White v. Provident Savings Life Assurance Society

163 Mass. 108 | Mass. | 1895

Barker, J.

The most important question raised by the report is as to the effect of St. 1887, c. 214, § 21, now by the Massachusetts insurance act of 1894 re-enacted as St. 1894, c. 522, § 21. The question is, in substance, whether the provisions of that section include in the word “ misrepresentation ” statements which in insurance law are classed as warranties because expressly said to be warranties by the language of the parties, or whether the section deals only with statements winch are representations, and not with technical warranties. The ruling given was upon the theory that the section did not affect statements which were said in the policy and the application to be warranties, but only misrepresentations as to matters which were the subject of representations, as distinguished from warranties.

The section as it stood in St. 1887, c. 214, § 21, was in these words: “ No oral or written misrepresentation made in the negotiation of a contract or policy of insurance, by the assured or in his behalf, shall be deemed material or defeat or avoid the policy, or prevent its attaching, unless such misrepresentation is made with actual intent to deceive, or unless the matter misrepresented increased the risk of loss ”; and the language of St. 1894, c. 522, § 21, is the same. This language is broader than that of Pub. Sts. c. 119, § 181, which applied only to misrepre^ sentations made in obtaining or securing policies of fire insurance and of life insurance, and which was in these words: “ No oral or written misrepresentation made in obtaining or securing a policy of fire or life insurance shall be deemed material, or defeat or avoid the policy, or prevent its attaching, unless such misrepresentation is made with actual intent to deceive, or unless the matter misrepresented increases the risk of loss.”

The broader language of the section, as it is found in the general insurance act of 1887, was clearly designed to extend the rule;, which up to that time dealt only with misrepresentations affecting policies of fire insurance and of life insurance, and to apply it to misrepresentations made in the negotiation of any contract or policy of insurance of whatever kind. Section 181 of Pub. Sts. c. 119, is merely a re-enactment identical in language with St. 1878, c. 157, § 1, which as to life insurance was a wholly new provision. There was, however, a previously enacted statute concerning the form of fire insurance policies, providing that the conditions of the insurance should be stated in the body of the policy, and that neither the application of the insured nor the by-laws of the company should be considered as a warranty or a part of the contract except so far as incorporated in full into the policy and appearing on its face before the signatures of the officers of the company. This was St. 1864, c. 196, which took the place of and repealed St. 1861, c. 152, which seems to have been the earliest statute dealing with the form of fire insurance policies, and which provided that in all insurance against loss by fire the conditions of the insurance should be stated in the body of the policy, and that neither the application nor the by-laws, as such, should be considered as a warranty, or part of the contract. The provisions of Pub. Sts. c. 119, § 181, were substantially re-enacted in the general insurance act of 1887, and in that of 1894. See St. 1887, c. 214, § 59; St. 1894, c. 522, § 59. Besides the statutes already noted there are also the several enactments, beginning in the year 1873, establishing a standard form for policies of fire insurance. These are St. 1873, c. 331, with the amendatory act St. 1880, c. 175; St. 1881, c. 166, repealing the two acts last cited and prescribing a new standard form of policy; and Pub. Sts. c. 119, § 139, St. 1887, c. 214, § 60, and St. 1894, c. 522, § 60, the last three being substantially re-enactments continuing in force the provisions of St. 1881, c. 166. In the standard form of policy given in St. 1873, c. 331, § 1, is this clause: “ This policy shall be void if any material fact or circumstance stated in writing has not been fairly represented by the insured,” and the same clause is in the standard form given in St. 1881, c. 166, § 1, and in Pub. Sts. c. 119, § 139, in St. 1887, c. 214, § 60, and in St. 1894, c. 522, § 60.

The provisions of St. 1887, c. 214, § 21, are thus seen to be part of a system of legislation, beginning in the year 1861, and then applied only to fire insurance, in which the Legislature has dealt with the subject of statements on the part of the assured affecting contracts of insurance, and which, before the question now raised for decision arose, had been made to apply to all statements made in the negotiation of contracts and policies of insurance of whatever kind.

The St. 1878, c. 157, does not appear to have been enacted in consequence of any recommendation by the insurance department, nor has any construction been given to that statute, or to Pub. Sts. c. 119, § 181, St. 1887, c. 214, § 21, or St. 1894, c. 522, § 21, by that department, or by this court, except so far as the St. 1887, c. 214, § 21, has been dealt with in the case of Ring v. Phœnix Assurance Co. 145 Mass. 426, and that of Durkee v. India Ins. Co. 159 Mass. 514. The case last cited has no bearing upon the present question, nor is that question governed by the decision in Ring v. Phœnix Assurance Co.

The statutes above referred to show a general intention on the part of the Legislature to make, in lieu of the rules which spring from the doctrines held in the law of insurance as to technical warranties and representations, a statute rule by which to determine the effect upon the contract of all statements on the part of the assured, and also the effect of by-laws and similar matters which it might otherwise be contended would avoid or modify the contract.

