If an insurance company does business in a state, it must do so
subject to such valid regulations as the state adopts.
A state may adopt such public policy as it deems best, provided
it does not in so doing come into conflict with the federal
Constitution, and, if constitutional, the legislative will must be
respected even though the courts be of opinion that the statute is
unwise.
The statute of Missouri that suicide, unless contemplated when
the policy was applied for, shall be no defense to actions on
policies of life insurance is a legitimate exercise of the power of
the state, and a stipulation in a policy that the company shall
only be liable for a portion of the amount in case of suicide, not
contemplated when the policy was applied for, is void, and cannot
be set up as a defense.
Whatever tends to diminish a plaintiff's cause of action or to
defeat recovery in whole or in part amounts in law to a
defense.
144 F. 356 reversed.
This is a suit upon an accident policy of insurance issued
November 3, 1900, by the Aetna Life Insurance Company of Hartford,
Connecticut, upon the life of James Whitfield, a resident of
Missouri. The policy specifies various kinds of injuries; also, the
amount that will be paid by the company on account of such injuries
respectively. It provides:
"If death results solely from such injuries within ninety days,
the said company will pay the principal sum of $5,000 to Amanda M.
S. Whitfield, his wife, if living; and, in event of the death of
said beneficiary before the death of the insured, to the executors,
administrators, or assigns of the insured."
The policy recites that it was issued and accepted by the
assured, James Whitfield, subject to certain conditions, among
which are these:
". . . 5. In event of death, loss of limb or sight, or
disability due to injuries intentionally
Page 205 U. S. 490
inflicted upon the insured by any other person (except assaults
committed for the sole purpose of burglary or robbery), whether
such other person be sane or insane, or under the influence of
intoxicants or not, or due to injuries received while fighting or
in a riot, or due to injuries
intentionally inflicted upon the
insured by himself, or due to suicide, sane or insane, or due
to the taking of poison, voluntarily or involuntarily, or the
inhaling of any gas or vapor, or due to injuries received while
under the influence of intoxicants or narcotics -- then, in all
such cases referred to in this paragraph, the limit of this
company's liability shall be
one-tenth the amount
otherwise payable under this policy, anything to the contrary in
this policy notwithstanding. . . ."
"8. The maximum liability of the company hereunder in any policy
year shall not exceed the principal sum hereby insured, and in no
event will claim for weekly indemnity be valid if claim is also
made for any of the stated amounts herein provided for specified
injuries, based upon the same accident and resulting injuries."
The insured died April 7th, 1902, the plaintiff, his widow and
the beneficiary of the policy, alleging in her petition that he
died "from bodily injuries, effected through external, violent, and
accidental means, and by a pistol shot." The petition also states
that the company, after receiving proofs as to the death of the
insured, offered to pay $500 as the full amount due by § 5 of
the policy, but refused to pay more. The plaintiff asked a judgment
for $5,000 with interest from the date of the death of the
insured.
The company, in its answer, denied liability for the whole
principal sum, and averred, among other things, that, by the terms
of the policy,
"in the event death is caused by intentional injuries inflicted
by the insured or any other person, whether such person be sane or
insane, or while fighting or in a riot, or by suicide, sane or
insane, or by poison, or by inhaling gas or vapor, or while under
the influence of intoxicants or narcotics, then the amount to be
paid shall be
one-tenth of the principal sum, or $500; . .
. that said James Whitfield died from
Page 205 U. S. 491
bodily injuries caused by a pistol shot intentionally fired by
himself for the purpose thereby of taking his own life; that the
cause of the death of said Whitfield was suicide."
It was not averred in the answer that the insured contemplated
suicide when applying for a policy.
The plaintiff demurred to the answer. The demurrer was
overruled, and the plaintiff filed a reply, admitting that the
insured "died from bodily injuries caused by a pistol shot fired by
himself, and the cause of his death was suicide," but averring that
the shot was fired and the suicide committed at a time when the
insured was "incapable of realizing or knowing, and when he did not
realize or know, what he was doing or the consequences of his
act."
The case -- a jury having been waived in writing -- was tried by
the court upon an agreed statement of facts, one of which was that
the insured died
"from bodily injuries caused by a pistol shot intentionally
fired by himself for the purpose of thereby taking his own life;
that the cause of the death of said Whitfield was suicide."
