Washington Life Insurance v. Haney

10 Kan. 525 | Kan. | 1873

*535The opinion' of the court was delivered by

Brewer, J.:

The defendant in error recovered a judgment on a policy of insurance issued by the plaintiff in error on the life of his wife Eliza E. Haney. To reverse this judgment this proceeding in error has been brought. The questions presented in the record arise solely upon the exclusion of testimony, and the charge of the court. Eight grounds of error are presented and discussed by counsel for plaintiffs in error in their brief; yet the determination of two or three will dispose of them all and decide the case.

1. Life insurance, Declarations of third party, The first and third points present the same question, and may be considered together. That question is this: Can the declarations of a party, whose life is insured for the benefit of another, made long after the application and ? _ x 1 the contract, be received m evidence against the assured to impeach the truthfulness of the application ? The contract is between the assured and the insurer. The parties are the same whether that which is insured is a human life or a building. There is this difference, that the life being active can by its conduct affect the contract even so far as to annul it, while the building being inanimate and passive has of itself no such power. But aside from this the rights and liabilities of the parties to the contract are the same. The party insured is not a party to the record, and therefore he declarations are not admissible on that ground. She is not party in interest, as the whole benefit and interest inures to the assured. She is not his agent, and authorized to speak for him. Nor does she come within any other rule by which her declarations can be received against him. The question was fully examined and settled in the cases of Rawls v. American Life Ins. Co., 36 Barb., 357; same case, 27 N. Y., 282; Mutual Life Ins. Co. v. Applegate, 7 Ohio St., 292. In the case of Aveson v. Lord Kinnaird, 6 East, 188, the declarations made intermediate the application and the contract were admitted; and in Kelsey v. Universal Life Ins. Co., 35 Conn., 225, declarations shortly prior to the applications were received. *536In both cases however they were considered by the courts as being so near the application as to be properly a part of the res gestee, and in the first case Lord Ellenborough spoke of it as perhaps proper as a sort of cross-examination of the statements made to the medical man. While it may well be doubted whether the reasons given for these two decisions are good, still they in nowise conflict with the well-settled principles upon which the other cases were, and upon which this must be decided.

2. copies of papers set forth in pleadings, The second ground of error is the striking out certain parts of the depositions' of the officers of the company. The depositions were of the president and 'the medical L x examiner.' That which was stricken out was? first, a copy of the application. As the application was set out in the answer, and not denied under oath, its execution was admitted; and even the original would have been surplusage in the testimony. The second part struck out was a statement of the manner of transacting business in the home office of the defendant. We do not see how the ruling of the court either way on this could have wrought injury to either party. The third, and that which presents the most difficulty, is the striking out from the deposition of the president of the company the following:

“I approved it, and a policy was thereupon issued in accordance with the application. In approving of it I was governed entirely by the answers and representations contained in the application, and by the fact that it had been approved by the medical examiner of the company. I never should have approved of the application, nor would the policy have been granted, had I known or had it been stated therein that the parents or either of them of the party whose life was to be insured had died from the effects of a fever-sore, or pneumonia, or that her brothers or sisters had died of consumption, or that the party whose life was to be insured had had bleeding at the lungs. The application was approved and the policy was issued in the full belief on the part of the company that the representations and answers contained in the application were true, and no policy would have been issued had I or the company supposed, or had any reason to *537believe, that the representations.and answers contained in the-application were in any respect false.”

3 validity of opinion’of panies. The ruling of the court was correct. How far false statements, if any there were in the application, affect the validity contract, is a question of law for the court, and not one to be settled by the opinion or judgment of either party. The contract is based upon the application. The law presumes this, and determines the nature and extent of the relation. Were the statements true? That is one question, and this testimony throws no light on it. If false, were they willfully false? If false, did their mere falsity, independent of any question of materiality,,avoid the. contract? It is too plain for controversy that upon these questions this testimony has no bearing, and may be laid aside as; immaterial. Nor can the question of materiality be decided: or affected by this testimony. Where the application is in-writing the law determines what is and what is not material,, a determination which applies to all similar contracts. Campbell v. N. E. Mutual Life Ins. Co., 98 Mass., 402; Muller v Mutual Benefit Life Ins. Co., 31 Iowa, 232. Of course the entering into the contract is, as to either party, a voluntary-matter. Each insurance company may determine for itself upon what conditions it will make its contracts. It may lift any trivial, unimportant matter into an essential prerequisite- and condition of the contract, and no person can make any legal complaint because it insists upon such condition y and. any legitimate testimony which shows that it made such- immaterial matter a condition of or material to its contract maybe given in evidence. Of such nature is the testimony offered in the case of Valton v. Nat. Fund Life Ins. Co., 20 N. Y., 32,. where the company’s officer stated during the pendency of the negotiations that the company would not take a risk under certain circumstances which in fact existed, but the applicant represented did not. But neither party can, without the-knowledge of the other, lift an unimportant and trivial thing into a material and essential fact, and when the contract has been executed by the other party, and it is called upon to *538perform its obligations, say that it intended this trivial matter should be essential, and that it did not exist as represented. If a party would make anything material other than what the law says is material, it must be made known to the opposite party prior to the contract; otherwise the law will determine what is material upon the transactions as they took place between the parties. Hence, what the president of the ■company considered material, and what he would have done if he had known certain things, is immaterial, unless such judgment and determination were communicated to the other party prior to the contract. Not being thus communicated they were properly rejected by the court on the trial.

