80 Ky. 223 | Ky. Ct. App. | 1882
delivered the opinion of the court.
This action was instituted in the Jefferson court of common pleas by Rudwig and Banchart (the appellees) against the Germania Life Insurance Company of New York on a policy of life insurance, by which the life of Bernard H. Gotthelf was insured for their benefit. At the time the-policy was issued, Gotthelf was a resident of the city of Louisville. He removed from that city to Vicksburg, Mississippi, and died near the latter city, of yellow fever, on the 7th of September, in the year 1878.
The petition contains the usual averments essential to a cause of action on such a policy. In the second paragraph of the answer, or that portion of it necessary to be considered, the company alleges that the policy was issued on the faith of a written declaration by the plaintiffs and Gotthelf, dated in April, 1869, and made part of the contract of insurance, by the terms of which it was provided that it should become void or inoperative if the declaration made, or any part of it, should be fomid, in any respect, untrue.
It is further alleged that the following statements, found in the declaration made, and upon which the policy is based* were false:
Second. That Gotthelf was born February 5, 1817, when,, in fact, he was bora the 5 th of February, 1816.
Third. That Gotthelf’s father died of old age (93 years-old), when he died of nervous apoplexy at the age of 82 years.
Fourth. That Gotthelf’s mother died of old age (72 years-old), when she died at the age of 65 years of paralysis of the lungs.
It is alleged that all of these statements were untrue, and the defendants did not discover they were false until after the death of the assured.
A reply was filed to this answer, and also a rejoinder by the defendant. It is insisted that the denials contained in the reply of the facts alleged by way of defense in the answer are not sufficiently specific, and therefore the statements of the answer must be regarded as true. The reply denies that the declaration filed with the answer contains any untrue statement, and further alleges that all of* the statements therein contained are fair and true answers to the questions asked, and then proceeds to deny specially each averment of the answer with reference to the particular statement said to be false. We think the reply made an issue, and placed the burden on the defendant of sustaining his answer by proof.
The third paragraph- of the answer avers that the policy provided that if Gotthelf should visit, between the first day of July and November, without the consent of the defendant, those parts of the United States which lie south of
The appellees, for reply to this paragraph of the answer, ■admit that the assured Gotthelf removed to Mississippi in -the year 1870; that this was done with the knowledge and consent of the company, and in consideration of said removal, the defendant required the appellee to pay, and he ■did pay, an extra premium of thirty dollars for two years, and until he Was notified by the defendant that no further extra premium would ■ be required, and the regzdar premiums were accepted afterwards by the defendant in full of all claims upon said policy.
To this the appellant rejoins, and admits that on the 19th ■of August, 1870, for an extra premium of thirty dollars, it gave the plaintiff a written permit that Gotthelf might reside or travel in Mississippi until, but not after, July ist, 1871; and that on the 17th of August, 1871, for another extra premium of thirty dollars, it gave the plaintiff another written permit that Gotthelf might reside or travel in Mississippi until, but not after, July ist, 1872; denies that it ever consented to any visit or change of residence after the limitation of the second permit, or that it accepted any premiums after July ist, 1872, with any knowledge- that Gotthelf resided, or was or had been, at any time since 1st of July,' 1872, in the prohibited territory.
There was a surrejoinder filed to this rejoinder, in which .the appellees deny that the defendant never accepted any pre
While the denial that the company had no knowledge raises >no issue, an averment that the company knew and consented ito the removal is sufficient, and this averment is found in the creply traversed by the' rejoinder. The surrejoinder may be ¡regarded as out of the record, and the issue is formed, the ■appellees admitting the conditional consent alleged to have ..been given by the company in the years 1871 and 1872.
In determining the questions involved in this case, we will ¡.proceed to consider, first, the .effect of the declaration by the assured of the existence of certain facts that, by the •agreement of the parties, constitutes the basis of the con-tract evidenced by the policy.
