69 N.J.L. 384 | N.J. | 1903
The opinion of the court was delivered by
This is an action upon a policy of insurance issued December 4th, 1899, by the defendant below (now
The declaration embodies a copy of the policy of insurance, with its conditions, and avers generally the performance of all conditions, pursuant to section 126 of the Practice act. Gen. Slat., p. 2554..' The defendant pleaded the general issue, and, in a special plea, set up a breach of conditions precedent, because of false answers alleged to have been' given by the insured in response to certain inquiries contained in the application for the insurance, which application, by the terms of the policy, is made a part of it; among others, the false answer, “None,” in reply to the question: “State amount of insurance you now carry on your life?” the false answer, “None,” in reply to the question: “Is there any other insurance in force on your life?” and the false answer, “No,” in reply to the question: “Have you ever been an inmate of an asylum or hospital; if so, when-and for what?”
. The policy sets forth that the engagements of the defendant company are undertaken “in consideration of the answers and statements contained in the printed and written application for this policy, all of which answers and statements are hereby made warranties and are hereby made part of this contract;” that the contract is “subject to the conditions set forth on the reverse side hereof, all of which are hereby made part of this contract, and are accepted by the insured and assured as part thereof as fully as if herein recited.” Among the conditions thus endorsed are the following, viz.: “Third. If any answer or statement in the application herein referred to is not true * * * ’this policy shall be void, and all
The application referred to in the-policy wa's made prior to the date of the latter, and passed into the possession of the company. It was made upon printed forms, and consists of three parts, designated respectively A, B and C. Part A is entitled “Application to the Metropolitan Life Insurance Co.,” is dated November 19th, 1899, and signed by the insured and, the beneficiary. It contains a statement of the name and residence of John W. Dimick, the amount and kind of insurance applied for, the date and place of his birth, his present occupation, &c. The information is in the form of written replies to printed questions. Among the questions is this: “E. State amount of insurance you now carry on your life, with name of company or association by whom granted, and the year of issue. (Enumerate each.)” To this the answer was “None.” Then follow two questions, bracketed together, and lettered “F.” The first is: “If insured in this company, in ordinary, industrial or intermediate, give jjoliey numbers.” To this there was no reply. The second question is: “Is there any other insurance in force on your life ?” to which the answer-is “None.” At the foot of this part of the application is the following declaration, above the signatures of the beneficiary and insured: “It is hereby declared, agreed and warranted by the undersigned that the answers
Part B is entitled “Statement made to the medical examiner by John W. Dimick in connection with application on reverse side of this sheet. To be fully completed by. the examiner before the applicant affixes his signature. The medical examiner will impress upon the applicant the importance of full and truthful answers to every interrogatory.” Then follow numerous questions that are intended to develop the history of the applicant in all matters pertaining to his health —he is asked specifically whether he has ever had certain enumerated diseases; whether he is ruptured; to give full particulars of any illness he may have had since childhood; to state when he was last confined to the house by illness, &e. One of the questions is this: “Have you ever been an inmate of an asylum or hospital? If so, when and for what?” and the answer is “No.” At the foot is printed the following: “I hereby declare that the application to the Metropolitan Life Insurance Company for an insurance on my life was signed by me, and that I renew and confirm my agreements
Part C is entitled as follows: “Medical examination and report (no part of the declaration of the applicant.)”
At the trial there was introduced in evidence a paid-up policy for $219, upon the life of John W. Dimick, issued by the Prudential Insurance Company on February 22d, 1897, which was in force at the time the present .application was made. That it was in force at J ohn W. Dimick’s death was admitted by the plaintiff in the written proofs of death signed by her and submitted to the defendant company in compliance with the condition endorsed upon the policy in suit.
It was also in evidence that, in the year 1893, John W. Dimick was, for two weeks, an inmate of a hospital at Englewood, in which town he resided, undergoing treatment for injuries received in a runaway accident, and that he was conscious during the whole of the time that he spent in the hospital.