The circuit court held that the plaintiff was not entitled to
recover $5,000, but only $500, and judgment for the latter amount
was entered. 125 F. 269. That judgment was affirmed by the circuit
court of appeals, 144 F. 356, and the case is here upon writ of
certiorari.
Page 205 U. S. 494
MR. JUSTICE HARLAN delivered the opinion of the Court.
When the policy in suit was issued, and also when the insured
committed suicide, it was provided by the statutes of Missouri
that,
"in all suits upon policies of insurance on life hereafter
issued by any company doing business in this state, to a citizen of
this state, it shall be no defense that the insured committed
suicide unless it shall be shown to the satisfaction of the court
or jury trying the cause that the insured contemplated suicide at
the time he made his application for the policy, and any
stipulation in the policy to the contrary shall be void."
Rev.Stat.Missouri, 1879, § 5982;
ib., 1889, §
5855;
ib., 1899, § 7896.
Assuming -- as upon the record we must do -- that, within the
true meaning of both the statute and the policy, the insured
Page 205 U. S. 495
committed suicide without having contemplated self-destruction
at the time he made application for insurance, the question arises
whether the contract of insurance limiting the recovery to
one-tenth of the principal sum specified was valid and
enforceable.
1. That the statute is a legitimate exertion of power by the
state cannot be successfully disputed. Indeed, the contrary is not
asserted in this case, although it is suggested that the
statute
"seemingly encourages suicide, and offers a bounty therefor,
payable not out of the public funds of the state, but out of the
funds of insurance companies."
There is some foundation for this suggestion in a former
decision of this Court in which it was held that public policy,
even in the absence of a prohibitory statute, forbade a recovery
upon a life policy, silent as to suicide, where the insured, when
in sound mind, willfully and deliberately took his own life.
Ritter v. Mutual Life Insurance Co., 169 U.
S. 139,
169 U. S. 154.
But the determination of the present case depends upon other
considerations than those involved in the
Ritter case. An
insurance company is not bound to make a contract which is attended
by the results indicated by the statute in question. If it does
business at all in the state, it must do so subject to such valid
regulations as the state may choose to adopt. Even if the statute
in question could be fairly regarded by the court as inconsistent
with public policy or sound morality, it cannot, for that reason
alone, be disregarded, for it is the province of the state, by its
legislature, to adopt such a policy as it deems best, provided it
does not, in so doing, come into conflict with the constitution of
the state or the Constitution of the United States. There is no
such conflict here. The legislative will, within the limits stated,
must be respected if all that can be said is that, in the opinion
of the court, the statute expressing that will is unwise from the
standpoint of the public interests.
See Northwestern Life Ins.
Co. v. Riggs, 203 U. S. 243.
2. Did the courts below err in adjudging that the policy in suit
was not forbidden by the statute? Can an insurance
Page 205 U. S. 496
company and the insured lawfully stipulate that, in the event of
suicide not contemplated by the insured when applying for a policy,
the company shall not be bound to pay the principal sum insured,
but only a given part thereof? Will the statute, in a case of
suicide, allow the company, when sued on its policy, to make a
defense that will exempt it, simply because of such suicide, from
liability for the principal sum?
We cannot agree with the learned courts below in their
interpretation of the statute. The contract between the parties,
evidenced by the policy, is, we think, an evasion of the statute,
and tends to defeat the objects for which it was enacted. In clear,
emphatic words the statute declares that in all suits on policies
of insurance on life it shall be no defense that the insured
committed suicide, unless it be shown that he contemplated suicide
when applying for the policy. Whatever tends to diminish the
plaintiff's cause of action or to defeat recovery in whole or in
part amounts in law to a defense. When the company denied its
liability for the whole of the principal sum, it certainly made a
defense as to all of that sum except one-tenth. If, notwithstanding
the statute, an insurance company may by contract bind itself, in
case of the suicide of the insured, to pay only one-tenth of the
principal sum, may it not lawfully contract for exemption as to the
whole sum or only a nominal part thereof, and, if sued, defeat any
action in which a recovery is sought for the entire amount insured?
