315 Mass. 375 | Mass. | 1944
This is an action of contract to recover total and permanent disability benefits, under a policy of fife insurance issued to the plaintiff by the defendant, for the four months beginning June 1, 1941, when, it was alleged, the disability commenced. There is no question but that the policy lapsed on February 8, 1940. The only issue presented on the merits is whether the evidence was sufficient to show that the lapse had been waived or that the defendant is estopped to deny that the policy was in effect at the time of the plaintiff’s disability.
The plaintiff went to the defendant’s branch office on February 21, 1940, gave one Perry, the defendant’s reinstatement clerk, a check for the premium then overdue and signed an application for reinstatement. He testified that the paper that he signed was represented to be a receipt and that there was no writing upon it when he signed. Perry testified that his practice was to read the questions to an applicant who had difficulty in reading, and to put down the answers and then have the applicant sign. It is undisputed that the plaintiff was treated by a physician within two years of the date of the application and that the answer “No” to the question in the application whether he had been so treated was not true. There was also evidence indicating that the answer to another question was not truthful. The application was approved by the defendant’s cashier. Thereafter, the plaintiff paid quarterly payments of premiums as they became due up to the time of his disability. After he notified the defendant of his disability, the defendant under the date of July 17, 1941, wrote him “that it elects to and does hereby rescind the reinstatement” on account of the failure of the plaintiff to disclose in the application for reinstatement that he had been treated by physicians within two years of the application. The policy provided that it could be reinstated “upon
The judge denied the defendant’s motion for a directed verdict. He first submitted to the jury the question whether the answers to the questions on the reinstatement application were filled in with the authority and approval of the plaintiff. The jury answered “No.” He then instructed the jury at length on the issue whether a reinstatement had been effected by means of waiver. The jury returned a verdict for the plaintiff. The judge on leave reserved ordered the entry of a verdict for the defendant, subject to the exception of the plaintiff.
A question has been raised as to the scope of the exceptions. The defendant contends that nothing is open other than the matters that were submitted to the jury. It relies upon cases where the excepting party is precluded, in arguing upon a motion for a directed verdict, from attacking the correctness of rulings of law and instructions to the jury to which he did not save exceptions at the trial. Button v. Crowley, 284 Mass. 308. Dunbar v. Ferrera Bros. Inc. 306 Mass. 90. See S. E. Rand Transportation Co. v. Boston & Maine Railroad, 273 Mass. 327. The judge, in charging the jury after they had brought in an answer to the question that had been submitted to them, told the jury that he intended to charge them on “the remaining issues in the case” although the instructions covered only the subject of waiver. He made no explicit ruling that the plaintiff could not recover on any other ground. The plaintiff did not disclaim any ground upon which he thought liability of the defendant might be proved. He was apparently satisfied with the charge as far as it went for he made no objections to it.
The plaintiff was not harmed by the action of the judge in requiring the instructions to the jury to be made a part of the bill of exceptions, and the plaintiff’s exception thereto must be overruled.
We now consider the action of the judge in ordering the entry of a verdict for the defendant on leave reserved. We start with the undisputed fact that the policy had lapsed before February 21, 1940, when the plaintiff went to the defendant’s office and gave Perry a check for the premium then in arrears and signed a paper, which the plaintiff testified was represented by Perry to be a receipt but which was in fact an application for reinstatement. It is undisputed that at least one of the answers appearing upon this application was false, but it is settled by the jury’s answer to the question submitted to them that these answers were not filled in with the knowledge or approval of the plaintiff. The jury could find that they were filled in by Perry after the plaintiff had signed the application. The application when completed did not truthfully furnish evidence of insurability satisfactory to the defendant, although on its face it appeared to do so. Whether the plaintiff thought he was signing a receipt when he in fact signed the application or whether he then intended to sign an application, it follows that the paper that he signed was ineffectual to secure a reinstatement in accordance with the terms of the policy. This would be true if Perry, through mistake or negligence, or intentionally, filled in the answers which were not true. Clark v. Mutual Life Ins. Co. 251 Mass. 1. Santarpio v. New York Life Ins. Co. 301 Mass. 207.
But reinstatement in compliance with the terms of the policy not having been effected, the plaintiff next contends that there was a reinstatement either by waiver or by estoppel, or that the lapse of the policy was waived, or that the defendant was estopped to deny that the policy was in force and effect in June, 1941, when his disability occurred for which he seeks benefits under the policy.