The distinction in insurance law between warranties and representations is said by Baron Parke, in Anderson v. Fitzgerald, 4 H. L. Cas. 484, 496, to have been laid down by Lord Mansfield. In Pawson v. Watson, Cowp. 785, 787, decided in the year 1778, Lord Mansfield said: “ There is no distinction better know'll to those who are at all conversant in the law of insurance than that which exists between a warranty or condition which makes part of a written policy and a representation of the state of the case. Where it is a part of the written policy, it must be performed. . . . Nothing tantamount will do, or answer the purpose. It must be strictly performed, as being part of the agreement. ... So that there cannot be a clearer distinction than that which exists between a warranty which makes part of the written policy and a collateral representation, which, if false in a point of materiality, makes the policy void; but if not material, it can hardly ever be fraudulent.”

And in De Hahn v. Hartley, 1 T. R 343, decided in 1786, he said: “ There is a material distinction between a warranty and a representation. A representation may be equitably and substantially answered; but a warranty must be strictly complied with. ... A warranty in a policy of insurance is a condition or a contingency, and unless that be performed, there is no contract. It is perfectly immaterial for what purpose a warranty is introduced ; but, being inserted, the contract does not exist unless it be literally complied with.” And in the same case Ashhurst, J. says, “ The very meaning of a warranty is to preclude all questions whether it has been substantially complied with; it must be literally so.”

These doctrines of the law of insurance have long been recognized in our decisions, and their effect was fully pointed out by this court before the enactment of St. 1878, c. 157. See Houghton v. Manufacturers’ Ins. Co. 8 Met. 114, 120; Campbell v. New England Ins. Co. 98 Mass. 381, 389, 401.

It is easy to see how an insurer, by multiplying immaterial statements to be made by the insured, and giving to them by the wording of the policy the technical character of warranties, can, in the absence of any statute provision upon the subject, place the assured in a position in which it will be difficult, if not impossible, for him, although he has acted in good faith, to recover upon his contract because of some inaccurate statement on his part. If he is held to have warranted the truth of a statement, its exact and literal truth is a necessary condition of his right to recover, however immaterial the statement may be, and however honest may have been his conduct. In the opinion of a majority of the court it was the intention of the Legislature, by St. 1878, c. 157, to change this rule to some extent, and to enact in place of it one which should hold the contract valid unless the misstatement, if made in the negotiation of the contract, was made with an actual intent to deceive, or unless the misstatement was of a matter which actually increased the risk of loss; and this with reference to statements which may be said by the parties to be warranties, as well as those which were only representations. Such was already the law as to statements not technical warranties. As to mere representations the statute may well be held to be only declaratory, but as to warranties it made a new rule. In the opinion of a majority of the court, it speaks in terms neither of warranties nor of representations technically so called, but deals with all misrepresentations made in negotiating the contract or policy. Misstatements of fact, whether the statement is said to be by the parties a warranty or a representation, are equally misrepresentations, and are placed in each case upon the same footing by the statute which applies to them if the statements are called warranties by the parties no less than if they are mere representations. And the same construction must, in the opinion of a majority of the court, be given to Pub. Sts. c. 119, § 181, and to St. 1887, c. 214, § 21, which was in force when the policy sued on was written.

It is not necessary at present to consider whether the statute would have any effect if an immaterial statement, declared by the application to be a warranty, instead of, as in the present case, being referred" to in the policy, and thus brought into it by such reference only, were independently written out at length in the policy itself, and thus there declared to be a warranty upon the exact truth of which the policy was conditioned and founded. The statements upon the falsity of which the defendant relies in this case are not incorporated into the policy except by reference to the application. The declaration of the applicant warranting the answers to be true was in his application made in the negotiation of his policy, and was within the operation of the statute. In the opinion of a majority of the court it was not taken out of the operation of the statute by the reference to the application in the policy, but it was “ in consideration of the stipulations and agreements in the application herefor and upon the next page of this policy, all of which are a part of this contract.”

In the trial of the present case a different view of the effect of the statute was held by the presiding judge, who ruled that because the statements of the assured were warranties the provisions of St. 1887, c. 214, § 21, did not apply. The plaintiff’s exception to this ruling was well taken, and because the ruling was wrong the verdict for the defendant must be set aside and a new trial ordered.

We all agree that the ruling was correct that the assured was attended by a physician within the meaning of the question, “ When and by what physician were you last attended, and for what complaint?” if he went to the office of a physician, told him that he had coughed and spit blood, desired him to make a physical examination, to which he submitted, receiving a prescription and paying for the services of the physician, and subsequently calling again at the physician’s office and consulting him professionally and paying him a fee. The circumstances recited show that the assured was under the care and treatment of the physician for a complaint, and was as really attended by the physician as if the latter had seen the assured at his home.

Verdict set aside and new trial ordered.