberculosis at the time the policy was applied for and issued, and that he died of that disease. All the attending circumstances corroborate their testimony. The policy was issued about the middle of April and delivered about the middle of May. The insured died of tuberculosis on the 16th day of June thereafter. Thus the undisputed evidence shows that the - insured had tuberculosis at the time the policy was issued to him and died of that disease within a short time thereafter. There is no statute in this State or ground of public policy which would prevent a contract of this sort from being valid. Hence the parties are bound by the provisions of the contract which they made.

This principle was recognized in. Carland v. General Accident, Fire & Life Assurance Corporation, 122 Ark. 168. There a policy of insurance agreed to pay the insured a certain sum monthly in the event of an illness resulting in total disability, if the disability occurred by reason of illness that was contracted and began after the policy had been maintained in continuous force for sixty days. It was held that the insured could not recover under the policy, when the illness was contracted within sixty days after the issuance of the policy, although it continued until after the expiration of the sixty-day period.

In American National Insurance Company v. Otis, 122 Ark. 219, the policy provided that, in case death occurred from any cause within five weeks from the date of the reinstatement of. a policy, the company should not be liable, and it was held- that, under the express terms of the policy, the .company was not liable where the insured died within less than five weeks after the policy was reinstated. See also Metropolitan Life Ins. Co. v. Fitzgerald, 137 Ark. 366.

Inasmuch as the undisputed evidence shows that the insured had tuberculosis at the time he applied for the policy, and it was issued, and that he died from that disease a short time after the policy was issued, under the express terms of the policy the insurance company was not liable, and the circuit court erred in not directing a verdict for it.

For that error the judgment will be reversed, and, inasmuch as it seems to have been fully developed, the cause will be dismissed.