A fraudulent misrepresentation of the nature and contents of a writing by which one was induced to sign it may render the instrument voidable. Barrett v. Conragan, 302 Mass. 33. Shaw v. Victoria Coach Line, Inc. 314 Mass. 262. The plaintiff, however, is not seeking to set aside the application. Indeed, as an application it had no validity. The contention now is that he was misled by Perry in thinking he had signed a receipt and that, he having paid the premium then in arrears and all subsequent premiums up to the time of his disability, the company had waived the lapse of the
The plaintiff must be assumed to have known the terms of the policy as to the limitations upon Perry’s authority in acting upon matters dealing with the reinstatement of the policy, and that reinstatement could not be accomplished in accordance with the provisions of the policy unless the plaintiff furnished evidence of insurability satisfactory to the defendant. He must have known that reinstatement could not be effected in compliance with the policy merely by paying the premium then in arrears and by giving Perry a receipt for a check. Fonseca v. Cunard Steamship Co. 153 Mass. 553. Parker v. Middlesex Mutual Assurance Co. 179 Mass. 528. Atwood v. Caledonian American Ins. Co. 206 Mass. 96. Urbaniak v. Firemen’s Ins. Co. 227 Mass. 132. Souza v. Metropolitan Life Ins. Co. 270 Mass. 189. Northern Assurance Co. v. Grand View Building Association, 183 U. S. 308, 361. Aetna Life Ins. Co. v. Moore, 231 U. S. 543.
The filing of an application was a condition precedent to the reinstatement of the policy. It was the duty of the plaintiff to see that such an application was properly made out and filed. If the application filed by Perry was invalid because of false answers made by him without the plaintiff’s authority, the defendant would not be bound by the conduct of Perry, nor would it be held to have waived its rights to insist upon observance of the terms of the policy relative to reinstatement, nor would it be estopped to challenge the validity of the reinstatement, even though the plaintiff did not know that Perry filled in false answers and, relying upon the application, continued to pay all subsequent premiums. Worcester Bank v. Hartford Fire Ins. Co. 11 Cush. 265. Kyte v. Commercial Union Assurance Co. 144 Mass. 43. Holden v. Metropolitan Life Ins. Co. 188 Mass. 212. Reidy v. John Hancock Mutual Life Ins. Co. 245 Mass. 373. Clark v. Mutual Life Ins. Co. 251 Mass. 1. Kukuruza v. John Hancock Mutual Life Ins. Co. 276 Mass. 146. Lopardi v. John Hancock Mutual Life Ins. Co. 289 Mass. 492.
If the plaintiff is precluded, by the mistake, negligence or even fraud of Perry in making out false answers without the plaintiff’s authority, from relying upon the application, it is difficult to perceive any reason why he is not also precluded from relying upon waiver or estoppel arising out of the alleged fact that he was induced to sign a receipt through the fraud of Perry while the latter was dealing with the plaintiff with reference to the reinstatement of the policy. If the defendant is not bound by Perry’s conduct in making out false answers, it ought not to be bound by his conduct in procuring the receipt. Indeed, we think the position of one who relies upon an application for reinstatement which through the fraud, neglect or mistake of a reinstatement clerk turns out to be invalid is stronger than the position of one relying upon a receipt, procured by fraud of the defendant’s clerk, which he must be assumed to know was insufficient to effect a reinstatement in accordance with the terms of the policy. Whether the fraud of Perry took one form or the other, the defendant was not prevented from dealing with the application upon its face value and thereafter dealing with the policy as one that had been reinstated and accepting the subsequent premiums upon that basis.
The unconditional acceptance of premiums by an insurance company, after full knowledge of the breach of the conditions of a policy or its lapse for the nonpayment of premiums, ordinarily constitutes a waiver of the breach or lapse. Shea v. Massachusetts Benefit Association, 160 Mass. 289. White v. McPeck, 185 Mass. 451. McNicholas v. Prudential Ins. Co. 191 Mass. 304. Paloeian v. Day, 299 Mass. 586. See G. L. (Ter. Ed.) c. 175, § 108 (f) (5). Compare G. L. (Ter. Ed.) c. 175, § 132 (11). Where the payment is made for the purpose of reviving a lapsed policy and is accepted by the company upon that basis, the policy becomes operative upon the acceptance of the payment. That principle is not applicable here where the evidence indicates
Exceptions overruled.