96 Vt. 67 | Vt. | 1922
This action is brought on a policy insuring the life of Orvie M. Jones, deceased. Though entitled in the name of the administrator of Jones’ estate, the cause is prosecuted by the beneficiary, who is the -widow of the deceased. The policy in suit was issued at the same time and on the same application as that involved in Spaulding, Admr. et al. v. Mutual Life Insurance Co., 94 Vt. 42, 109 Atl. 22. where a more detailed statement of the pleadings and claims of the parties will be found. The original answer of the defendant was the same in both cases. After the final disposition of the companion case the defendant pleaded the judgment therein in bar of this action. The plaintiff replied denying that the cause of action in both suits was the same and that both policies were issued upon the same application, and averring that the answers in the application which the defendant claimed to be false were made under the instruction and by the advice of the defendant’s medical examiner, relied upon by the insured, and were understood to be correct when made. The defendant demurred to this replication, the court sustained the demurrer and rendered judgment for the plaintiff for the sum tendered by the defendant as premiums paid on the policy. The case came to this Court on plaintiff’s exceptions, where the judgment was reversed and the cause remanded. 94 Vt. 445, 111 Atl. 522. It was then held that the action being on a different policy, though issued on the same application, was not for the same cause of action, and so the former judgment
The principal questions relate to the effect to be given the adjudication in the former case. The trial court regarded it as conclusive of the controlling questions in the case and ruled accordingly. The rule applicable to such a situation is well settled in our cases and was stated when the case was here on the pleadings. When the second action between the same parties or some of them is upon a different .cause of action the former adjudication operates as a bar as to those matters in issue, or points controverted, upon the determination of which the findings or verdict was rendered and no further. Otherwise stated, in such case it is only upon matters actually litigated and determined that the adjudication is conclusive. The decisions are of one accord on the general proposition, but there is not the' same agreement respecting what should be deemed to be “matters in issue or points controverted,” in contemplation of the rule. Besides, the application of the rule is not without its difficulties in many cases. Ordinarily, it involves an inquiry as to the identity of the subject-matter upon evidence outside the record in the former case; and, unless the proof admits of only one conclusion, presents a question for the jury.
The plaintiff relies upon the claim that a new issue, not decided in the former trial, is raised by the pleadings and 'proof to the effect that the defendant’s medical examiner was fully informed by the insured at the time of the examination respecting previous illness and treatments by physicians, that the medical examiner informed him how to answer the questions contained in the application, and that he answered according to instructions. Much is made of the claim that there is no res judicata, because there was no judgment rendered in the former suit on the question involved here. The argument is that as the former case finally turned, the question of fraud became collateral only to the judgment rendered, which was for the plaintiff to recover the sum tendered by the defendant; in other words that the judgment rested on the defendant’s concessions and not
This is what occurred in the former suit: There was a trial by jury on the issues raised by the defendant that the policy was of no effect as a binding contract of insurance, for the reason that when the first premium was paid and the policy delivered the insured was not in good health, and for the further reason that it was rendered void by certain fraudulent representations of the insured made in the application for insurance. The defendant tendered and paid into court $489.85 to cover premiums received on the policy in the lifetime of the insured. The case was tried and submitted to* the jury upon the theory that the plaintiffs were entitled to a verdict for that amount in any event. At the close of the evidence there was a motion by
