Metropolitan Life Insurance v. Moore

Opinion of the court by JUDGE PAYNTER Affirming. This appeal brings in review the judgment of the court [653] on a policy for $5,000 on the life of Abram R. Moore for the benefit of the appellee, Annie M. Moore. The policy did not have attached to it a correct copy of the application as signed by the applicant, and, not being so attached, section 679, Ky. St., 1903, declares that it shall not be received as evidence in any controversy between the parties to or interested in the policy, and shall not be considered a part of the policy or of the contract between such parties. Provident Assurance Society v. Beyer (23 R., 2460) 67 S. W., 827; Rice v. Rice’s Adm’r (23 R., 635) 63 S. W., 586; Manhattan Ins. Co. v. Myers (109 Ky., 372, 22 R., 875) 59 S. W., 30; Provident Assurance Society v. Puryear’s Adm’r (109 Ky., 381, 22 R., 980) 59 S. W., 15; Supreme Commandery v. Hughes (114 Ky., 175, 24 R., 984) 70 S. W., 405. In view of the statutes as interpreted by this court, the application can not be considered in determining the rights of the parties to this controversy. There is another defense based upon á condition in the terms of the policy itself, .and which is as follows: “No obligation is assumed by this company upon this policy until the first premium has been paid, and the policy duly delivered, nor unless upon 'the date of delivery the insured is alive and in sound health.” It is pleaded in the answer that the insured was not in sound health when the policy was delivered, and therefore .it is argued that the policy is void, and never created any obligation upon the company. The policy seems to have been delivered on the 6th of November, 1901, and the insured died in June, 1902. It was not pleaded that there had been any material change in the health of the insured. between the date of the application and the time the policy was delivered. The information obtained by the application and the medical examination necessarily reflates to the family history of the insured, his previous con [654] dition of health, and the condition of his health at the time of the examination. It will be observed that in the condition quoted it is stated the policy is not binding “unless upon the date of delivery the insured is alive and in sound health.” This clause does not have reference to any unsoundness of health at the time of or previous to the application and medical examination. Although insured had not been in sound health at that time, and there had been no material change since then and the delivery of the policy, the clause would not render it void. When it is-not shown, as in this case, that the unsoundness of health did not occur between the application and medicinal examination and the delivery'of the policy, the company must rely on the statements in the application to avoid a recovery on the policy, not upon the clause in question. As to what is the meaning of the words “sound health,” it is unnecessary here to define or to state what unsoundness of health would prevent recovery, nor as to what delay would estop the insurance company from pleading the clause of the policy referred to as a defense to an action on the policy. There is another reason why the appellant did not show its right to.prevent a recovery upon the policy. The annual premium on the policy was $295.15. If its theory be correct that the insured was not in sound health, and the policy was pot obligatory upon it, then before it could prevent a recovery on the policy it should have tendered back the premium it received. If the policy created no obligation on it, then the company assumed no risk for which it was entitled to be p.aid the $295.15, or any part of it, nor is it entitled to withhold it. It has not earned any part of it. Suppose the company had brought an action to cancel the policy for the reason that the insured was not in sound health when it was delivered. Most certainly would it have been necessary [655] for it to tender back tbe money it bad received to maintain tbe action. Tbe mere fact that tbe insured bad accepted tbe policy when not in sound bealtb, and for that reason it was not obligatory, upon tbe company, would not impose a penalty of $295.15 for tbe benefit of tbe company. When a party seeks to cancel a contract upon tbe ground of fraud or otherwise, be must first offer to restore wbat be received in consideration of tbe contract. If A. practices fraud upon B. in tbe exchange of property, and B. seeks to recover tbe property which be let A. have, be is not entitled to maintain an action, unless be tenders back wbat be received in tbe trade. This rule is applicable to tbe case at bar. Tbe judgment is affirmed. Petition for re-bearing by appellant overruled.