Notwithstanding this evidence, the learned trial justice (in view of certain rebuttal testimony introduced by the plaintiff, which will be mentioned below) directed a verdict for the plaintiff, on the ground that no breach of warranty was shown.
IVe are inclined to agree with the contention made in behalf of the plaintiff (now defendant in error) that, the negative reply to the question, “State amount of insurance you now, carry on your life,” &c., is not applicable to the paid-up-policy in the Prudential Insurance 'Company. If the question had stood alone, it would have permitted, and perhaps required, the word “carry” to be construed in its colloquial sense, as equivalent to “possess” or “hold”—a meaning probably derived, however, from the custom of holding property that has been ])aid for with borrowed money (Cent. Diet., verb trans. “Carry,” pi. 14), and so hardly applicable to a paid-up policy that has ceased to be a burden to the insured. But the question did not stand alone; it was immediately followed by the two questions printed under the letter “F,” viz.: “If insured
With respect to the answer of the applicant that there was no other insurance in force on his life, counsel for the plaintiff first contends that the paid-up policy is not within the meaning of “insurance,” because it constitutes simply an unconditional agreement to pay a certain sum of money, upon the death of John W. Dirnick, to his executors, administrators or assigns,- irrespective of the question of insurable interest or any.question of indemnity against loss. This point, we think, is quite untenable. The paid-up policy was in the form ordinarily known as an insurance policy; John W. Dirnick is therein designated as the insured, and is frequently referred to under that designation. Moreover, the policy reserves to the company the right to “pay the sum of money insured hereby to any relative by blood,-or connection by marriage of the insured, or to any other person appearing to said company to be equitably entitled to the same by reason of having incurred expense in any way on behalf of the insured for his or her burial, _ or for any other purpose.”
The next contention of the plaintiff is this: That while, in the original application, a negative reply is given to the second inquiry bracketed under the letter “F,” and no reply is given to the first inquiry, yet there is attached to the policy itself what purports to be a copy of the application, and in the copy the negative reply is appended to the .first question, and the second question appears as if unanswered. It is insisted that, inasmuch as this copy of the application was furnished to the insured by the company, and represented hj1- it to be a true copy, it is, for all purposes of the policy, to be treated as the application referred to in the contract, so that the question of breach of warranty must be determined by
The final contention of the plaintiff upon this branch of the case is rested upon the uncontradictéd testimony of one Freedman to the effect that, at the time the policy was written, he was soliciting insurance for the defendant company; that he negotiated the policy in question; that he made out the application; that, at that time, he knew there was a paid-up policy in the Prudential company upon John W. Dirnick’s life, but did not consider a paid-up policy as being a policy; that,'before Dirnick signed the application now in question, Mrs. Dirnick told Freedman about the Prudential policy; and
With respect to the false answer contained in part B, in answer to the question whether the applicant had ever been an inmate of an asylum or hospital, the first contention of the plaintiff is that the answers contained in part B are not warranties, because they are not made such by the contract of insurance. This contention is disposed of by an examination of the contract itself. The policy makes the answers and statements contained in the application a part of the contract, and expressly treats them as warranties. Part A of the application declares that the answers and statements in part A contained, and also those made to the medical examiner, together with this declaration, shall be the basis and become part of the contract of insurance, and that no information or statement not contained, in this application and in the statements made to the medical examiner shall be binding upon the company. Part B contains the declaration, signed by the applicant, “That I renew and confirm my agreements therein [that is, in part A contained ] as to the answers given above to the medical examiner, and 1 hereby declare that said answers are correctly recorded.” And part C; the medical examination, contains, in its title-line, the statement that it is “no part of the declaration of the applicant.” From all this it conclusively appears that part B is a part of the application, and the answers and statements therein contained áre made warranties'by the contract.'
'The sole remaining contention of plaintiff, with respect to the breach of warranty contained in part B, is based upon the testimony of the medical examiner, to the effect that he examined the applicant at the request of the company; that he had no personal knowledge that Dimick had been in the hospital; that he had no recollection of having asked him whether he had been in the hospital, arid that his impression was that ho.failed to ask Dimick that question, and as he (the examiner) had no knowledge that Dimick had ever been in a hospital, he therefore wrote a negative reply to the question.