In this way, the statute could be annulled or made useless for any
practical purpose. Looking at the object of the statute, and giving
effect to its words according to their ordinary, natural meaning,
the legislative intent was to cut up by the roots any defense, as
to the whole and every part of the sum insured, which was grounded
upon the fact of suicide. The manifest purpose of the statute was
to make all inquiry as to suicide wholly immaterial except where
the insured contemplated suicide at the time he applied for his
policy. Any contract inconsistent with the statute must be held
void.
Page 205 U. S. 497
In
Berry v. Knights Templars' &c. Co., 46 F. 441,
which was an action upon a policy of life insurance, it appears
that the policy, among other things, provided that, in the case of
the self-destruction of the insured, whether voluntary or
involuntary, sane or insane. the policy should be void. Judgment
was given for the plaintiff. The circuit court said:
"It is contended that the provision in the policy declaring that
it shall be void if the assured commits suicide is a waiver or
nullification of the statute which declares such a stipulation in a
policy 'shall be void.' The statute is mandatory and obligatory
alike on the insurance company and the assured. Its very object was
to prohibit and annul such stipulations in policies, and it cannot
be waived or abrogated by any form of contract or by any device
whatever. The legislative will, when expressed in the peremptory
terms of this statute, is paramount and absolute, and cannot be
varied or waived by the private conventions of the parties."
Upon writ of error to the circuit court of appeals, the judgment
was affirmed, that court saying:
"The company refused to pay the full amount named in the policy,
claiming that, by the express provisions of the policy,
self-destruction by the insured, whether sane or insane, rendered
the contract for the payment of $5,000 void, and the company was
only bound to pay the amount which had been paid in assessments by
the insured. The action was brought in the Circuit Court for the
Western District of Missouri to recover the full sum of $5,000. The
case was tried to the court, a jury being waived. The parties
stipulated that the company was liable for the full amount claimed
by the plaintiffs, unless excused by the clause in the policy
providing that the same should be void in case of suicide. . . .
Judgment in favor of plaintiffs having been entered for the full
amount of the policy, the case was brought to this Court upon writ
of error. . . . In our judgment, the court below ruled correctly in
holding that the policy sued on was a contract made in Missouri,
and, as such, that the provisions of § 5982 [the same as the
statute now in question] are applicable
Page 205 U. S. 498
thereto, and therefore the judgment is affirmed at costs of
plaintiff in error."
50 F. 511, 512, 515.
In
Knights Templars' Indemnity Co. v. Jarmon,
187 U. S. 197,
this Court had occasion to consider the scope and effect of the
statute here in question. That was an action upon a policy of life
insurance for $5,000. A recovery for the whole sum was sought, but
the company defended the action upon the ground that the provision
in the statute that it should be no defense that the insured
committed suicide related only to cases where he took his own life
voluntarily, while sane and in full possession of his mental
faculties; that the provision in the policy that "in case of the
self-destruction of the holder of this policy, whether voluntary or
involuntary, sane or
insane, . . . this policy shall
become null and void," applies, and exonerates the company from all
liability beyond that provided in the policy,
"'that, in the case of the suicide of the holder of this policy,
then this company will pay to his widow and heirs or devisees such
an amount of his policy as the member shall have paid to this
company on the policy in assessments on the same, without
interest.'"
This view of the statute was not accepted in the circuit court,
and there was judgment against the company for the whole sum
insured. That judgment was affirmed here upon certiorari to the
circuit court of appeals.
