Fidelity Mutual Life Insurance v. Miazza, 46 So. 817

Fidelity Mutual Life Insurance v. Miazza

46 So. 817 | Miss. | 1908

Mayes, L,

delivered the opinion of the court.

On the 12th day of January, 1906, Peter S. Miazza applied to the Bidelity Mutual Life Insurance Company for a policy of insurance on his life in the sum of $1,000. As a condition preceding the acceptance of any risk, the insurance company has a foim of application which it is required that all persons desiring insurance .shall sign, and in this application there aro contained many questions addressed to the applicant for insurance; the object being to obtain general information as to the physical condition of the person seeking insurance, so as to en*35able tbe insurance company to determine whether or not it will assume the risk. The application is in form of a certificate and is prefaced as follows, viz.: “I hereby apply to the Fidelity Mutual Life Insurance Company, of Philadelphia, Pa., for a policy of insurance, to be issued in pursuance of this application, and certify as follows.” Succeeding this preface follow the matters certified to, which are: (1) The name of applicant and date of birth; (2) that the applicant is in good health and free from any and all diseases, etc.; (3) the occupation of applicant. It is not contended that any incorrect answers were made as to the foregoing matters, but the contention arises over the answers to the fourth, fifth, sixth, and tenth clauses of the application, and we here set them out in full, together with the answers: “(4) That I have never had or been afflicted with any sickness, disease, ailment, injury, or complaint, except as here stated. (Give full particulars as to the nature thereof, date and duration, whether trivial or otherwise. If rheumatism, state whether muscular, sciatic, or inflammatory.) Ans. I had yellow fever in 1878. Oct., 1903, was overworked. Was doing both night and day work, and had insomnia and nervousness for about two weeks. Full recovery. No symptoms since. (5) The last physician I consulted or who prescribed for me was Dr. J. 33. Stanley, of Memphis, about Oct., 1903, for the sickness here stated, insomnia and nervousness. (6) That I have not consulted or been prescribed for by any physician or medical man during the past ten years. * * * (10) That I do not use, and have never used, narcotics, and have never used daily exceeding two ounces of spirits, or two drinks of wines or malt liquors, and have always been temperate and sober, except as stated below. Never drank habitually, nor to any excess.” At the conclusion of the application, and preceding the signature of the applicant, is to be found the following agreement: “I hereby agree and bind myself as follows : That the truthfulness of each statement above, made or contained, by whomsoever written, is material to the risk, and is the sole basis of the contract with the said company; that I *36hereby warrant each and every statement herein made or contained to be full, complete, and true,” etc. The application is attached to and made a part of the policy, and by the policy of insurance it is made one of the general precedent conditions that “the application, copy of which is given on third page, forms the sole basis of this contract,” etc. After making the application, the medical examiner, acting for the insurance company, made an examination of Mr. Miazza, passing him, and the company duly issued its policy to him for the sum of $1,000, taking effect on the 19th day of January, 1906, and being payable to his wife, Emma S. Miazza. On the 9th day of March, 190.6, a little less than two months from the issuance of the policy, Peter S. Miazza died in the insane hospital in Jackson, Miss., having been placed there by his relatives because of a deranged mind. After the death of Mr. Miazza demand was made on the insurance company for payment of the policy. Payment was refused, whereupon this suit was brought.

In deciding this case we do not deem it necessary to follow the course of the pleadingsi, deeming it sufficient to say that the demurrer filed by plaintiff to the rejoinder of defendant should have been overruled, and the demurrer filed by defendant to the replication of plaintiff, whereby it was sought to have this insurance contract construed as a Pennsylvania contract, should have been sustained, and not overruled. By section 14, c. 59, p. 66, of the Laws of 1902, in force at the time of the execution of this contract, it is provided that “all contracts of insurance on property, lives or interests in this state shall be deemed to be made therein.” This is the law of this state, and no contract of the parties can change it. It follows that this contract is to-be construed under the law of this state. Grevenig v. Washington Life Ins. Co., 104 Am. St. Rep., notes from 488 to 492; Horton v. Home Ins. Co., 122 N. C., 498, 29 S. E., 944, 65 Am. St. Rep., 717.

The defense offered to be made by the insurance company was that there was a misrepresentation made in the application, material to the risk, and constituting a condition precedent to *37the making of a valid contract of insurance; that in the application for insurance Peter S. Miazza stated that he had never been afflicted with any sickness, disease, ailment, injury, or complaint, except that he had yellow fever in 1878, and in October, 1903, was overworked doing both day and night work, and had insomnia and nervousness for about two weeks, and that there had been a full recovery, and no symptoms thereof since, when, as a matter of fact, about October, 1903, the applicant was affected with dementia, which caused his confinement for about two weeks, and was of such character that it would, if it had been disclosed to the insurance company, have prevented him from' obtaining insurance. It was farther alleged in the plea that Peter S. Miazza stated in the application that the last physician who prescribed for him was Dr. J. B. Stanley of Memphis about October, 1903, for the sickness indicated in the fourth answer — that is, for insomnia and nervousness — and that he had not consulted or been prescribed for by any other physician or medical man for the past ten years, when in truth the Last physician consulted or prescribing for the applicant was not Dr. J. B. Stanley, and it was not true that such consultation and prescription wias merely for insomnia or nervousness. The pleas of defendant further set up the fact that about the 12th of October, 1903, the applicant consulted and was prescribed for by Drs. Stanley, Turner, and Patty of Memphis, which fact was not known to the defendant, and if it had been, the policy of insurance would not have been issued.

