Wells v. Metropolitan Life Insurance

Adams, J.: This action was brought upon a policy of life insurance for $360, issued upon the 27th day of November, 1893, by thé defendant to the plaintiff upon the life of her brother, one Martin Mahaney, who died on the 22d day of May, 1895. Shortly after the death of the brother two agents of the defendant, one of whom was its assistant superintendent, called upon the plaintiff and prepared the proper proofs of death, which were duly signed by the plaintiff and delivered by her to the agents, who immediately forwarded the same to the company. After waiting a'reasonable length of time for the defendant to pay the plaintiff’s claim, this action, was commenced. The defendant interposed an answer to the complaint, in which it averred that it was relieved from all liability upon the policy in suit, by reason of the breach of certain conditions and warranties which it, as well as the written application upon which it was .issued, contained. — 20 — The policy in question recites that the defendant, “In consideration of the printed and written application for this policy and of the statements therein contained, all of which are hereby made warranties, and are hereby made part of this contract, and of the payment to the company on or before the date hereof, of the premium mentioned in the schedule below, and of a like weekly premium to be paid on or before each Monday during the continuance of this policy, doth hereby agree, subject to the conditions set forth on the reverse side hereof, each and all of which are hereby made a part of this contract and are accepted by the assured as part thereof as fully as if herein recited, to pay to one of the persons described in condition first, upon receipt of proofs of .the death of the insured, made in the manner, to the extent and upon the blanks required by condition sixth, and upon surrender of this policy and all the receipt books, the amount of money stipulated in said schedule under the words ‘ Amount of Insurance ’ provided, however, that no obligation is assumed by this company prior to the date hereof nor unless on said date the insured is alive and in sound health.” Among the conditions set forth on the reverse side thereof was the following: “ Second. The liability of the company shall cease if the insured shall hereafter engage in military ór naval service (except the miltia when not in active service), or be connected in any capacity with the ale, wine or liquor business, unless sq specified in the application heretofore referred to, or unless permission, signed by the president or secretary, be indorsed on this policy.” And it is alleged that there was a breach of this condition in that the insured, Martin Mahaney, after the issuing of the policy, engaged in, the business of selling liquors, without the written permission of the president or secretary of the company indorsed upon the policy. The only evidence upon which the defendant bases' this contention is to the effect that after obtaining the insurance upon her brother’s life, the plaintiff herself did engage in the saloon business; and that the insured took his meals at her house and occasionally volunteered to wait on a customer at the bar when the' plaintiff was not present. He was not the regular bartender; neither was he — 21 — employed by the plaintiff to dispense liquors 'at her bar, and the service which he- rendered her was purely gratuitous and only occasional. The learned trial justice clearly and properly stated to the jury what constituted the business of selling liquors, as that term is used in the policy, and permitted the jury to say, as a matter of fact, whether there had been any violation of this condition on the part of the insured. We doubt very much whether the evidence upon this branch of the case was sufficient to raise an issue of fact; but however that may be, the defendant certainly has no just cause for complaint at the disposition made of the question by the trial court. It appears from the record before us that the written application upon which the policy in suit was issued, and which is therein made a part of the contract of insurance, is subdivided into four different parts, which are designated respectively A, B, C and D. Part A, which contains certain statements and representations respecting the person upon whose life the insurance is sought, is required to be signed by the applicant. Part B is required to be signed by the insured; and parts C and D, which relate to the physical condition of the insured, by either the examining physician or the agent of the defendant. When the plaintiff decided to take ■ out this policy, the information required by part A was furnished by her and was written into the application by the defendant’s agent, one D. P. Dowd, who testified upon the trial that it was signed by the applicant in his presence. Among the representations and warranties in the application thus signed was one to the effect that the subject of the insurance was born upon the 18th day of October, 1872, and that his age at his next birthday ■ would be twenty-two years. There was also another to the effect that the life of Martin Mahaney was not then ■ insured in any other company, society or association. It is now insisted by the defendant that each of these representations was false in a. material particular, and that, in consequence thereof, the policy became null and void. This claim of falsity is based upon certain statements contained in the proofs of death signed by the plaintiff on the 30th day of May, 1895. These statements wer&, first, that the deceased was born in June, 1871, and second, that the deceased had another policy of insurance of ninety — 22 — dollars in .the Prudential Insurance Company, which was three years old. These statements certainly were inconsistent with those contained in the plaintiff’s application, and, if true, they probably constituted a breach of warranty which avoided the policy. The plaintiff, however, was not estopped, by reason of having made these statements