For the reasons here presented Judge Hatcher and I respectfully dissent.
Where a person who is protected by accident insurance is killed or injured while engaged in an occupation obviously more dangerous than that named in his application and policy, what is the status of the contracting parties? There are three possible alternatives: (1) to deny all right of recovery under the policy, (2) to require the insurer to pay the indemnity regardless of change of vocation, or (3) to permit recovery for such an amount as the premiums paid by the insured would have purchased at the rate fixed by the company for the more hazardous occupation. To deny all recovery under the policy would impose great hardship on the insured or his estate or beneficiary, for, although premiums would have been paid for protection of the life and limb of the insured, there would be no protection. And under the second alternative if recovery be enforced for the amount specified by the policy for death or injury, a wrong is thereby done the insurer because of the requirement that it discharge the burdens and meet the consequences of a risk which it had not assumed. The third alternative would seem to be fair and equitable in that it places no hardship *Page 263 on either party, and permits recovery on a definite basis in exact proportion to the premiums paid and the risk involved. Reason and justice therefore require that such latter course be upheld unless it be in clear violation of statute.
There is a statute of this state which requires that an insurance or casualty company such as the defendant "shall state on the face of its policies or certificates all agreements with the assured". Code 1931, 33-6-2. Construing and applying that section, this court held in Bowyer v. CasualtyCo., 72 W. Va. 333, 78 S.E. 1000, that an application for accident insurance may not be deemed a part of the contract unless attached to and made part of the policy, that mere reference to it in the policy is not sufficient; and in Addison v. Casualty Company, 100 W. Va. 1, 129 S.E. 711, it was held that reference in a casualty policy to a classification manual issued by the insurer does not make the manual a part of the contract. In that case the assured had obtained his policy under the classification of automobile repairman employed in a garage. He was killed while serving as mechanician on an automobile in a public race. The court held that under said statute it was error for the trial court to admit in evidence over the objection of the plaintiff, beneficiary under the policy, a paragraph of the classification manual which denominated the vocation of racing mechanician as uninsurable because of the extreme danger involved; that the said paragraph of the manual must be rated merely as a self-serving declaration; that the degree of danger involved was a question of fact not to be determined by the ex parte classification prepared by the defendant.
Plaintiff at bar takes the position that under the statute and the said two cases construing it the defendant's classification manual could not be referred to by the trial court for any purpose in determining the rights of the parties under the contract. We do not think that either theBowyer or the Addison case announces a principle which is controlling of the particular question here involved. In theBowyer case it was declared that the purpose *Page 264 of the statute is "to enable the insured or assured at all times to have before him the covenants and agreements which he is required to observe or perform and relieve him from the burden of relying upon his recollection of the terms of his contract." That statement is, of course, basically sound, and we would in no wise depart from it. In the Addison case the essence of the holding was that in the trial of an action on such policy reference may not be had to a classification manual, not attached to the policy as a part thereof, for the purpose of determining the degree of hazard of a particular vocation. For the reasons given in support of said holding, we likewise adhere to it as basically sound.
But where it appears from competent evidence at the trial that the assured has been killed or injured in a vocation more hazardous than that under which he was insured, we think that reference may then be had to the company's classification manual to determine the amount of insurance which the premiums paid by the assured will purchase under the more dangerous vocation in which he has become engaged subsequent to the obtaining of the policy. The statute certainly does not in terms inhibit such a course. Its requirement is that the insurer shall state on the face of the policy all agreements with the assured.
Where the parties, as at bar, specifically agree by a definite provision of the policy that if the assured changes to a more hazardous occupation and is injured or killed thereunder, he or his beneficiary shall receive such indemnity as the premiums paid by him would purchase under the more dangerous vocation, such rate to be determined from the insurer's classification manual, it would seem that the purpose of the statute, namely, to enable the assured "at all times to have before him the covenants and agreements which he is required to observe or perform" is entirely realized. The only matter left to reference aliunde is the premium rate to be determined from the company's classification manual which is too bulky a document to be attached to and made a part of every accident policy issued. *Page 265
While under the principle of the Addison case, supra, the classification manual may not be employed in evidence to determine a factual matter, such as the degree of hazard of a given occupation, we perceive no reason why the manual may not be consulted to determine the actuarial matter of the premium rate for a given vocation or calling. By their contract, the parties have agreed that such course might be taken. To extend the terms of the above quoted statute to preclude such course will produce a result at variance with the purpose of the statute. It was designed primarily for the protection of holders of accident policies. The interpretation adopted by the court will operate to the prejudice of such policy holders if the result will be that persons killed or injured in vocations more hazardous than those under which they were insured will be subjected to the risk of forfeiture of all rights under their policies because of breach of the condition pertaining to employment upon which the policies were issued.
