New Era Life Ass'n v. Weigle

Opinion, Mk. Justice Williams: The rights and obligations of insurer and insured are reciprocal. Each is bound to deal fairly and honestly with the other, in the procurement of the contract for insurance, and any concealment or misrepresentation material to the risk on either side may properly be urged as ground of relief from the contract thus unfairly and fraudulently obtained. The application and policy now before us bristle with the requirements laid upon the applicant. A full disclosure of every circumstance material to the risk is required in writing, and an express covenant that [585] all the statements so made are true is added, which contains among many other provisions the following: “ I hereby covenant and agree that the above answers are true; that a misstatement or concealment of any fact touching my health or material to the question of longevity,” etc., shall render the policy null and void. The other side of the negotiations, the misstatements and concealments of facts “touching the health or material to the longevity” of the insurance company are not provided for. There is no express covenant that the representations of the experienced and persuasive solicitor shall be true. The insured is largely at his mercy, for he has ordinarily no other means of information in regard to the company, the contract, and its value to himself or his family, than that which the interested agent affords him. He represents the company in the negotiations, and his statements are as material to the validity of the contract as are those of the insured. Fraud and falsehood on either side, which induce the making of the contract, afford a ground of relief to the injured party, whether such party be insurer or insured. In the case now before us, the parties to the contract are an insurance company without capital, a mere shell; and a woman desirous to make some provision for her only soil. The representative of the company persuades her, as she testifies, to take a policy upon her life on the mutual side of the company, by telling her that it was in good financial standing in the business world, and had a paid-up capital of fifty thousand dollars. This paid-up capital she was made to understand would in some way provide for the mortuary assessments to be made on the holders of policies on the mutual plan, so that after the payment of her premium and first year’s dues, amounting together to thirty-nine dollars, she would have little or nothing to pay. Neither the agent nor any one else contradicts her in the statement of the representations made to her, but she is sustained by her employer, who testifies that he heard the assurance of the agent made to her more than once, that the company was in good standing and had a paid-up capital of fifty thousand dollars. Two questions are now raised by the plaintiff in error: First: Did the representations relied on relate to a material subject? Next, did the court err in not sending the case to the jury? [586] We agree with the learned judge of the*court below that the solvency of the company proposing to insure was a consideration material to the insured, and that a misrepresentation upon that subject by the agent which induced the applicant to pay her money to a worthless company for a policy that did not insure, was a fraud which rendered the contract voidable by her. If Mrs. Weigle had understood that the company was without capital, without financial standing, and without ability to meet its contracts, she would not have paid her money for a policy in it; but her action was induced, as she states, by the representations made by the agent, and believed by her, in regard to the paid-up capital and financial standing of the company. The representations related to a material subject, and were a material part of the contract: Sunbury Fire Ins. Co. v. Humble, 100 Pa. 495. But ought not this uncontradicted testimony to have been submitted to the jury? If this had been asked in the court below, it would have been proper to submit the question of credibility to the jury, but it does not appear to have been asked. If not asked there, it cannot be complained of here. The point submitted to the court by the plaintiff below, shows that the reliance of counsel rested on the question of the materiality of the representations set up, rather than on the credibility of the witnesses by whom they were proved. The point is as follows: “It appearing by the uncontradicted testimony in the case, that the representation which is set up as a bar to the recovery is immaterial, and in no wise affected the financial standing of the company at the time it was made, it was not such a misrepresentation as would amount to a fraud or prevent a recovery, and the court is requested to so instruct the j.ury as a matter of law.” This is in effect a concession of the fact. The issue raised is over its materiality only. Granting the fact to be as alleged by the defendant below, the point asks a binding instruction that it is an immaterial one, and not sfieh “as would amount to a fraud or prevent a recovery.” It is now too late to complain that the facts should have gone to the jury for determination, when no such suggestion or request was made at the proper time or place. It would be unfair to the court and to the defendant to sustain this assignment of error upon this record. Judgment affirmed.