Reilly v. Empire Life Insurance

Hooker, J.: This is an action by the beneficiary to recover the amount of an insurance policy on the life of the insured. The application for insurance upon the life of the insured stated that he was born November 22,1845. The defendant offered proof tending to show that the insured was born prior to or during the year 1842. In rebuttal, the son of the insured, the plaintiff herein, was called and stated that he was present at the time that application for the insurance was made. The subsequent proceedings are related thus in the record: “ Q. Will you state whether your father said anything about his age at that time ? Objected to as incompetent, for the reason that the application, already in evidence, makes the so-called agent the agent of the insured, and not of the Insurance Company. The beneficiary is bound by the application in this certain form in which it was received by the Company, and it cannot be contradicted by any parol evidence. Plaintiff’s Counsel: I wish to prove by this witness that the agent wrote down false answers instead of truthful ones which the insured gave, and that the application was not read to him, nor was* any of the contents stated. The Court: This contract contains an agreement that he is to be the agent of the insured only, and the point is whether that contract can be made and whether it is binding. The objection was sustained and the plaintiff excepted.” The contract of insurance provided, inter alia: “ It Is Hereby Agreed that the answers and statements in this Application (Parts 1 and 2), whether written by myself or not, are warranted to be full, complete and true, and that this Agreement and the Constitution, or By-Laws, Rules and Regulations of the Company with the amendments thereto, together with this Application, are hereby made part of any Policy that may be issued hereon. That if any misrepresentations or fraudulent or untrue answers or statements have been made, or if any facts, whether material or immaterial, [537] which should have been stated to the Company, have been suppressed, or if any of the answers or statements made are not full, complete and true, or if any condition or agreement shall not be fulfilled as required by such Policy, then the Policy issued hereon shall be null and void, and all money paid thereon shall be forfeited to said Company. That the person soliciting or taking this Application, and also the Medical examiner, shall be my Agents as to all statements and answers in this application.” A verdict was directed for the defendant and the plaintiff appeals. We are of opinion that it was error to exclude evidence tending to show that the insured gave truthful answers to the agent, and that the latter thereupon wrote false answers in the application. In Sternaman v. Metropolitan Life Ins. Co. (170 N. Y. 13) the policy of insurance contained the provision that the persons who wrote in the answers and statements in the application, including the result of the medical examination, were for the purpose the agents of the insured and not of the company. It was there held that the stipulation constituting the medical examiner the agent of the insured was ineffectual, and he remained the agent of the insurance company and did not become that of the insured. In the course of the prevailing opinion Judge Vann said (p. 19): “ The power to contract is not unlimited. While as a general rule there is the utmost freedom of action in this regard, some restrictions are placed upon the right by legislation, by public policy and by the nature of things. Parties cannot make a binding contract in violation of law or of public policy. They cannot in the same instrument agree that a thing exists and that it does not exist, or provide that one is the agent of the other and at the same time and with reference to the same subject, that there is no relation of agency between them. They cannot bind themselves by agreeing that a loan, in fact void for usury, is not usurious, or that a copartnership, which actually exists between them, does not exist. They cannot by agreement change the laws of nature, or of logic, or create relations physical, legal or moral, which cannot be created. In other words, they cannot accomplish the impossible by contract.” It is sought in the case in hand to distinguish between a medical examiner and an agent who solicits the insurance and fills one the application, to the end that the provision in the policy that the solicitor, at least, is the agent of [538] the insured, shall be held to be operative and effectual. The logical result of the reasoning of this court in O'Farrell v. Metropolitan Life Ins. Co. (22 App. Div. 495) leads to a contrary view. It is true that Bernard v. United Life Ins. Assn. (14 App. Div. 142) supports the contention, but we are not willing at this time to assent to that doctrine. In our opinion the reasoning of the Court of Appeals in the Sternaman case is quite sufficient to extend the rule in respect to medical examiners to the cases where it is sought by the contract to constitute solicitors of insurance the agents of the insured. In relation to the solicitor, the company “ created the relation of agency between him and itself by employing him, paying him, etc. It alone could discharge him, and to it alone was he responsible for disobedience or negligence. It could control his conduct by any reasonable instructions, and hold him liable if he violated them.” (Sternaman v. Metropolitan Life Ins. Co., supra, 21, 22.) Continuing the quotation (p. 22) the language is equally well employed of the agency of the solicitor as the medical examiner: “ Thus we have an agency between the company and the examiner established by mutual agreement, with the right on the one hand to instruct, to discharge and to hold liable for default, and on the other to compel payment for services rendered. Hence what the examiner did in the course of his employment the company did, and what he knew from discovery while acting for it, the company knew.” No sufficient, distinction can be made between the two classes of agents, and the rule announced in the Sternaman case relative to medical examiners is applicable here, which leads to the conclusion that it was error to exclude the evidence of the son of the insured. The judgment should be reversed and a new trial granted. All concurred, except Woodward, J., who read for affirmance, with whom Jbnks, J., concurred. Footnotes [*] Sic.