275 Mo. 84 | Mo. | 1918
This is an action brought by plaintiff as administrator on a life insurance policy, alleged to have been issued by defendant to one Delmar Ridge-way. Upon the sustaining of 'a demurrer to defendant’s answer, except as to its general denial, and its refusal to plead further, the plaintiff made formal proof and the court directed a verdict in his favor in the amount of the policy. Prom this judgment the defendant appeals.
The petition contains all the formal averments necessary to a pleading of this character.
The answer consists, first, of a general denial; second, a special defense, and cross-bill, that the policy was caused to be issued on the application of a person who falsely represented himself to be Delmar Ridge-way, and that defendant issued said policy relying upon such false and fraudulent representation; that the person who represented himself to be Delmar Ridgeway, and who signed the application for the policy, was not in fact Delmar Ridgeway, but fraudulently imposed upon the defendant in thus falsely representing himself in the procurement of said policy.
That the plaintiff, with intent to defraud the defendant, caused the alleged Delmar Ridgeway to apply for the policy and to undergo the required medical examination therefor, and furnished the money to pay the premium on the policy; that plaintiff fraudulently caused the alleged Delmar Ridgeway to execute a will purporting to he. the will of Delmar Ridge-way, bequeathing the policy to the plaintiff. . That five months after the issuance of the policy, Delmar Ridgeway died and plaintiff made application for and
For a further' special defense and cross-bill, after pleading the foregoing affirmative defenses, defendant alleges that the application for insurance herein was not made in good faith by the alleged Delmar Ridge-way, for the beneficiary named in the policy, but was made at the instigation and request of the plaintiff- for his own use and benefit. That plaintiff paid the first semi-annual premium on the policy, and caused'the alleged Delmar Ridgeway to execute a will bequeathing the policy to the plaintiff. That the policy never was delivered to the alleged Delmar Ridgeway, but possession of same was fraudulently kept and maintained by the .plaintiff, and the plaintiff had no insurable interest in the life of the insured.
This is followed by a prayer for specific relief in that the policy be canceled, and for naught held, and that defendant be hence dismissed with its costs and for such other and further relief as to the court may seem proper.
Plaintiff’s demurrer to the first and second counts of the- answer, stated separately, was that neither constituted a defense to the petition, and if the facts stated therein were true, they showed that defendant had a full and complete remedy at law.
The case coming on for hearing, after the sustaining of the demurrer, as aforesaid, the plaintiff made formal proof of the issuance of the policy, the payment of the premium, the .death of deceased, the probating of the will of the latter, and the appointment of plaintiff as administrator. The defendant offered proof to sustain its general denial, and in support of its several special defenses, all of which testimony was excluded.
The matter having been heard before a jury, the court, at the instance of the plaintiff, gave the following peremptory instruction:
“The court instructs the jury that under the pleadings and evidence in this case the plaintiff is en
Defendant asked the following instructions, which were refused:
“The court instructs the jury that if you believe and find from the evidence that the application for the policy in this suit was not signed by Delmar Ridge-way, but, on the contrary, was signed by some other person, falsely and fraudulently representing himself to be Delmar Ridgeway, and that this fact was not known to the defendant, then your verdict must be in favor of the defendant.
‘ ‘ The court instructs ■ the jury that if you believe and find from the evidence that the plaintiff John C. Carter caused an application to be made for: a policy of insurance purporting to be upon the life of one Delmar Ridgeway and that the plaintiff caused an alleged Delmar Ridgeway to execute a last will and testament leaving the proceeds of said policy to the plaintiff and that the plaintiff was not a relative of said Delmar Ridgeway or dependent upon said Delmar Ridgeway or a creditor of said Delmar Ridgeway and had no insurable interest in the life of said Delmar Ridgeway, then your verdict must be in favor of defendant.”
The jury found in favor of the plaintiff, as directed by the court. From this verdict, after the overruling of its motion for a new trial, defendant appealed.
Plaintiff contends, and the trial court so held, that this section applies not only to policies procured through misrepresentations made by the applicant for insurance, but as well to those procured by one simulating the applicant. This is a rather startling proposition, and if the statute be so construed, its effect will be to render an insurance contract immune from a plea of invalidity for fraud, although obtained through false pretenses made by another than the insured, and without his knowledge. No amplification of words is necessary to the conclusion that such a construction, instead of lessening the possibility of fraud, as was evidently intended by the enactment of the section, will tend rather to promote the same. Aside, however, from this general conclusion, amply sustained by the rules of interpretation, a consideration of the nature of life insurance contracts and the conditions under which they are uniformly executed, will aid in determining the meaning, purpose, and consequent limitation of the section.