in the proofs of death, from showing that they were inadvertently made, and that, as as a matter of fact,'they were not true. (McMaster v. Ins. Co., 55.N. Y. 222 ; Meador. Amer. F. Ins. Co., 13 App. Div. 476.) This she was permitted to do, and we have no hesitation in saying that the evidence as a whole satisfies us beyond any reasonable doubt, that the statement respecting additional insurance which was contained in the application was literally true, and that so far as the one relating to the age of her brother is concerned, a question of fact was presented which was solved by the jury in favor of the plaintiff, upon evidence which was amply sufficient to warrant the conclusion reached. We conclude, therefore, that upon both of these questions, the verdict of the jury must, in the circumstances of the case,' be regarded as conclusive upon this court. The question which remains for oúr consideration is a somewhat novel one; or perhaps it would be more accurate to say that it is one which arises from' rather peculiar conditions, and it is apparently one upon which the defendant bases its main reliance for a reversal of the judgment and order appealed from. It appears that when the plaintiff executed part A of the application for the insurance upon the life of her brother, the other' parts of the printed form were unexecuted and no answers -had been furnished to any of the questions therein contained. So that when signed and delivered to the defendant’s agents, the plaintiff obviously was wholly unaware of what representations, warranties or statements the application would ultimately contain when executed by ■her brother and the examining physician. Nevertheless, in. the part which was signed by her, there appears the following agreement, viz.: “ I hereby apply for the above-described policy and hereby to induce the company to issue a policy, and as .a consideration therefor, make the agreement as to agency, and all other agreements and warranties contained on the Other side of this sheet, part hereof, as fully as if I had signed the same.” — 23 — And the agreements and' warranties contained on the other side of the sheet, which are thus made a part of the plaintiff’s application, are to the effect that the application was made, prepared and written by the applicant, or by her own proper agent, and that the company is not to be taken to be responsible for its preparation, or for anything contained therein or omitted therefrom; and, furthermore, that the representations.and answers made upon either side of the application are strictly correct and wholly true; that they shall form the basis and become a part of the contract of insurance; that any untrue answers will render the policy issued thereon null and void, and that the insured shall be governed by the rules and regulations of the defendant, as they existed at the time the contract was entered into, or as that they might thereafter be altered or amended. It also appears that, at the time the policy was delivered to the plaintiff, she was furnished with a copy of the defendant’s rules and regulations, among which was a rule requiring that applications for insurance must be personally signed upon their face by the person applying for the insurance, and on the back by the life proposed. It now appears that at some time, but precisely when is involved in great uncertainty, part B of the application was filled out and answers to the various questions therein contained were written in, and it purports to have been signed by Martin Mahaney, whose life was insured. The questions contained in this part of the application relate to the age, health, physical condition of the insured, and also to the condition, of health of certain of his relatives who were living, and to the cause of death of such as were not living. It seems to have been conceded upon the trial that some of the answers to these various .questions were untrue in fact,' and that these statements would, under ordinary circumstances, constitute a breach of the contract of insurance. . If, therefore, this constituted a full and complete statement of the facts of the case, so far as this particular feature of it is concerned, there would, of course, be little or no difficulty in reaching the conclusion that the policy .in. suit had become null and void in consequence of the breach of warranty to wliich reference has just been made. But just here comes in the singular feature of the case, to which allusion has been made, which is -that it is claimed by the plaintiff, and conceded by the defendant, that Martin Mahaney never signed, or authorized any one to sign, — 24 — his name to ■ that part of the application which purports to have, been signed by him. So . that we have this somewhat anomalous. condition of things: The plaintiff is seeking to enforce a contract of insurance which is supposed to -be. founded, to some extent at least, -upon a written application wliich is required by the insurance company to be signed by the person whose life is insured, and which ■she insists never was signed by him; while, upon.the other hand, the defendant is seeking to escape liability upon its contract of insurance by reason of false statements contained in the application, which it concedes was not signed by the person who purports to have signed it. The case, therefore, so far as this particular feature of it is concerned, seems to resolve itself. into these two propositions: Is the plaintiff bound by the answers to the questions contained in part B, it being conceded. that the signature of her . brother thereto is not genuine ? And is the defendant liable upon the policy in suit, in the absence of .an application executed in due form by the person whose life is insured ? In attempting .to answer the first query, it may be assumed that the statements contained in- part B, or some of them, are false, and that, if made by the insured, they would necessarily vitiate the policy. As has been shown, the plaintiff had stipulated as .an inducement for the issuing of the policy by the