The matter is thus discussed in McCarthy v. InsuranceCompany, 178 Ill. App. 502: "It is also well known that persons change their employment. In order to avoid the forfeiture of the policy and the loss to the insured of all the premium paid by him, in case, after the policy is issued, he embarks in some business more hazardous than the one he was engaged in when insured, it has come to be the practice of insurance companies to provide by some apt language in the policy some plan or scheme whereby, when the assured does change his occupation, the indemnity shall be proportionate to the hazard of the new employment and rate paid."
Our attention has been directed to two Missouri cases forcefully illustrative of the proposition here under consideration. And though it does not appear from the opinion whether Missouri has a statute similar to ours, the cases are nevertheless of great value on the basic principles involved. In Miller v. Life Insurance Co., (Mo.) 153 S.W. 1080, the deceased obtained an accident policy under the classification of traveling and supervising contractor. Later, while assisting some workmen in *Page 266 the installation of certain lighting and heating equipment, he was accidentally killed. The insurer by its manual of risks classified a working contractor as a more hazardous risk than a traveling and supervising contractor. For the purpose of establishing the fact, the manual was offered in evidence by the insurer, but it was held that the trial court properly refused to admit it in evidence. In the later case ofNewell v. Life Insurance Company, (Mo.) 258 S.W. 26, the deceased obtained an accident policy under the classification of butcher. Later, he was killed as an American soldier in action in France. His beneficiary was permitted to recover not the face of the policy but a reduced amount as prescribed by the non-forfeiture clause of the policy, the said clause being similar to the one under consideration at bar. The court held, as stated in the headnote: "The company's manual, or classification of risks, referred to in an accident policy as governing the amount of the company's liability, in case insured is injured after changing his occupation to one rated by the company in a more hazardous class, though not annexed or made a part of the contract in express terms, is admissible to show the classification of the occupations."
A very clear statement of the matters under consideration appears in Fuller's Accident and Employers' Liability Insurance, page 336:
"In most policies of accident insurance, the amount of the liability of the insurance company is dependent upon the occupation of the insured. The risks which are insured against are classified according to the employment, or occupation, and various rates or premiums are charged, according as the employment is more or less dangerous. Most policies provide that certain forbidden hazards shall render the policy void, as well as that the amount of the insurance shall be diminished in proportion to the increase of other hazards. The contract of insurance depends primarily and essentially upon an equitable adjustment of the premiums and the risks assumed. Under these policies of insurance *Page 267 the various occupations of life are divided into several classes, depending upon the degree of risk or hazard which they involve. Manifestly, one engaged in the sedentary pursuits of life is less liable to accident or accidental death than one engaged in the more dangerous pursuits, such as railroading, mining, sailing, and the like. The clause which provides for the reduced indemnity is regarded by the courts as a special contract, contemplating a future change of occupation by the assured. Such a change of occupation does not avoid the policy. It simply limits the amount of indemnity so as to accord with the increased hazard."
In the light of a statute such as ours, if an insurance company desires to proscribe certain hazards the same should be set forth in the policy or in a paper attached thereto as part thereof. That would solve situations such as arose in theAddison case. Reference may not in such instance be made to a classification manual. But where it appears from the evidence that the occupation in which the insured was killed or injured was in fact more hazardous than the one under which he was insured, we are of opinion that reference may be had to the classification manual to determine the rate applicable to such later occupation and thereby fix the extent of the liability of the insurer.
It appearing from the record that the plaintiff as beneficiary of her deceased husband has been paid by the defendant the amount of insurance which the premiums paid by her husband would purchase under the more hazardous occupation (the one in which he was killed) as provided in the defendant's classification manual, we are further of opinion that this court should affirm the action of the trial court in dismissing the plaintiff's action, nil capiat. *Page 268