Foot v. Ætna Life Insurance Co. of Hartford

Earl, C. Parties to insurance contracts have the right to make their own bargains as in other cases. An insurance policy is to be construed like other contracts with the view to arrive at the intent of the parties. The rule that an insurance policy shall be construed most strongly against the insurer, can be resorted to only when, after using such helps as are proper to arrive at the intent of the parties, some of the language used, or some phrase inserted in the policy, is of doubtful import, in which case the rule should be applied because the insurer Wrote the. policy. Here it is clear that both parties intended that the policy and the application or proposal should constitute the contract between them. They so expressly agreed, and it is so stated both in the policy and the proposal. By the express language of the policy, the proposal, and the answers and declarations therein made are made part of the policy. Hence, the two papers must be construed as if they were embraced in one. All the representations of the assured contained in the policy by being written therein, or incorporated therein by reference to the proposal, are warranties, and must be substantially true, or the policy will be void. (Jennings v. Chenango Mut. Ins. Co., 2 Denio, 75; Chaffee v. Cattaraugus County Mut. Ins. Co., 18 N. Y., 376; Chase v. Hamilton Ins. Co., 20 id., 52; *576 Le Roy v. Market Fire Ins. Co., 39 id., 90; 1 Phillips on Ins., § 891, etc.) It matters not whether the representations are material or not. The parties have made them material by inserting them; and it matters not if the party insured made the untrue statements innocently, believing them to be true. (Duckett v. Williams, 2 Cromp. & M., 348; Lowell v. Middlesex Mutual Fire Ins. Co., 8 Cush., 129-133; Vose v. Eagle Life and Health Ins. Co., 6 id., 42.) Nor does it matter if the agent who procured the insurance for the company knew the true state of the facts. The policy embodies the contract, and must speak for itself. (Jennings v. Chenango County Mutual Ins. Co.; Chase v. Hamilton Ins. Co.; Lowell v. Middlesex Mutual Fire Ins. Co., supra.) Hence, if we should treat Dr. Buehler, upon whose medical examination the policy was issued, as the agent of the defendant, the fact that he had, at the time, knowledge of Maj. Foot’s prior condition, obtained before while not acting for the defendant, it could make no difference with defendant’s liability. The plaintiff in this action must stand by the answers of her husband as embraced in the contract, however innocently they may have been made. To render the policy void on account of the untrue.answers, it was wholly unnecessary that the proposal or the policy should contain a clause expressly providing for a forfeiture on that account. The mere fact that the statements are warranties, and untrue, vitiates the policy. But it is claimed on the part of the appellant, that because the policy incorporates into itself the proposal and the answers and declarations therein made, and provides that the policy shall be void if they are false or fraudulent, therefore it is not sufficient to avoid the policy that they are simply untrue, but to have that effect they must be knowingly and intentionally so. The proposal is made part of the policy, and in that the words “ untrue or fraudulent ” are used. I have no doubt that the words “ false or fraudulent,” written in the policy, are used in the same sense. Effect should be given to both the words, false and fraudulent. If they both mean *577 statements made intentionally and knowingly to deceive, then it was unnecessary to use both, and nothing is added to the sense by the use of both. The word false is sometimes used in the sense of fraudulent, and sometimes in the sense of untrue. The following are instances of the latter use of the word : In Alston v. Mech. Mut. Ins. Co. (4 Hill, 334), Chancellor Walworth says: “ And if the representations be false •in any material point, 'even through mistake, it will avoid the policy.” In Carpenter v. Am. Ins. Co. (1 Story, 62), Judge Story says : “A false representation of a material fact is, according to well settled principles, sufficient to avoid a policy of insurance underwritten on faith thereof, whether the false representations be by mistake or design.” In Mutual Life Ins. Co. v. Wager (27 Barb., 364), Judge Sutherland says: “A^false representation will avoid the policy if the actual risk was greater than it would have been had the representations been true.. In such action it would not have been necessary for the insurers to show that the misrepresentation or concealment was intentional or fraudulent.” Having provided in the proposal which is made part of the policy against both untrue and fraudulent statements, how can we infer that, in the policy based upon the proposal, it was the intention to cut down the force of these words, and confine the avoidance of the policy to statements fraudulently made ? Having embraced the statements made in the proposal in the policy, and thus made them warranties so that if untrue the policy would be avoided, it is not inferable that by the insertion of the words false and fraudulent it was the intention to save the policy from statements simply untrue. These words were inserted for abundant caution. They were intended to cover statements untrue as well as such as were colorably true, but fraudulent in fact. I am, therefore, of opinion that the judge at the trial term erred in his charge as made, and his refusal to charge the jury as requested, and that the judgment was properly reversed at the General Term. There were, doubtless, other errors committed upon the trial, but most, if not all of them, resulted *578 from the erroneous theory upon which the judge tried and submitted the case. They may be avoided upon a new trial. The General Term should not, upon the reversal, have ordered absolute judgment for the defendant. Such a course is rarely proper when there is a reversal at General Term upon exceptions taken at the trial. This, was an appeal to the General Term from a judgment entered upon a verdict. Upon such an appeal, the General Term could only consider the exceptions, and all the evidence given may not have been before it. It could not, therefore, certainly know what might be made to appear upon a new trial. It is only when the appellate court can see that no possible state of proof, applicable to the issues in the case, will entitle the respondent to a recovery that a new trial should be denied to him upon a reversal of his judgment. (Edmonston v. McLoud, 16 N. Y., 543.) In Griffin v. Marquardt (17 N. Y., 28), Judge Comstock says: “ It is proper to say, and to say it with great distinctness, as the opinion of this court, that extreme caution ought to be exercised in refusing new trials where judgments are reversed. The discretion of the appellate court should be exercised in that direction only in cases where it is entirely plain, either from the pleadings or from the very nature of the controversy, that the party against whom the reversal is pronounced cannot prevail in the suit.” It is not sufficient to refuse a new trial, that it is highly improbable that the party defeated upon the appeal can succeed upon the new trial. It must appear that he certainly cannot. This we cannot say in this case, both from the nature of the controversy and from the fact that we may not have before us the whole case made by the plaintiff upon the trial. It follows that the judgment must be reversed, and new trial granted, costs to abide event. All concur.- Judgment reversed.