There is proof conducing to show that Gotthelf was not ■insured in the .¿Etna Life Insurance Company at the date -of the policy, the insurance in that company having expired -some time previous to the date of the insurance with the -.appellant. It is also questionable whether the insured was born on the 5th of February,-1816, or the 5th of February,
There is no denial made by the appellees as to the character of the statements made in the application for< the-, policy, and the principal question on this branch of the case-made by counsel for the appellant is, that the court erred in failing to instruct the jury, or to adjudge as a matter of law, that the statements contained in the application were made material by the contract of insurance, and if not substantially true, although immaterial to the risk, the-policy is avoided; in other words, if any of the statements, made, however immaterial to the risk, were untrue, whether made with a fraudulent purpose, or from ignorance as to-the truth or falsity of the statement, the appellees cannot recover. Several cases have been cited by counsel having a close analogy to the case before us, and a careful_ consideration of these, as well as other cases to which our attention-has been called, go far in support of the position assumed by counsel. (Miles v. Connecticut Mutual Life Insurance Company, 3 Gray; Campbell v. New England Life Insurance
These cases all proceed upon the idea that thé' parties "themselves have determined that all the minute questions .and answers contained in such declarations shall become a -part of the contact, and the only inquiry to be made by a court or jury is, whether the statements-made are true’ or -.false. As to the statements made in regard to the age of •the insured, and the respective ages of his father and mother, .and the cause of their death, the jury has, by a special .finding, said they were true, and this obviates the necessity • of passing upon the errors assigned as to ’ these findings, unless, as is insisted by counsel, the special findings are not sustained by the evidence. The deposition of one Eldod is taken in the Kingdom of Bavaria, who states that’ he is the keeper of the register of births and deaths of a Jewish congregation 'in Kleinerdlinger, kept and preserved by law, and from the register it appears that the father of •thé insured died at the age of 82, and his mother at the age of 65, one dying of nervous apoplexy, and the other -with paralysis of the lungs, and further,' that Gotthelf, the .assured, was born in February, 1816, instead of February, :i8i9.
The son of Gotthelf states that it was the custom of the ■family to always celebrate the day of the birth of each member, and from this fact, and the statements then made 'by the father, he was sixty years of age at his death, and in this he is corroborated by another witness. The "Bavarian register, without any evidence as to who made the -record in regard to Gotthelf’s family, or how the party mak-ing it derived the information it purports to give, either as do the ages of the different members of the family or the
It is urged, however, that the assured Gotthelf was not: insured at the time of his application in the ¿Etna Insurance.Company in the sum of $5,000; and the jury having returned a special finding to that effect, it avoided the policy.. It seems that Gotthelf had been insured in the ¿Etna Insurance Company for $10,000, and that this insurance ceased, by reason of his failing to1 pay the premium in January, 1868. It is shown by an agent of an insurance company that such a statement, if untrue, is not material to the risk, and.it is not contended that it would have controlled, the-action of this company in making the- contract if the fact: had been known.
We can well see how a concealment fraudulently made,, or a knowledge of like contracts with other companies innocently withheld, should avoid the- policy. The greater the amount of insurance, either for the benefit of the family of the assured or his creditors, the less would be the anxiety of the assured with reference to their protection; and witht this feeling of security on his part, it might, in some instances, at least, cause the assured to be less careful of his own health,, or more liable to indulge in habits calculated to shorten life;; but here there was nothing withheld from the company calculated to increase the risk. If, trusting in. the fact that the-¿Etna Insurance Company was vigilant through' its medical’ examiners in selecting the subject for insurance, it had the-:
It is very properly said that the contract of insurance is. entered into by the company upon the faith of the representations made; but it is further insisted that, if made part of the contract, the representations then become express warranties. If incidental to the contract, but upon the faith of which it is entered into, the representations, if false or untrue,, must be material in order to avoid the policy; but when made a part of the contract, the representation made, whether material to the risk or not, if untrue, avoids the contract. So, in this case, if Gotthelf had made the statement that his-, father died at the age of eighty-two years, when, in fact, he died at the age of, ninety-nine, this false or untrue statement would have rendered the contract null and void..
There is no doubt that an insurance company relies upon-the truth of the representations made in' either case, and' equally certain that, if untrue and material to the risk, no-inquiry will be directed for the purpose of determining whether the statement was fraudulently or innocently made. The-injury to the insurer is the same, but when no injury can-possibly result to the company, where is the breach and what'is the penalty? It would certainly be no'breach of warranty in a chattel if the' quality was better than that warranted, unless 'the inferior article alone would conform-to the wants of the purchaser; and if a breach, the damages;
While the contract of insurance may be peculiar to itself, "it must be liberally construed in favor of the insured, so as not to defeat, without a plain necessity, his claim to indemnity, which, in making the insurance, it was his object to secure. There is nothing about an agreement for insurance intrinsically more sacred or inviolable than in an agreement .about any other subject-matter.” (May on Insurance, pages 181 and 182.)