But this distinction will not avail the present plaintiff. The inquiries under consideration related to matters that, within the contemplation of the contract, were, or ought to have been, within the personal knowledge of the applicant. Both related to definite matters of fact. By the undisputed evidence, the recorded answers were in both instances untrue, to the knowledge of the applicant.
The contentions' of the plaintiff are therefore reduced to this: That the consequences of these manifest breaches of warranty are to be evaded by showing that the untrue answers were inserted by agents of the company through error of judgment, negligence or stupidity. And the facts were attempted to be. proved, not by any writing, authentic or otherwise, but by the testimony of witnesses as to what transpired verbally before the contract was reduced to writing and signed by the parties.
As to the negative reply to the question whether the applir cant had been an inmate of a hospital, the trial justice treated the medical examiner as the agent of the company, and held that he had waived that question. But he did not waive it; he wrote in an answer that was precisely contrary to the fact. And so the false answer in the medical examination must stand upon the same basis with that contained in part A, unless a distinction can be found between the functions of the medical examiner and the functions of the insurance solicitor, with respect to the preparation of the application:
It may simplify the discussion of the question of law thus presented to assume at the outset (without conceding the proposition) that if the insurance solicitor and the medical examiner were in truth in the employ of the company and' acting in its interest in all matters relating to the negotiation of the contract, including the preparation of the application, the express declaration of the applicant that for certain purposes they should be deemed his agents and not the agents of the company is an entire nullity, and that notwithstand ing this declaration they remained for all purposes the agents of the company, and not of the applicant. Even, so, the com
If persons seeking insurance and insurance companies are to be left free to enter into such contracts as they please, with reference to life insurance, it is difficult to find any. ground on which we can ignore tire force of such stipulations. If a similar question were raised concerning a contract relating to any other subject-matter, not'the slightest doubt would be entertained with respect to the answer that should be given. But by reason of the extreme hardship that seems to result in certain instances from avoiding contracts of insurance for reasons such as are here presented, courts have sometimes sought to escape from the force and effect of the plain letter of the instrument by an appeal to a supposed public policy.
We are not aware of any public policy that prohibits such stipulations. Insurance companies have the right to say that they will not insure lives until they are made aware of the past history and present financial standing of the applicant
And so with respect to the inquiry whether the applicant had ever been an inmate of an asylum or hospital. It may often be the case that this fact itself has no bearing upon the expectancy of life of the applicant. In the present case it appears that Dimick’s treatment in the hospital was for the results of a not very serious accident, and that this accident had nothing to do with producing his death. But it is matter of common knowledge that while a,patient is confined in a hospital he is subjected to rigid scrutiny by physicians and nurses, and that in some cases a record is kept of his-general physical condition. Such a record might disclose important matters respecting the constitution of the patient, although not connected with the disease or injury for which he underwent treatment. It is therefore not unreasonable for insurance companies to require a full disclosure from applicants concerning any hospital treatment that they have undergone in the past, in order that a full investigation of everything relating to the expectancy of life may be conducted.
It is sufficient, however, to say that the parties to this contract have themselves treated these replies as material for the purpose of the contract. We are aware of no rule of law that prevents them from doing so. If there be any public policy to the contrary it is for the legislature and not for the courts to declare it. With respect to fire policies, our legislature has thought fit to enact (Gen. StaL, ¶. 1766, §§ 121, 122, &c.) that property in this state shall not be insured excepting under a standard form of'policy. No similar provision exists with respect to life insurance.
It may be added that while fraud or deceit, proved by word of mouth merely, may render void a written contract, and leave the parties where they stood, it will not, in a court of law, be accepted as making for the parties a different engagement from that which they have deliberately expressed in writing. Nor can a material part of an entire contract be avoided, leaving the residue of the stipulations to stand.