defendant, that .she would abide by, and become responsible for, the- agreements and warranties to be thereafter made in part B. This stipulation, however, .it is but fair to suppose, was based upon the assurance,, either express or implied, that the representations and answers should be made and sighed by the proper person. In other words, her agreement with the defendant, to all intents and purposes, was that she would guarantee the truthfulness -of- any and all representations which her brother should make in response to the inquiries contained in part B And when-the defendant’s agent left the -plaintiff with the application in his possession, it was for the avowed .purpose of procuring this information from 'the only person who could properly furnish it. The plaintiff, therefore, when she received - the policy and accepted its terms and conditions, had the right to assume, we think, that it had been issued upon the genuine . statements and signature of her brother. — 25 — As has already been suggested, it does not appear who signed the name of Martin Mahaney to part B, or whether it was signed before or after his death, and this perhaps is of little consequence, for whenever, and by whomsoever signed, it was, so far as the record discloses, a forgery of which the plaintiff was totally ignorant, and for which it would be a travesty of justice to hold her responsible. With this conclusion reached, it becomes necessary to consider the case from the point of view involved in the second proposition above stated. It is claimed on the part of the defendant that, inasmuch as the plaintiff stipulated to be governed by the rules and" regulations of the company, one of which was that the application must be personally signed “ on the back by the life proposed,” the policy issued to her could have no validity until this rule was complied with. This contention, which is presented with no little ingenuity, fails to make the same impression upon our mind which it appears to have made upon the mind of the counsel who advances it. But whatever force it may possess as an abstract proposition, we think the circumstances of this case furnish at least two complete answers to it. In the first place, the rule obviously relates to a detail of the business, and was designed for the convenience of the defendant. But however that may be, it is certainly one the observance of which may be waived (Will v. Postal Tel. C. Co., 3 App, Div. 22); and if the defendant saw fit to issue its policy upon a forged statement, or what amounts to the same thing, without any statement at all, we do not see how it can. now take advantage of its own act, by claiming that its policy is thereby invalidated. Assuming, however, that this rule possesses the force claimed for it by the defendant, it seems to be conceded that it was not brought to the attention of the plaintiff until after the policy had been delivered to her. Such delivery,-therefore, was in our opinion equivalent to an assurance by the defendant that all the preliminary requirements of the application and policy had been fully complied with. It is further argued in support of the defendant’s contention that inasmuch as one of the plaintiff’s stipulations is to the effect that the application was “ made, prepared and written- by the applicant or by his own proper agent,” she is bound by any fraud or forgery — 26 — perpetrated by the person filling out any portion thereof, even if that person happens to be the agent or other officer of the defendant, and our attention is directed to a recent decision in the first .department which, it is claimed, is an authority for this proposition. (Bernard v. U. I. I. A., 14 App. Div. 142.) This case holds that an insurance company may properly insert a provisión in its policies similar to the one' above quoted, in order to protect it against the frauds of its agents, as well as of parties' applying for insurance, and also to prevent the avoidance of a breach of warranty by parol evidence- It does not require a very astute mind,, therefore, to discover, that it is of very .little practical benefit to the defendant in the circumstances of the case in hand, for the. plaintiff is not attempting to relieve herself from an embarrassing dilemma by claiming that her brother had furnished to the defendant’s agent true answers to the "questions contained in the application which he was required to sign, but that the agent,, instead of writing in the answers given him, had inserted different ones. She is simply insisting that what purports to be the signature of her' brother, to his part of the application is a forgery for which she should not be held responsible. • That Martin. Mahaney never signed his name, to the application is, as we have seen, not only conceded, but it is expressly averred in the defendant’s answer.; and that it was placed there by some one in 'the defendant's employ seems to be fairly inferable from the evidence before ;us.. In.these circumstances, to hold that the .condition 'in the defendant’s contract of insurance which we have been considering will protect it against its own fraud, would require an extension of the doctrine of the Bernard casé to a point beyond that which we think is fairly warranted. The case under consideration, in our Opinion, is, more properly, one requiring the application of the very salutary -rule that, where a general agent of an insurance company delivers a- policy and receives the premium thereon, with full knowledge that some stipulation or condition upon which depends the very inception of the. contract has not been fulfilled, the company may not thereafter be permitted to defeat the contract by asserting a breach of such-stipulation or condition. ( Wood v. Am. F. Ins. Co., 149 N. Y. 382 ; Robbins v. Springfield F. Iris. Co., Id. 477.) — 27 — Our conclusion of the whole matter, therefore, is that the case was properly tried, and that the verdict of the jury should not be disturbed. Judgment and order affirmed, with costs. All concurred, except Green and Follbtt, JJ., who dissented.