The remaining points were on the charge of the court. On the application of the plaintiff the court gave this instruction:

“If Mrs. Haney answered the questions put to her to the best of her knowledge and belief, any misstatement by her, unless the same was made willfully and fraudulently, will not-avoid the policy.”

And the court refused the following instructions asked by «defendant:

“1st. That the statements and declarations which are contained in the application for insurance of the said Eliza E. Haney, and set out in the defendant’s answer, are warranties; and if the jury shall find that any of such statements were untrue the plaintiff cannot recover.
“2d. It is immaterial whether such statements contained in said application, and set out in said answei’, were untrue from design, mistake, or ignorance. If any of them are found by the jury to be untrue, the plaintiff cannot recover.
“3d. The statements and declarations made by the said Eliza E. Haney in her application for insurance, upon the faith of which the policy of insurance sued upon was issued, whether regarded as warranties, or representations of facts, must nevertheless be substantially true in all respects material to the insurer to estimate the risk to be assumed; and if materially untrue in any respect such untruths will .avoid the policy, even if such untrue statements were made ignorantly and in good faith.”
“ 6th. The statements and declarations made in Eliza E. Haney’s application for insurance in reply to specific inquiries *539in regard to her own previous health, or to the cause of the death of her parents, brothers, or sisters, are material to the insurers to enable them to estimate the risk proposed, and to determine upon the propriety of entering into the contract; and if they arc in any material respect untrue the policy is void.”

b. Life insurance, Basis of con-cation ,Jfaiseianswers. As the record fails to show that all the instructions are preserved, or all bearing upon the particular points embraced in these, it is doubtful whether under the ruling of this court in Morgan v. Chapple, (ante, pp. 216, 225,) there is anything here we can properly consider and decide. The instructions refused may have been refused because already given, and that given may have been accompanied and qualified by others so as really to present the law exactly as the counsel for plaintiff in error insist it should have been. We find in the record one instruction that qualifies it materially, given at the instance of the defendant, namely: “If at or before the time of making the application for insurance Eliza E. Haney actually had consumption, or any of the other diseases or infirmities enumerated in her application, and as to which she was interrogated and answered ‘No,’ then the policy is void, and the plaintiff cannot recover.” More of similar import may have been given. Yet the instruction complained of is positive, clear, and free from any ambiguity: A . , Í . , to J > ana “ 1<; state ™-e *aw improperly may have misled jury. It becomes therefore necessary to examine it, and in its examination we cannot avoid touching incidentally some of the instructions refused. The policy stipulates as follows:

“This policy is issued and accepted by the assured upon the following express conditions and agreements: 1st. [Here are enumerated a number of conditions, among them the following:] “Or if any of the statements or declarations made in the application for this policy, upon the faith of which this policy is issued, shall be found in any respect untrue.” [Then follow others, and then is the following:] “then in every case the said company shall not be liable for the payment of the sum insured, or any part thereof, and this policy shall be null and void.”

*540We do not understand the clause, “upon the faith of which this policy is issued,” as limiting this condition to a portion of the application, or any particular statements therein. It does not mean to imply that there are certain statements which must be true because the policy is based upon them, while others are immaterial. It means that the policy is issued upon the faith of the whole application, with all its statements and declarations, and that if any of them are untrue the policy is avoided. We must therefore consider the application as a whole, and each party has a right to have it so considered. If the application propounds certain questions, and indicates in what manner they must be answered, it is enough that they are answered in that manner; and when the policy is based upon the statements and declarations of the application, it is based upon them made in the manner and under the rules laid down by the company in the application. If we turn now to the application we find the following:

“Instructions in filling up this application: First, answer each of the questions on the first page, to the best of your knowledge and belief, briefly but explicitly.”

And at the close of the questions and answers of the applicant, and just before her signature, is the following:

“It is hereby declared that the above are fair and true answers to the foregoing questions, and it is acknowledged and agreed by the undersigned that the above statements shall form the basis of the contract for insurance, and also that any willfully untrue or fraudulent answers, any suppression of facts in regard to the party’s health, or neglect to pay the premium on or before the day it becomes due, will render the policy null and void, and forfeit all payments made thereon.”

While the policy for its validity requires truthfulness in the statements of the application, it is enough if they are true according to the degree and conditions of truthfulness required by the application. That is all the parties meant when they spoke of truthfulness in the policy. To presume otherwise, and suppose that the company meant one degree of truthfulness in the application, and another in the policy, is to impute a dishonesty which the law will never presume, and if shown *541to exist will never sustain. We think therefore the. court properly gave the instruction asked by plaintiff, and in so far as those refused convey a different doctrine they were erroneous. The judgment is affirmed.

All the Justices concurring.