In this state the elementary principle now declared has been uniformly applied to contracts of fire insurance. In Franklin Fire Insurance Co. v. Martin, 11 Vroom 568, where the insurance was obtained through an agent of the company, who inspected the premises at the time of taking the proposal and knew the manner in which they were used, the trial judge left to the jury the determination of the question whether the parties themselves did not knowingly use the term “boarding-house" for the purpose of describing what was, in truth, a country tavern. This court held that such evidence was not admissible to vary the terms of the written contract, and
In Carson v. Jersey City Insurance Co., 14 Vroom 300, the Supreme Court held that a stipulation in a policy that “no agent of this company is authorized in any respect to change the terms and conditions of this policy, and they shall neither be changed nor waived except in writing, signed by the president and secretary,” did not apply to a condition that was to be performed after the loss had occurred, such as the furnishing of proofs of loss, and that a condition of this character might be waived by parol; but the decision recognized that the stipulation did apply to those conditions and provisions in the policy which relate to the formation and continuance of the contract and are essential to its binding force while it is running.
In Bennett v. St. Paul Fire and Marine Insurance Co., 26 Vroom 377, the policy declared that it should be void if the assured at the time had any other insurance upon the premises. The defendant pleaded that there was such other insurance. The plaintiff replied that, at the time the policy was made and the premium paid, the defendant knew of the existence of other insurance, and with this knowledge issued the policy sued on. Upon demurrer to the replication the Supreme Court gave judgment for the defendant.
And in Ellison v. Gray, 10 Dick. Ch. Rep. 581, the attempt was made to obviate the force of a stipulation contained in a policy requiring a renewal premium to be paid before the expiration of the term of the original insurance, on the ground of a verbal representation made by an employe of the insurer, in the presence and without the dissent 'of the general agent, to the effect “that the contract would hold just the same as though it had-been paid -for prior to the expiration of the contract.” This court held the insurers bound by the terms of the policy, upon the authority of the Dewees and Martin cases.
The Supreme Court of the United States at one time expressed a somewhat contrary view. Insurance Co. v. Wilkinson, 13 Wall. 222. But even that case does not go to the extent that would sustain the present action, for there it did not appear that any limitation of the agent’s authority was broughtjto the notice of the applicant for insurance, and the opinion expressly bases the decision on that ground. This case was cited and its reasoning overthrown by Mr. Justice Depue in the Martin case. And the later decisions in the Federal Supreme Court are in accord with the rule as established in this state. New York Life Insurance Co. v. Fletcher, 117 U. S. 519 (where the court distinguished the Wilkinson case on the ground just mentioned); Northern Assurance Co. v. Grand View Building Association, 183 Id. 308.
The almost universal enforcement in other jurisdictions of the rule that we have adhered to in this state will become apparent by reference to the numerous cases from the English reports and from state reports, which are cited and exhaustively reviewed in the learned opinion of Mr. Justice Shir as in the case last cited.
But counsel for the plaintiff insists that the contract here in suit was made in the State of New York, and was to be there performed, and that its validity and construction must therefore be determined according to the law of that state. 1 Chit. Gont. 128, &e. The trial, however, seems to have proceeded upon the theory that the law of this state should control. As to the place of making, the proofs render it at least doubtful whether the contract was made in New York, and so the direction of a verdict for the plaintiff cannot be sustained on that ground. Dimick and his wife resided at Englewood in this state, and he there followed his trade as a carpenter. The application was there made out, signed and delivered to defendant’s agent. There is no specific proof to show where the policy itself was actually delivered, outside of its own recitals. In the absence of anything to show that Dimick or his wife departed from their home to receive it,
The place of performance is likewise obscure. The contract was of the form known as an endowment policy, and in it the company agreed to pay the sum therein specified to the insured at its home office in the city of New York upon surrender of the, policy at the expiration of twenty years from its date, and did further agree, in case the insured should die prior to that date, to pay said sum to Bridget Dimick, if living, otherwise to the legal representatives of the insured, upon the receipt by the company at its home office and its approval of the proofs of death, and upon the surrender of the policy. It therefore is not clearly expressed that, in the event of the death of the insured, payment was to be made to the beneficiary at the home office. As both she and her husband lived in this state at the time the policy was written and at the time of his death, and as a debtor under ordinary circumstances is obliged to seek out the creditor for the purpose of making payment in the absence of a stipulation to the contrary, it becomes a matter of doubtful construction, upon the terms of the contract, whether it was to be performed in this state or in the State of New York in the event that has transpired. Upon this question we at present express no opinion.