This brings us to the question whether the evidence, received against defendant’s objection, respecting what passed between the insured and the medical examiner supports a new issue, not embraced in the former decision, or is merely additional evidence bearing upon issues that are concluded thereby. The plaintiff’s position is clearly defined in her reply to the plea of res judicata,. The plea is not answered by way of confession and avoidance but is met by alleging facts tending to impeach the former adjudication. Her claim here is that the only thing concluded is that the answers written by the medical examiner in the application were untrue or incomplete. As already said, everything depends upon what was litigated and decided in the final disposition of the former suit. For light on this subject the pleadings and the opinion of the court may be resorted to. National Foundry Works v. Oconto Water Supply Co., 183 U. S. 216, 46 L. ed. 157, 22 Sup. Ct. 111. In this case they furnish conclusive evidence of the precise questions on which the decision rested. Other issues by way of defense AA'ere raised, but
Plaintiff’s argument on this branch of the case overlooks the scope of the decision. It should be borne in mind that among the essential elements of fraudulent representations are intention to deceive and resultant deception. Deceit was the very gist of the defense in the former suit on which the defendant prevailed. Nichols v. Lane, 93 Vt. 87, 91, 106 Atl. 592. So of very necessity the former decision settled the question of deceit as an element of the fraudulent representations so as to preclude further inquiry respecting that matter at this time. It was not a mere incident of the decision, nor a matter that came collaterally in question, but was a matter directly involved in the issue litigated and was necessarily decided to support the conclusion reached. Among the cases in point are Munsell v. Munsell’s Est., 95 Vt. 103, 113 Atl. 521; Gilley v. Jarvis, 94 Vt. 135, 109 Atl. 41; Powers v. Caledonia County Grammar School, 93 Vt. 220, 106 Atl. 836; Blondin v. Brooks, 83 Vt. 472, 76 Atl. 184; Wells v. Boston & Maine R. R., 82 Vt. 108, 71 Atl. 1103, 137 A. S. R. 987; Dietrich v. Hutchinson, 81 Vt. 160, 69 Atl. 661; Lamoille County National Bank v. Hunt, 72 Vt. 357, 47 Atl. 1078; In re Well’s Est., 69 Vt. 388, 38 Atl. 83; Mussey v. Bates, 65 Vt. 449, 27 Atl. 167, 21 L. R. A. 516; Chase v. School District, 47 Vt. 524; Lindsay v. Town of Danville, 46 Vt. 144; Davenport v. Hubbard, 46 Vt. 200, 14 A. R. 620; Church v. Chapin, 35 Vt. 223; Atwood v. Robbins, 35 Vt. 529; Town v. Lamphere, 34 Vt. 365; Thompson v. Gilman, 17 Vt. 109; Rublee v. Chaffee, 8 Vt. 111. In Tudor v. Kennett, 87 Vt. 99, 88 Atl. 520, attention was called by way of caution to the fact that reference to matters as necessarily or essentially involved in the judgment, or as afford
The evidence referred to comes too late to be of any avail on the issue of fraud, for that was set at rest by the former decision. So far as the plaintiff now undertakes to show that the insured’s statements to the medical examiner were not false, or not fraudulent, or that the fraud practiced by the insured in the application would not render- voidable a policy of insurance issued thereon, she is confronted with a conclusive adjudication to the contrary. These questions were manifestly, litigated and determined in the former suit. Nor can the plaintiff escape the conclusive effect of the former adjudication upon the theory advanced that the question now in issue is not the same. The defense interposed is the same. That the evidence relied upon as raising a new issue is merely further evidence on an issue already determined will be seen when the effect claimed for it is noticed. It is claimed that knowledge on the part of the medical examiner is imputable to the defendant. Assuming without deciding this to be so, it would follow, as claimed, that the defendant must be taken to have known, when the policy was issued, that the answers were not what they purported to be. In short, the representations contained in the answers would neither be false nor fraudulent,
A more plausible claim is that the evidence would show a waiver of true answer, or an estoppel to rely upon the defense of fraud. But the plaintiff could not establish such a waiver or an estoppel without disproving the fraud. The former adjudication covered every essential element of fraud such as would avoid the policy and left none of those questions open to controversy. The plaintiff could not now be permitted to show that the defendant had knowledge of the falsity of the representations to disprove the claim of fraud and its consequences. But such
It follows, that there was no question for the jury as to the identity of the issues respecting fraudulent representations in the application. That the subject-matter was the same is conclusively established by the record evidence in the case. Other issues were raised which plainly enough were not concluded by the former judgment and it remains to consider whether they presented any question for the jury.
