Guiltinan v. Metropolitan Life Insurance

Tyler, J. There was no error in the refusal of the trial court to direct a verdict for the defendant. The testimony of Kenyon and other witnesses called by the plaintiff tended to contradict the testimony of Taylor, and it became a question of fact for the jury whether or not the insured ever sold any liquor while he was employed at the hotel. In answer to questions in the application the insured stated that he was not then and never had been directly or indirectly engaged in the manufacture or sale of -alcoholic beverages. The court instructed the jury that if he was employed in that house generally to do what he was called upon to do from day to day, and as a part of that general employment he sold alcoholic beverages to the guests as they called for thém, he was engaged in the sale of alcoholic beverages within the meaning of the contract. But on the other hand, if this was no part of his general business or employment, even though he did occasionally, out of his ordinary line of duties, by direction of his employer, or otherwise, furnish the guests with intoxicating liquors and take pay for them, he was not engaged in such sale within the meaning of the contract. This instruction was correct. The word “engaged” as used in the application means occupied, and does not relate to an occasional act outside of a regular employment, and the obvious purpose of the question was that the defendant might be informed whether or not this was the applicant’s occupation. The defendant could have had no interest to ascertain whether the applicant, as a servant of the hotel, was occasionally called upon to furnish liquor to a guest. The defendant charged that the insured obtained the ■policy of insurance by fraud; therefore the instruction of [474] the court that the insured was entitled to the presumption of innocence was correct. Childs v. Merrill, 66 Vt. 302. The remarks of the plaintiffs counsel upon the conduct of the defendant in resisting payment of the policy were justified by the evidence and the exception is not sustained. It was “declared, agreed and warranted” by the applicant in his application that his answers and statements were full and true and should be the basis and become part of the contract of insurance. It was recited in the policy that the defendant’s promise to pay the legal representatives of the insured the sum of two thousand ■dollars was made in consideration of the answers and statements contained in the printed and written application, which by the terms of the policy were made warranties and a part of the contract. This part of the policy is set out in the declaration, which also recites the condition in the policy that, if any statement contained in the printed and written application therein referred to were not true, or if any of its conditions were not observed, the policy should thereupon become void. The declaration alleges that upon the written application of the insured the defendant made and delivered to him a policy of insurance upon his life and thereby, in consideration of the answers and statements contained in the application, insured his life for two thousand dollars and agreed to pay that sum to his legal representatives upon proof of his death. It alleges the payment of all premiums, the death of the applicant, proof of death, defendant’s acceptance of the the proof, a tender of the policy and demand and refusal of payment. It does not allege that the applicant’s answers and statements in his application were true, nor that he in his life-time performed all the conditions of the contract by him to be performed. The defendant raised the issue in its notice that it was not liable to pay the amount of the policy for the reason, as it alleged, that certain answers and statements made by the insured in the application in respect [475] to his personal habits, and in respect to diseases with which he and certain relatives had been afflicted, were untrue. The application contains a great number of questions that were answered by the insured, many of them relating to his occupation, to his past and present physical condition, and to his habits in respect to the use of stimulants and narcotics, about which he must have had personal knowledge, and many others relating to diseases with which his relatives had been afflicted, as: “Has either of your parents, brothers, sisters, grandparents, uncles, or aunts now or ever had consumption, cancer, gout, scrofula, diabetes, rheumatism, epilepsy, insanity, or other hereditary diseases?” about which he may or may not have had personal knowledge, and yet all answers were warranted to be true. Was it necessary for the plaintiff to allege and prove the truth of these numerous answers? The rules of law that have been laid down relative to actions upon insurance contracts of this kind are not in harmony. The cases cited on the brief of defendant’s counsel hold in effect that whether the terms used are affirmative or negative, the warranty is a condition precedent, and that its performance must be averred and proved by the party seeking to recover upon the contract. It is apparent that the enforcement of this rule would defeat a recovery in very many cases. After the lapse of years it might be impossible for the administrator to prove affirmatively that the insured never had asthma or bronchitis, or that he had never consulted any other physician than his usual medical adviser. The answers may have been strictly true and yet a failure to prove the truth of one so unimportant as that last suggested would defeat a recovery. It is the purpose of the law to give effect to contracts honestly made rather than to defeat them. To avoid the unjust results of the rule above stated it was held in Sweeney Met. v. Life Insurance Co., 36 Atl. R. 9, (R. I.), in an action [476] where the application and policy were like the ones in this case, that the answers constituted warranties so far as they rested upon the applicant’s own knowledge, without deciding whether statements that obviously could not lie within his knowledge were warranties or not. The court cites Jeffries v. Insurance Co., 22 Wall. 47, which holds that when the statements are made warranties they must be proved; that a party cannot recover upon a conditional contract until he shows that he has complied with its conditions. On the other hand, in Insurance Co. v. Ewing, 92 U. S. 377, it was said by Justice Miller, that if the insurer knew or believed that any of the statements were untrue, it was no hardship for it to single out the answer, the truth of which he proposed to contest, and if he had any reasonable ground to make such an issue, to show the facts on which it was founded; that the plaintiff must prove the issuing of the policy, payment of premiums, death of the assured, proof of death and general performance of conditions, but to say that because all answers are warranties the truth of every one must be proved, would be manifestly unreasonable. In Benjamin v. Conn. Indemnity Asso’n, 32 Am. St. 362: 44 La. Ann. 1017, the modern rule is stated to be that the defendant carries the burden of proving such defenses, which involves the necessity of specially pleading them, and numerous cases are cited in support of the rule, among them May on Life Ins. §591 and 2 Wood on Ins. § 522. Cooke on Life Ins. §§ 14, 93, 123, says that this is the prevailing rule, though this and many of the established principles of the law of life insurance are in direct contrariety to the rule requiring allegation and proof of the performance of conditions precedent. In the able opinion of the Louisiana court, after citing the above works on life insurance and many decided cases, it is.said: “Finally, this court in aline of decisions has maintained the principle announced by Mr. Arnould in his work on insurance, that, as relates to policies [477] of insurance,” all matters in confession and avoidance, including not only those byway of discharge, but those also which show the transaction to be void or voidable, on the ground of fraud or otherwise, shall, be specially pleaded. 2 Arn. on Ins., 1287. The cases cited on the brief of the plaintiff’s counsel generally support this statement of the law, notably, Spencer v. Insurance Association, 142 N. Y. 505; Continental Life Insurance Co. v. Rogers, 119 Ill. 474; Price v. Insurance Co., 17 Minn. 497. In the present case we hold that, upon reason and authority, the plaintiff was not bound to raise an issue in respect to the truthfulness of the answers of the insured. It was a matter of defense which by our statute could be made under the general issue, but it was the duty of the defendant to point out in evidence which of the numerous answers it should contest, and the burden was upon it to establish their untruthfulness. Judgment affirmed.