Such contracts are to be interpreted like other agreements, and must be governed by the same rules, good faith (says the same author) being especially required, as one of the parties is necessarily less acquainted, with the details of the subject of the contract than the other. In the declaration made in the present case, it is said ‘ ‘ that all the answers and declarations made are true, and that we have not omitted to communicate, nor concealed any material circumstance, and we agree that this declaration shall be the basis of the contract for insurance of the said life.” Following the ordinary rule in regard to the interpretation of contracts, and giving to this declaration its full legal effect when inserted in the contract, and it is evident the parties were looking to facts that were material to the risk, and not to the minute statements as to the precise age of the ancestors of the assured, their nationality, or any other statement not calculated to ■affect the risk in the slightest "degree, and that could not
This court, in the case of Galbreath’s adm’r v. The Arlington Mutual Life Ins. Co., reported in 12 Bush, in discussing a similar question, said: “ Whether the representations alleged to have been untrue are warranties, is not necessary in this case to decide. The first instruction quoted made the liability of the appellee to depend upon the truth of every statement made by the assured which was enumerated in that instruction, whether the risk was thereby increased or not, and in this respect was erroneous. The language is not to be taken literally, but is to be construed with reference to the subject-matter, and the business to which it relates.
In the case of the Continental Ins. Co. v. Ware, decided at the present term, the assured, in her application, which was made the basis of, and formed a part of, the contract, undertook and warranted that the building was of the value of $3,000, when, in fact, as appeared from the proof, it was worth a less sum. This constituted one of the grounds of defense by the' company, and this court held that such a representation, although made part of the contract, ought not, when made in good faith, to amount to a warranty, or • affect the rights of the parties in any way; and further, if a difference in the opinion 'of the insured with others as to the value of the property insured will defeat the recovery, it is creating a test difficult for a court or jury to determine, and must render valueless nearly every policy similar in its character in the hands of those who have insured. Before
This act, in our opinion, was but declaratory of the law as it then existed in this state, and we find no decision to the contrary, unless it is the case of the Farmers and Drovers’ Insurance Company v. Curry, reported in 13th Bush. In. that case the building burned was not occupied as stated in. the application and policy. It was also encumbered by a. vendor’s lien, and had become vacant without notice to the-company. These constituted the grounds of defense..
This court in that case said: “The evidence conduced to-establish the facts upon which each of the propositions rests, and such being the case, the judgment below was reversed.”' That the statements were material to the risk could not have been successfully questioned; but the court proceeds in that, case to discuss the effect of the act of 1874, now a part of the General Statutes, and says that statute would control when the policy is silent as to the effect of the statements made; but when the parties tmde.rtake in the policy to declare the meaning and effect of its stipulations, they have the right' to do so;, and cannot be controlled by the statute. The court, was evi- - dently considering the importance of the statements made-in the - policy to the party giving the indemnity at. the time; this utterance was made.
The supreme court held, in the case of the National Bank against Insurance Company, on a policy, like this, that a representation as to value was not to be construed-, as a warranty. (5 Otto, 673.)
Forfeitures are regarded by courts with but little favor,, and while the non-payment of premiums or a representation* of facts fraudulently or innocently made, if untrue and material to the risk, or such as would induce the insurer to enter into the contract, must prove fatal to the policy when minute and trivial questions are propounded and ánswered having no bearing or influence on the minds of -those-about entering into the contract, and not material to the-risk, the parties cannot be affected by them. An honest belief in the truth of the statement made, when not material to the risk, should not avoid a policy if the statement should prove to be untrue, and to adjudge that it works a forféiture is contrary to the intent and meaning of the parties, and subversive of that rule of good faith and fair dealing-that should enter into and form a part of every insurance-contract.
After that time, viz: July, 1872, no permit was asked or consent obtained from the company, and Gotthelf still continued to reside in'or near Vicksburg until his death in September, 1878. The regular premium was paid each year from the date of the insurance until his death. It is apparent from the proof that the appellees knew, and if not, they must be presumed to have known, the terms of the policy, and that by Gotthelf’s removal to Vicksburg without the consent of the appellant, the policy became, void. It appears from the testimony that the appellees, after obtaining the written permits from the company, proposed to the agent of the company at Louisville to continue the payment of the extra premiums, and were informed by the .agent that he would notify the company, and -sec that the policy was not forfeited. These suggestions were made time and again to the agent, the latter continuing to inform them that it was not necessary to make any additional payments, and with this understanding and the continued offer .by the appellees to pay the extra premium, the agent con
• In this case the agent received the premiums with the understanding and agreement between himself and the assured tlrat this policy was to be binding on the company. They paid it upon no other condition, and Knoefel being the agent of the company to receive premiums, it was the duty of this general agent to have informed the company of what
On the policy in that case was.this indorsement: “ If the party upon whose life the insurance is granted shall go ’beyond the limits of Europe without the license of the 'directors, this policy shall become void, the insurance •effected shall cease, and. the money paid to the society become forfeited to its use.”
■ In the case of Insurance Company v. Wolff, reported in 5 Otto, the -proof conduced to show that the agent was not
Judgment affirmed.