Among the issues raised by the pleadings to meet the defense of fraud was the claim that a copy of the application was not indorsed on nor attached to the policy when issued. The basis of this issue is the following provision of the contract: “This policy and the application herefor, a copy of which is endorsed hereon or attached hereto, constitute the entire contract between the parties hereto. All statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties, and no such statement of the insured shall avoid or be used in defense to a claim under this policy unless contained in the written application herefor and a copy of the application is endorsed on or attached to this policy when issued. ’ ’ The defendant in effect concedes that the words “written application” as used in this provision include the statements to the medical examiner accompanying an application, and that the effect of the provision is to require statements of the insured, upon which a defense other than fraud is predicated, to be indorsed on or attached to the policy when issued. The pertinent grounds of the motion for a directed verdict were, in substance, these: 1. In view of the issue of fraud, a verdict should be directed for the defendant regardless of whether or not a copy of the application was attached when the policy was issued, (a) because the statements contemplated in the provision of the policy are statements made by the insured in the absence of fraud, both by the express terms of the provision and as a matter of law having regard to public policy; (b) -because the fraud of the insured having been conclusively established, the question is immaterial. 2. On all the evidence there is no question for the jury. 3. If,
The history of the transaction, resting on uncontradicted evidence is this: The original application including “statements to medical examiner” was completed on August 15, 1914, and forwarded to the office of the general agent of the defendant at Manchester, New Hampshire. The application was for $10,000 insurance in two policies of $5,000 each. It was sent to the home office in New York City, August 20, where it was received the following, day. The application was made on a form then in use by the local agent at Burlington. About this time, owing to the disturbance on the Mexican border, the defendant ceased issuing policies free from restriction as to military and naval service and included such service in the occupations or employments classified as. hazardous and restricted during the .first year of the policy. A new form of application had been prepared, which included an agreement respecting military and naval service, to be signed by the applicant. The original application was approved subject to the “war clause” and the two policies as issued contained the restriction respecting military and naval service. The policies were forwarded to the Manchester office with instructions to procure an amended or supplemental application covering the agreement respecting military and naval service before delivery to the insured. In due time a new application, complying with the requirement as to military and naval service, was returned to the Manchester office and the policies were thereupon forwarded to the local agent at Burlington and by him delivered to the insured. The insured was at that time told that photographic copies of the new application would be sent on to be attached to the policies. The new application was received at the home office and attached to the original application on August 29th. Photographic copies of the new application were forwarded to the Manchester office, probably on August 31st, and sent forward from there to the local agent at Burlington on September 2nd, accompanied by a letter instructing the agent to procure and forward the insured’s ¿cknowledgment that the copies had been attached to the policies. After some delay,
“Warren, Vt., Sept. 12th, 1914.
Mutual Life Ins. Co. of N. Y.,
Gentlemen:
I have received and attached to policies # 2,171,545, # 2,171,547, copies of applications for said policies.
Very truly yours,
Orvie M. Jones,
Insured. ’ ’
The policy in suit was the one carrying the last number. This acknowledgment had been prepared by the local agent at Burlington and mailed to the insured for his signature. September 22, 1914, the insured wrote the local agent: “When I sent you the papers yesterday I made a mistake. I am sending you the right ones today, and if you will kindly return the ones-that I sent you yesterday I will attach them as requested.” Thereupon the copies were returned to the insured and the insured’s acknowledgment quoted above was mailed by the insured to the agent who in turn forwarded same and it reached the home office September 25th.
Defendant’s evidence strongly tended to show that when the policies left the home office a copy of the original application, including “statements to the medical examiner,” was attached to each and-that the policies were delivered to the insured with these copies still attached. The policy in suit had no copy of the application attached when produced in court, but bore on its face unmistakable evidence that two papers had at some time been attached at the place where it was claimed the defendant affixed the copy of the original application. The plaintiff offered no explanation for the appearance of the policy in this respect except evidence tending to show that it was in the same condition as when delivered to the insured.
The defendant insists that on the undisputed evidence the copy-of the original application was attached to the policy “when issued” in contemplation of the provision in question. In support of this claim our attention is called, to the meaning of the term “issued” used elsewhere in the policy. It is said in a case cited by the defendant that the term has a double application, and that its meaning is to be determined by the relation in
We come to the consideration of the first of the above grounds of defendant’s motion for a directed verdict. The claim is that the provision restricting the defense to' a claim under the policy applies only to statements made by the insured in the absence of fraud; or, in other words, that where, as here, the defense is fraud in the inception of the contract such as would avoid the policy the fact that the provision had not been complied with would be immaterial. On the other hand the plaintiff claims that unless copies of the application, including the medical statement, were attached to the policy at the time it was delivered no defense can be founded upon statements made therein, and insists that the evidence made the question for the jury whether such copies were attached when the policy was delivered. We have no statute affecting the question, so it is to be determined by the intention of the parties as expressed in the contract. The proper rule of interpretation is stated in Stanyan v. Security Mutual Life Ins. Co., 91 Vt. 83, 99 Atl. 417, L. R. A. 1917 C, 350. Language is to be interpreted in the sense intended