A leading case on the general subject is
Logan v. Fidelity
& Casualty Company, 146 Mo. 114, 119, 122-123, which was a
suit upon a policy which, according to the answer in the case,
contained stipulations and covenants to the effect that, in the
event of fatal injuries to the assured, wantonly inflicted upon
himself, or inflicted upon himself while insane, the company's
liability under its policy should be a sum equal to the premiums
paid, and that sum the policy provided should be in full
liquidation of all claims under it. The question before the court
was whether or not the statute here in question applied to such a
policy as the one there in suit. The trial court instructed the
jury to return a verdict for the full amount of
Page 205 U. S. 499
the policy, with interest. The court said:
"The error into which respondent has fallen is in assuming that
§ 5855 [the statute now in question] was intended to affect a
particular line, class, or department of insurance, as the same has
been classified for legislation. The real object of the section, as
the clear terms of its language express, is to affect
all
policies of insurance on life from whatever class, department,
or line of insurance the policy may be issued, or by whatever name
or designation the company may be known. It is policies of a given
kind, and not companies of a class, that are to be affected by the
provisions of § 5855. The section was enacted clearly to
protect all policyholders
of insurance on life against the
defense that the insured committed suicide, all provisions in the
policies to the contrary notwithstanding, unless, as provided in
the section, it can be shown that the insured contemplated suicide
at the time he made application for the policy. . . . When a policy
covers loss of life from external, violent, and accidental means
alone, why is it not insurance on life? Such a provision
incorporated in a general life insurance policy admittedly would be
insurance on life; then why less insurance on life because not
coupled with provisions covering loss of life from usual or natural
causes as well? If one holds a general life policy and an accident
policy, and is killed by lightning or commits suicide, so that he
may be said to have died by accidental means, both the companies
should pay, and the stipulation against liability in the event of
suicide in the policies should be no more a defense against the
suit upon the accident policy, providing against death from
accidental cause, than against the policy which goes further and
covers death from other causes as well. No such exception or
exemption is found in the plain and comprehensive language of
§ 5855. . . . No rule of construction, short of one applied
for distortion and destruction, can relieve accident insurance
companies, issuing policies of insurance on life in this state,
from the operation and influences of § 5855, which, in plain
and unambiguous terms, declares that in all suits upon policies
of
Page 205 U. S. 500
insurance on life thereafter issued, it shall be no defense that
the assured committed suicide, unless it shall have been shown, to
the satisfaction of the court or judge trying the cause, that the
insured contemplated suicide at the time of making his application
for the policies; all stipulations in the policy to the contrary
being void."
In
Keller v. Travelers' Insurance Company, decided by
the St. Louis Court of Appeals, 58 Mo.App. 557, 560, 561, we have a
decision very much in point. That was an action on an insurance
policy for $2,500. The company defended upon the ground that, by
the terms of the policy, if the insured died of suicide, whether
the act be voluntary or involuntary, it should be liable for the
then full net value of said policy per the American Experience
Table of Mortality and four and one-half percent interest, and no
more, and that the same should be paid in manner and form as
provided in the policy for the payment thereof in the event of
death. The defense was that the insured committed suicide, and that
the full net value of the policy, according to the contract, was
only $814.50, and no more. The defense was overruled and judgment
given for the principal sum. That judgment was affirmed in the
court of appeals, the court saying:
"The plain purpose of the statute,
supra, was to
prevent the insertion in policies of life insurance of exceptions
to liability on the ground of the suicide of the insured, unless it
could be proven 'that the insured contemplated suicide at the time
he made the application for the policy.' This was, in effect, a
legislative declaration of the public policy of this state. That it
was intended to limit the power to contract for a lesser liability
in cases of death by suicide, not within the limitation expressed
in the statute, is also apparent from its terms, to-wit: 'And any
stipulation to the contrary shall be void.' . . . The fact that the
premium warranted, and the policy guaranteed, full insurance in
case of the death of the insured for any cause not specified in the
clause set up in the defendant's answer, demonstrates that said
clause was designed to modify the liability of the
Page 205 U. S. 501
insurance company if the insured committed suicide. It
necessarily follows, if this stipulation as to a decreased
liability in the event of death by suicide is enforced, that it is
some defense to the otherwise full liability agreed upon
in the policy. As the statute in question declares that suicide,
not committed as therein set forth, is '
no defense,' we
cannot hold that the present stipulation can be enforced without
violating the plain terms of a mandatory statute which the parties
have no power to alter or abrogate."
Without further discussion, we adjudge that, under the statute
in question, anything to the contrary in the policy issued by the
insurance company notwithstanding, where liability upon a life
policy is denied simply because of the suicide of the insured, the
beneficiary of the policy can recover the whole of the principal
sum, unless it be shown that the insured at the time of his
application for the policy, contemplated suicide. The judgment must
therefore be reversed and the case remanded for further proceedings
in conformity with this opinion and consistent with law.
It is so ordered.