In support of the issue thus made by the plea the defendant took the depositions of Drs. Stanley, Turner, and Patty. The testimony of Dr. Patty is that Miazza was brought to his sanatorium on the 12th day of October, 1903. The purpose for which he was brought was for treatment for acute dementia, coupled with alcoholism, and he remained at the sanatorium for about three weeks. When he was brought to the hospital he was insane to such an extent that he thought it was unsafe to allow him to be at liberty. He was very nervous and much emaciated; his system being in a very toxic condition. He says *38he considered the condition of Mr. Miazza to be partly due to-alcoholism and partly to overtaxation and mental worry; that the condition in which he found him might result fatally, and seriously impaired his chances of general good health and longevity. Whether there could have been a permanent cure or not,, he thought, depended upon the manner of treatment and the circumstances under which Miazza was placed. Dr. Stanley' testified that he also attended the case, when Miazza was carried to the sanatorium, in conjunction with Dr. Patty. He stated that a week’s time after reaching the -sanatorium Miazza’s mind was improved and he was in a fairly normal condition. Dr. Stanley also testifies that Miazza was suffering with acute mania, and had an idea that detectives were after him, and was irritable and in a very nervous condition. Dr. Turner testified that he was called in consultation with Dr. Stanley about October 11, 1903; that he made a physical examination of Miazza at the Clarendon Hotel, and found him totally deranged ; his physical condition was that' of total dementia, and he showed the effects of insomnia and deficient nourishment. Turner advised the incarceration of Mr. Miazza in some safe place, where he could be prevented from harming himself and others; that it had been his experience in some cases of persons affected in a manner similar to Mr. Miazza that they recovered entirely, and again it resulted fatally. This testimony was offered by the appellants in the court below, and on a motion to suppress the depositions the court sustained the motion and gave peremptory instructions for the plaintiff. This was error. The question should have gone to the jury to determine whether or not there had been any misrepresentation by Miazza in his application for insurance of a matter material to the risk, and this testimony was relevant and competent on that point.

By the terms of the contract it is expressly agreed “that the truthfulness of each statement above made or contained, by whomsoever written, is material to- the risk, and is the sole basis of the contract with said company,” etc.; and the contract further provides that, “if any concealment or- untrue statement *39or answer be made or contained herein, then the said policy and this contract shall be ipso facto null and void,” etc. We are not prepared to hold that a stipulation in the contract of insurance of the character .above quoted will have the effect of making every statement made or contained in an application of insurance material to the risk, thus avoiding the contract, whether such statement be in fact material. This would seem to have been held in the case of Co-operative Life Association v. Leflore, 53 Miss., 1; but an examination of the facts shows that in that case the facts misstated were material. Courts are not given to avoiding contracts for misrepresentations of an immaterial nature, and to adopt this rule in its application to contracts of insurance merely because it is stated in the contract that any misstatement should be deemed material, can subserve no purpose of right.

At this time the matter of insurance has become so important a factor in human affairs that it cannot now be said that such contracts are matters of purely private concern. The public are vitally interested in the kind and character of contract which an insuiance company may lawfully make, to such an extent that it may be said that such contracts are of a quasi public character, and to a greater or less extent affected with a public interest. In nearly every state in the union this is recognized to such an extent that the state governments have created a special insurance department; the sole and important duty of the department being to supervise insurance and insurance contracts. In states where the courts have held what would seem to be held by the case of Co-operative Association v. Leflore, 53 Miss., 1, the legislatures of the 'states have repudiated the holding by enacting laws prohibiting insurance companies from relying on the misstatements made in an application as a defense, unless these misstatements relate to some matter material to the risk. If tlie misstatement is material, it can make no difference as to whether or not it was made in good faith. In the case of Co-operative Association v. Leflore, 53 Miss., 18, the court says: “The application and the policy, constituting *40but parts of an entire contract, are to be read as one instrument, and such construction is to ,bc adopted as renders them harmonious. This is accomplished by giving the word ‘fraud’ its legal meaning, by which will be embraced misstatements by which the company has been deceived, though not fraudulently intended by the applicant. To limit it to designed and intentional bad faith is to do violence both to the letter and spirit of the other portions of the instrument.” In this case it can hardly be doubted that, if there had been a full disclosure on the part of Miazza as to the character of his illness in 1903, it might reasonably have influenced the company not to make the contract of insurance.

The principle here applied to this contract is but a principle of general application. It is the universal rule that any contract induced by misrepresentation or concealment of material facts may be avoided by the party injuriously affected thereby, if the applicant for insurance undertakes to make a positive statement of a fact, if it be material to the risk, such fact must be true. It is not sufficient that he believes it true, but it must be so in fact, or the policy will be avoided, provided,' always, that the misstatement b.e about a material matter. If the applicant is not informed as to any question asked in the application, he should so state, and there can then be no- misrepresentation.

For reasons indicated in this opinion, the judgment is reversed and cause remanded.