The insured expressly states in the application that the statements and answers contained therein, and all those made to the company’s medical examiner in continuation thereof, are offered as an inducement to the issue of the proposed policy. It is further stipulated in the policy that the application constitutes a part of the contract, the policy and the application constituting the entire contract. So it is, in the absence of a stipulation to the contrary, that the statements in the application material to the risk would ordinarily be classed as warranties. 14 R. C. L. 1027; Schofield’s Admx. v. Metropolitan Ins. Co., 79 Vt. 161, 64 Atl. 1107. The policy obviates this effect by a provision that “all statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties.” The manifest intention is to exclude fraudulent statements from the benefit of this provision, the' distinction being made between statements that are false and those that are both false and fraudulent. Then follows in the same sentence, “and no such statement of the insured shall avoid or be used in defence of a claim under this policy unless contained in the written application herefor and a copy of the application is endorsed on or attached to this policy when.issued.” The evident purpose of this clause of the policy is to give greater certainty respecting matters that may be availed of in defense and to place in the possession of the insured full evidence of what his contract is. These benefits are secured to him by the agreement that certain statements shall not be available in defense unless contained in the written application and a copy of it is indorsed upon or attached to the policy when issued. What statements are thus excluded as matters of defense? Not all, otherwise the descriptive word “such” would have no force or effect. “Such statements” necessarily refer to statements previously mentioned or specified. Daniels v. Clarke, 193 Mass. 84, 78 N. E. 751; 37 Cyc. 513. They
It is said that the original application was rejected and later a new application made out, upon which the policies were issued and upon which there was never any medical examination. This objection is too artificial to require more than passing notice. The evidence is all to the effect that the original application and medical examination thereon were the basis of the contract, subject only to the requirement, already referred to, that the application should be so modified as to conform to the “war clause” of the policy. The policy was executed and sent forward to be delivered when the agreement respecting military and naval service was furnished. The requirement was complied with by signing a new application carrying the agreement, but in other respects identical. In legal effect it was the same as though the agreement had been entered into in a less formal manner. The so-called new application merely effected an amendment of the original to conform to the policy as issued. This also disposes of the claim that there was a question for the jury whether there was any medical examination for the second policy. There was only one medical examination but that was on an application for two policies, one of which is the policy in suit.
Another claim relied upon by the plaintiff is that the defendant waived the right to make the defense of fraud, or is estopped from making it, because it did not return the premiums paid'within a reasonable time, nor give notice within a reasonable time of its. repudiation of the contract. It is insisted that there
The point, to say the least, is very imperfectly briefed by the plaintiff. It is claimed that the delay in taking steps to “rescind” the contract was unreasonable, and that the defendant thereby waived or is estopped from making the defense, but no authorities are cited in support of the claim. It is not claimed, nor could it well be, that there was any unreasonable delay in deciding to treat the policy as void. There was no controversy in the evidence but that the defendant first obtained knowledge of the grounds upon which its defense is based after the death of the insured and in connection with its investigation of the claim. It was only when the proofs of death were received, probably early in October, that, so far as appears, it had any reason to suspect that the policy had been procured through fraud. There was no evidence tending to show that the company could have upon proper investigation, sooner determined what its rights were; so the delay in rejecting the claim would furnish no legitimate basis for an inference of waiver. There is left the question whether the delay in offering to return the premiums was evidence of a waiver or of an estoppel. The delay was certainly not to the prejudice of the plaintiff, for, on receiving notice that her claim was rejected, she immediately insisted on full payment under the policy and promptly brought suit to enforce
The plaintiff treats the matter as though it were a question of rescission, which strictly speaking it is not. The fraud of the insured affected the contract from its inception and rendered it voidable at the option of the defendant whenever the fraud should be discovered. Before the fraud was discovered the event insured against had occurred. Within a time not complained of thereafter, the defendant declared the forfeiture. The real question then is whether by the delay in tendering a return of the premiums the defendant waived the right to insist upon the forfeiture in defense of an action on the poliej^. The right in such circumstances to recover premiums paid on the policy is not involved. As to this, there is some disagreement in the cases, though the view is generally taken by text-writers on the subject that actual fraud in the inception of the contract on the part of the insjued forfeits his claim to a return of premiums, notwithstanding the fact that no risk has ever attached. See ease note, 3 L. R. A. (N. S.) 114. But there is little, if any, dissent from the' proposition that a return of the premiums is not essential to the avoidance of a policy, or that their retention is not a waiver of the forfeiture, where the insured was guilty o E fraud in obtaining the policy and knowledge of the ground of avoidance is first had after the death of the insured, when the rights of the parties have become fixed. The question is treated exhaustively in Taylor v. Grand Lodge, etc., 96 Minn. 441, 105 N. W. 408, 3 L. R. A. (N. S.) 114, where the eases- are fully reviewed. See also 14 R. C. L. 1193; note 32 L. R. A. (N. S.) 298. The rule applicable to the circumstances of this case is so well established that we refrain from any extended discussion of the question. We hold that the defendant was not required to do more than it is shown to have done by way of offering to return the premiums to make the defense of fraud available.
We have reviewed all the points relied upon by the plaintiff in the court below in opposition to the motion for a directed verdict. As she is the excepting party we are not at liberty to consider other points not brought to- the attention of the trial court to find error, if perchance any such are made in
Judgment affirmed.