But since the plaintiff has raised the question of the law of New York, and since we have reached the conclusion that a venire de novo is necessary, we think it proper to express our views upon the question.
By force of our revised act concerning evidence (Pamph. ■L. 1900, p. 370, § 26) “the reports of the judicial decisions i of other states and countries may be judicially noticed by the courts of this state as evidence of the common law of such states, and the usual printed books of such reports shall be plenary evidence of such decisions.”
We have found ourselves much embarrassed in this inquiry by reason of the great contrariety of the views that have found
The precise question is whether a false answer, in writing, to a material inquiry contained in an application for insurance is there held not to be a breach of the warranty, although the application and the policy alike makes these answers warranties; and whether this is so held in an action at law, brought not for the purpose of reforming or setting aside the agreement, but for the purpose of a recovery upon it according to its terms; the sole ground for sustaining the action, in spite of the apparent breach of warranty, being this, that the truth was known to and was ignored by an agent of the insurer, who -acted in the preparation of the application, the application itself in effect declaring that the applicant shall be responsible, and solely responsible, for the truth of the answers therein made, and for their correct recording, and that the agent of the company, if permitted by the applicant to write down the answers, has no authority to bind the company by -entering an incorrect' answer.
Eor the latest authoritative decision in New York we are referred to Sternaman v. Metropolitan Life Insurance Co.,
But, again, the Stcrnaman case was decided after the making of the contract now in suit, and the rule there enunciated may be said not to have entered into the contemplation of the present contracting parties. We have, therefore, examined the earlier New York cases, among others, the following: Chase v. Hamilton Insurance Co. (1859), 20 N. Y. 52; Rohrbach v. Germania Fire Insurance Co. (1875), 62 Id. 47; Alexander v. Germania Fire Insurance Co. (1876), 66 Id. 464; Van Schoick v. Niagara Fire Insurance Co. (1877), 68 Id. 434; Sprague v. Holland Purchase Co. (1877), 69 Id. 128; Whited v. Germania Fire Insurance Co. (1879), 76 Id. 415; Flynn v. Equitable Life Insurance Co. (1879), 78 Id. 568; Grattan v. Metropolitan Life Insurance Co. (1880), 80 Id. 281; another of the same name (1883), 92 Id. 274; Fowler v. Metropolitan Life Insurance Co. (1889), 116 Id. 389; O'Brien v. Home Benefit Society (1889), 117 Id. 310; Berry v. American Central Insurance Co. (1892), 132 Id. 49; Cross v. National Fire Insurance Co. (1892), Id. 133; Quinlan v. Providence Washington Insurance Co. (1892), 133 Id. 356; Baumgartel v. Providence Washington Insurance Co. (1893), 136 Id. 547; McNally v. Phœnix Insurance Co. (1893), 137 Id. 389; Moore v. Hanover Fire Insurance Co. (1894), 141 Id. 219; Forward v. Continental Insurance Co. (1894), 142 Id. 382; Wood v. American Fire Insurance Co. (1896), 149 Id. 382; Robbins v. Springfield Fire Insurance Co. (1896), Id. 477.
These cases show that the Court of Appeals of New York has not adhered with entire consistency to any definite rule. In most cases, however, where the insured acted with express notice of limitations upon the authority of the insurer's agent, he was not permitted to bind the insurer by the acts of the agent done outside of such limitations. None of the cases is strictly in point with the present. The one most nearly so is the Sternáman case, already distinguished.
The judgment of the Supreme' Court should be reversed, and a venire de novo awarded.