116 Ga. 799 | Ga. | 1902
Suit was brought against the Northwestern Mutual Life Insurance Company on a policy of insurance issued on the life of Joseph R. Morton. The defendant in its answer set up certain alleged false and fraudulent statements made by the insured in his application for insurance, by which the company was induced to issue the policy. On the trial the case was submitted to the jury on the sole issue of fraud as affecting the policy under its terms. It appeared that Morton in his application stated that he had not since childhood had any mental derangement, nervous disease, dizziness, unconsciousness, fits, epilepsy, convulsions of any kind, or any disease of the heart, and had no reason to believe that he was not in good health at the time the application was made. By the terms of this application, which was signed by Morton, all the statements made therein were warranted to be true and were offered to the company as a consideration for the contract of insurance. The evidence showed, without question, that most of the statements just set out were false; that Morton had suffered from and was subject to frequent fits; that the physician he consulted ascribed these fits to the result of excessive smoking, telling Morton that he had “ tobacco heart;” that, under the treatment of this and several other physicians, Morton improved, and was apparently rid of the trouble at the time he applied to the defendant for insurance; but that subsequently the trouble returned, and Morton eventually died in an asylum for the insane. It was also shown that the company had relied largely upon the statements in the application in determining whether to issue the policy, and had acted upon the false statements to its injury. The plaintiffs relied upon the “incontestable clause” in the policy, which read as follows: “If the
1, 2. The first question with which we are concerned is the meaning of the so-called incontestable clause of the policy. There was no contention that the age of the insured had been understated, or that his death had not occurred more than three years after the policy was issued. This being true, we think the effect of this clause was to limit the company, in denying liability on the ground of misstatement in the application, to such statements as were made with actual fraud. Where the fraud was constructive only, this clause barred the company’s right to set it up. That the exception, “in case of actual fraud,” applies to fraud in making statements in the application, seems clear when we consider that it is with 'these statements that the entire clause deals. Indeed, this is practically conceded in the briefs of counsel, and the argument is devoted to the question of proof of actual fraud. While a clause to the effect that an insurance policy shall from its date be absolutely incontestable is held to be an effort to condone fraud.and against public policy, such a clause as is contained in the present policy is-held good. A somewhat similar clause, making a policy incontestable after the lapse of three years, was held to be valid, as providing for a period of limitations or repose, in Massachusetts B. L. Asso. v. Robinson, 104 Ga. 256, 42 L. R. A. 261. In the absence of any such' clause, any misstatement in the application, whereby the nature or character or extent of the risk is changed, will, if the policy makes that the basis of the contract of assurance, avoid the policy, whether such misstatement is or is not fraudulently made. So. Life Ins. Co. v. Wilkinson, 53 Ga. 535. The clause in the policy dealt with in the Robinson case precluded the
Under the facts of the case, these instructions were erroneous. We are also of opinion that the evidence demanded a verdict for the defendant, except for a small sum which it tendered as a repayment of the premiums received by it on the policy. The evidence showed without contradiction that some of the most material statements in the application were false, were at the time known by the insured to be false, were not known to be false by the company or its agents, who were without notice of their falsity, were made in order to procure the insurance, and were acted upon by the company and relied upon by it in issuing the policy. The misrepresentations were also shown to relate to the physical and mental condition of the applicant for insurance, and to be, therefore, very material to the company’s decision as to whether the policy applied for should be issued. Indeed, they were made warranties and part of the consideration for the contract of insurance. The
Foster v. Charles, 6 Bing. 396, 19 E. C. L. 183, was a suit for deceit, wherein it was necessary to prove actual fraud to entitle the plaintiff to a recovery. It was there held that where one is injured by false representations knowingly made by another; the latter is liable in damages as for actual fraud, without regard to the real motive which actuated him. In that case Tindal, C. J., said: “ The law will infer an improper motive if what the defendant says is false within his own knowledge and is the occasion of damage to the plaintiff.” Upon the retrial of the same case the jury found for the plaintiff, but added: “We consider there was no actual fraud on the part of the defendant, and that he had no fraudulent intention, although what'he has done constituted a fraud in the legal acceptation of the term.” The verdict for the plaintiff was upheld, Tindal, C. J., saying: “ It is fraud in law if a party makes representations which he knows to be false and injury ensues, although the motive from which the representations proceeded may not have been bad : the person who makes such representations is responsible for the consequences.” 7 Bing. 105, 20 E. C. L. 55. In the same case Gasalee, J., said: “What the jury meant by actual fraud was a sordid regard to self-interest; but the legal fraud, which is sufficient to sustain the action, was complete when the intention to mislead was followed by actual injury.” And Bosanquet, J., said: “ If a person tells a falsehood the natural and obvious consequence of which, if acted on, is injury to another, that is fraud in law. Coupling that with what the Chief Justice addressed to the jury, their verdict only means that the defendant did not propose to benefit himself, perhaps intended to benefit another; but that what he said, intending to benefit another, was false within his own knowledge, injurious to the party who received the communication, and, consequently, a fraud in the legal acceptation of the term.” In Polhill v. Walter, 3 B. & A. 114, 23 E. C. L. 38, the defendant accepted a bill as by procuration of the drawee, when in fact he had no such authority. It was there held that he was chargeable in an action for deceit; if he knew of his want of
Of course intention is generally a question for the determination of the jury, and the conduct of the parties as showing a fraudulent intent is generally for their consideration. But in the present case the facts were such that they could properly have made but one finding. The applicant for insurance made in his application a false statement with reference to a material matter of fact; this statement was false within his knowledge; it was made with a view to procuring the' insurance, was made deliberately and with an agreement that it should be regarded as a warranty and as a part of the consideration of the contract of insurance; the company had
3. The policy in this case was in part assigned, with the assent of the company, as collateral security for a debt, and it was argued that the company could not set up as against the assignee fraud in the application. This seems to be the rule in fire-insurance, where the original policy is not void, the consent to the assignment operating as a reissuance of the policy. 3 Joyce, Ins. § 2308. With regard to policies of life-insurance this is not the rule, and the assignee takes such a policy subject to such defenses (Ibid. § 2326) where it does not appear that the company, at the time of the assent to the assignment, had notice of the existence of such defenses.
Judgment reversed.