43 N.Y.S. 527 | N.Y. App. Div. | 1897
Action to recover upon a policy of life insurance issued by the defendant upon the life of Elizabeth A. Kelly for the benefit of the plaintiff. Defense, breach of warranty, in that certain statements and answers contained in the application upon winch the policy was issued were untrue. The application, among other things, provided:
“ It is hereby agreed that the answers and statements in this application (Parts 1 and 2), whether written by the applicant or not, are warranted to be full, complete and true, and that this agreement and the constitution or by-laws of the association, with the amendments thereto, together with this application, are hereby made part of any policy that may be issued hereon; that if any of the answers or statements made are not full, complete and true, or if any condition or agreement shall not be fulfilled as required by such policy, then the policy issued hereon shall be null and void, and all money paid thereon shall be forfeited to said association; that the person soliciting or taMng this application, and also the medical examiner, shall be the agents of the applicant as to all statements and answers in this application, and no statements or answers made or received by any person, or to the association, shall be binding on the association, unless such statements or answers be reduced to writing and contamed in this ■application.”
In the application were the following questions and answers: “ 10. Has any proposal to insure the life of the applicant ever been postponed or declined ? If so, by what company or association, and for what reasons ? None.
“ 11. Has any proposal or application to insure the life of the applicant, or for membership, ever been made to any company, association or agent, upon which a policy or certificate of membership
“ 13. Has any physician given an unfavorable opinion upon the life of the applicant with reference to life insurance or otherwise; if so, state particulars ? No.” ■
Upon the trial it appeared without contradiction that the assured had, before the making of this application, applied for insurance to the Mutual Reserve Fund Life Association, and had been examined by the physician of that company; that, upon such examination, the physician had reported against the risk and the company had thereupon rejected the application. These answers were, therefore, rintrue, and constituted a breach of warranty which invalidated the policy upon which this action was brought, unless the plaintiff successfully avoided such result, by the evidence given at the trial, as to the transactions between the agent taking, the application and the beneficiary and- assured. All this evidence was taken under the objection and exception of the defendant. . .
The evidence was given by the agent, and the beneficiary, the ' plaintiff, and it was substantially as follows : They both testified that the agent called upon the plaintiff at her sister’s house; that he asked her the questions in the application and that she answered them, and . in answer to questions 10, 11 and 13 she told the- agent the truth ; that the assured had made, an application to the Mutual Reserve and had been rejected by that company, but that the agent, instead of writing the answers to these questions as she gave them, inserted the negative answers, to which reference has been made. The plaintiff testified that the application having been filled up, she took it to her mother and they, both signed it without, reading or knowing its real contents. The agent then, took the application, delivered it to the defendants, and upon this application the policy was issued.
The agent testified that he wrote the answers to these questions in the application, as he did, knowing the answers to be untrue, but the plaintiff testified that she supposed he Wrote them as she gave them, and did not know the contrary until after the death of the assured. There was no evidence given that the defendant or its officers had knowledge of the real facts or of the fraud of the agent. There was tío proof given as to authority conferred by the defendant upon the agent as to taking applications, except what was contained, in the
It seems to us that this parol evidence, under the provisions of the contract, of insurance, was inadmissible, and that it did not operate to avoid the breach of warranty and consequent invalidity of the policy. The contract was a valid one and should be enforced. It was clear and distinct in its terms. It was the evident intention of the defendant by its policies to protect itself in two respects: First, against any attempt by the agent and the insured conspiring together to defraud the company, by presenting to it an application containing false statements and answers, and securing a policy thereon, which would not have been issued if the truth had been known to-the company. Second, against any attempt by the beneficiary, after the death of the assured, by parol evidence, to avoid the effect of false statements and answers in an application upon which a policy was actually issued. To accomplish this purpose of self-protection, the defendant inserted the provisions in its policies. No construction can be given to the language of these provisions which will defeat the real protection to the defendant sought to be thereby secured. Here we have parol proof given by the beneficiary and the agent, both, to the effect that the statements and answers complained of as false and untrue were inserted in the application by" the agent with full knowledge and understanding that they were false and untrue.
It is claimed that neither the beneficiary nor the assured knew that the statements and answers which the agent did insert were contained therein when the application was signed and delivered to-the agent, but that they believed the truth was stated in the application. Proof of this claim was made by parol. Indeed, the knowledge of the agent, that the statements and answers were false, and the consequent fraud of the agent were shown only by parol proof, that is, by the statements made by the beneficiary to the agent. This is just what the contract, in effect, was designed to protect the defendant against. There are numerous cases in the books in which, in the absence of these provisions in the contract, it was held that, insurance companies were bound by the ■ knowledge of their agents, acquired by such statements to them, proved by parol.
It cannot be said, in view of these provisions in their policies, that agents, authorized merely to solicit and receive applications to be presented to the companies, so far represent the companies as that the companies áre, notwithstanding Such provisions^ bound and •estopped by the knowledge of such agents, or the- information received by them, as to the falsity or untruthfulness of the answers ■or statements in the application. These provisions in the policy specially negative such claim.
In the absence of these provisions it was held that it was part of the ■duty of the agents to fill up the applications, and that in so doing they represented the companies, but these provisions expressly limited the scope of the agency by providing that the agents in doing these nets should be the agents of the applicants and not of the. companies. We are unable, in any view of the case, to see how it can be said that the defendant was in this case estopped from asserting the. warranty and the breach thereof as invalidating the policy. The
The views herein expressed are fully sustained by the authorities. Rohrbach v. Germania Fire Ins. Co. (62 N. Y. 47) was an action upon a policy issued for insurance against fire.
The statements made in the application were by its terms made warranties as to the facts stated. These statements were untrue, and it was held that there was a breach of warranty which prevented a recovery, though the applicant stated the facts truly to the agent, who filled up the application, and the error was that of the agent.