An examination of the applicant is a condition precedent to the issuance of a life insurance policy. Prom its terms, it is evident that this section was intended to be limited to the facts elicited in this examination in its providing that the misrepresentations referred to shall be those “made in obtaining or securing” the policy. The limitation is express, and under the rule embodied in the maxim of expressio unius, etc., other misrepresentations outside of or independent of such examination and which may affect the validity of the policy are excluded.
Viewed from another vantage the propriety of the restricted application of the section becomes apparent. It is in the nature of a limitation. As such, it can have no operative force unless there exists a policy otherwise valid upon which it can operate. An invalid policy has no legal existence and can form no basis for the operation of a limitation. As applied to the case at bar, it fob
Furthermore, the words employed in defining the materiality of the misrepresentations referred to in the section, are, in themselves, sufficiently definite to enable the character of such misrepresentations to be determined. The section prescribes that only such misrepresentations are material as contribute to the death of the insured; one which so contributes must be such an one, which, if it had not been made, the policy would not have been issued. To illustrate, the applicant answers falsely in regard to never having had a certain disease and that he is then in sound health. He dies soon thereafter of this disease. If he had answered truly, the issuance of the policy would have been precluded. False answers to any other material inquiries would have had a like effect in that they would have rendered the applicant an uninsurable risk. This but tends to emphasize the fact that the right of the insured to the policy is determined by his examination, and to such mispresentations, therefore, as are made therein, the section must necessarily have reference. What is meant by the section, in other words, is that no false statement made in the application for the policy shall avoid the same unless such statement concealed a condition which contributed to the death of the insured.
Otherwise construed, the validity of the policy in other respects is left out of consideration. No limit, except as indicated in. defining their materiality, is to be placed upon any representations made in securing the policy; and, although, they may involve the grossest
Such a construction is not in accord with a reasonable interpretation of the words employed. Its effect in the administration of the law of insurance under our statute would be to foster fraud. It outrages a righteous sense of justice and is, therefore, foreign to the intention of the Legislature in the enactment of the section. Given the restricted construction we have indicated, however, it serves a useful and practical purpose in placing a reasonable limit upon the effect of misrepresentations the interposition of which has been deferred until the insured is dead.
The construction of the section under the facts in issue is one of first impression in this State. Our reports are replete with cases discussing and determining the effect of various forms of misrepresentations in obtaining policies, but these are found to be limited to misrepresentations made by the applicants themselves and not by others.
The Supreme Court of Kentucky, in ruling upon a case (So. States Mutual Life Ins. Co. v. Herlihy, 138 Ky. 359, 128 S. W. 91) involving the defense made here of false personation of the insured in procuring the policy, says, in effect, that “although the company could not defeat a recovery upon the ground that the insured in the application made false and material answers, this did not deprive it of the right to show that the insured was not the person who made application for the insurance and who was, in fact examined; or that the insurance was procured as a part of a conspiracy between the insured and others who had no insurable interest in her life for the purpose of practicing a fraud upon the company. These defenses were based upon facts existing independent of the matter
This case is apposite here because the rule announced therein, expressed in general terms, is exceedingly elementary and applicable alike to all obligations. It is that a. contract conceived in fraud has no legal existence and that this fact may be shown to defeat an action brought thereon (Pac. Mut. Life Ins. Co. v. Glaser, 245 Mo. 1. c. 390). Thus, it appears, aside from the inapplicability of Section 6937, supra, that the defense sought to be made by the defendant in its special answer and cross-bill, that no contract had ever been made between it and the insuréd, should have been permitted. The trial court therefore erred in sustaining the plaintiff’s demurrer.
It was held in Sprague v. Rooney, 104 Mo. 1. c. 360, that the effect of a general denial is to deny the legality of a contract, sought to be enforced, and to authorize the admission of evidence, to show that the same, although on its face valid, was intended to accomplish an illegal object. This case was expressly overruled in McDearmott v. Sedgwick, 140 Mo. 1. c. 182, in which the following ruling was announced: Where there is nothing on the face of the petition to indicate other than a valid contract, if it is to be invalidated by some extrinsic matter, such matter must be pleaded. This ruling is in harmony with the current of anthorjty, not only in the earlier, but the later cases as well. [School Dist. v. Sheidley, 138 Mo. 1. c. 690; Bell v. Warehouse Co., 205 Mo. 1. c. 493; Shohoney v. Railroad, 231 Mo. 1. c. 147.]
Nothing appearing on the face of the petition to disclose the fraud on which the contract was founded, and the same being susceptible of formal proof without a showing as to its legality, the defense of its legal non-existence was not available under a general denial.
The special answer and cross-bill alleged with sufficient certainty the grounds of the defense and the reasons for the affirmative relief prayed for. The latter consisted in a prayer for a decree canceling the
For the reasons stated, this case should be reversed and remanded, to he proceeded with as herein indicated.
It is so ordered.