; By the policy it-was agreed that the agent should be deemed the agent of the assured and not of the company,, and it was held that the knowledge, of the agent, was immaterial and did not avoid -the effect of the .warranty. The court said : “ It is hereupon urged by the plaintiff that, the errors and omissions, were those of The defendant.- But the plaintiff and defendant have in the policy, the contract, between them, expressly agreed that Brand should be deemed the agent of the plaintiff and not of the defendant under any circumstances. ’* * * It is to be regretted that corporations, of the power and extended business, relations with all classes in the. community, which insurance companies have, should prepare for illiterate and confiding men contracts - so practically deceptive and nugatory; and should, in pases as free from fraud and wrong on the part of the insured as this is, hold their customers • to the letter of an agreement so entered into. I am aware that often the companies are made the victims of dishonest and designing persons, but I. cannot agree that the remedy for that is -to refuse to be bound by the acts of agents of their own selection when dealing with simple and unlettered men. If there should be less greediness for business, and . such care in the selection and appointment of agents as would insure, the confidence of the companies in their capability, discretion and integrity, it would not need that there be laid upon unwise policyholders an agreement to take the burden of the opposite qualities in those put forward to them as actors for the insurers. Buf we must take the contracts of the parties as we find them, and enforce them as they read. By the one before us the jfiaintiff has so fettered himself as to be unable to retain, as the case now stands, the real essence of his agreement. Though he has frankly and fully
“ Held to the letter and substance of his contract, the plaintiff made a breach of warranty and condition .precedent, upon the truth of which his contract rested, and for that reason "may not recover in this action as the facts now stand.”
Kabok v. The Phoenix Mut. Life Ins. Co. (21 N. Y. St. Repr. 203). was an action upon a life insurance policy, “wherein it was provided that the statements and answers in the application should be warranties,,and that the agent in the preparation of the application should be the agent of the assured and not of the company, and untruthful statements were inserted by the agent by mistake or otherwise. It was held that the policy was invalid and no recovery could be had thereon. The court said: “ The force and effect - of this clause was to render the acts of the agent in filling out the application, those of the applicant and of his wife for this policy of insurance. And being their acts, the defendant was not responsible for- the misconduct or misapprehension of the agent, through which these answers were incorrectly made a part of the application. But they were, by this clause, made the acts, representations and warranties of the applicants for the insurance. And for the consequence of their inaccuracy they, and not the' company, are the persons who were responsible. If the agent, inserted answers in the application which he Was not authorized' to make a part of it, it is to him and pot to the defendant that the plaintiff is entitled to look for indemnity. For as the agent of herself and her husband, which he was declared to be by this part of the application, he was bound to exercise reasonable care, to use a reasonable degree of attention in performing the service which in this manner he was employed to render. And if he failed to do that, either negligently or fraudulently, under well-settled principles of law he may be made liable for the consequences of that failure.But as long as he was,’ by the application, which was made a part of the insurance and adopted by the policy, the agent of the applicants for the insurance, they, and not the defendant in this controversy, must be charged with the responsibility of his acts.
“ But there neither the application nor the policy contained any provision or agreement that the agent filling out the application should, in doing-so, be held to be the agent of the applicants for the insurance and not of the company issuing the policy. And that fact so far distinguishes this case from the one now before the court as to deprive this authority of the effect it has been urged should be given to it by way of sustaining the action. The case, instead of being an authority for the plaintiff, in reality sustains the defense made by the company. For, in the course of the opinion, it was said: £ If the writing containing this representation had been prepared and signed by the plaintiff in his application for a policy of insurance on the life of his wife; and if the representation complained of had been inserted by himself, or by some one who was his agent alone in the matter, and forwarded to the principal office of the defendant corporation, and acted upon as true by the officers of the company, it is easy to see that justice would authorize them to hold him to the truth of the statement. And that, as they had no part in the mistake which he made, or in the making of the instrument which did not truly represent what he intended, he should not, after the event, be permitted to show his own mistake or carelessness, to the prejudice of the corporation.’ (Id. 232.) And it was. further added: ‘ It is not to be denied that the application logically considered is the work of the assured. And if left to himself or to such assistance as he might select, the person so selected ’ would be his agent and he alone would be responsible.’ ”
N. Y. Life Ins. Co. v. Fletcher (117 U. S. 519) was an action brought upon a life insurance policy, wherein it was provided that the statements and answers in the application were warranties, and that no statement to the agent not therein contained and thus transmitted to the company should be binding upon it. The agent, without the knowledge of the applicant, wrote down false answers, concealing the truth, the applicant signed the application without reading it, and it was by the agent transmitted to the company, and
“ The present case is very different from Ins. Co. v. Wilkinson (13 Wall. 222), and from Ins. Co. v. Mahone (21 id. 152). In neither of these cases was any limitation upon - the power of the-agent brought to the notice of the assured. Reference was made to-the interested and officious zeal of insurance agents to procure contracts, and to the fact that parties who were induced to take out. policies rarely knew anything concerning the company or its officers,, but relied upon the agent who had persuaded them to effect insurance, £ as the full and complete representative of the company in all that is said or done in making the contract,’ and the court held that the powers of the agent araprima facie coextensive with the business intrusted to his care, and would not be narrowed by limita
We do not deem it necessary to refer to further authorities. These are sufficient to indicate the well-settled rules of law applicable to the conceded facts in this case.
Our conclusion is that the judgment and order appealed from 'were erroneous, and should be reversed and a new trial ordered, ‘ with costs to appellant to abide event.
Van Brunt, P. J., Barrett, Bumsey and Patterson, JJ., ■concurred.
Judgment and order reversed, and new trial ordered, costs to appellant to abide event.