Schuler v. Metropolitan Life Insurance

REYNOLDS, P. J. Action on two policies of insurance, one a twenty-year endowment policy for $500, dated July 24, 1908, the other an industrial policy for $75, the policy dated July 6, 1908. Both policies were in favor of plaintiff, respondent here, and issued on the life of his wife, it being averred that the company issuing the policies was organized and existing under and by virtue of the laws of the State of New York and authorized to transact business in this State as a life insurance company. It is averred that after the issue of the policy on July 24, 1908, by agreement between the parties, on August 5, 1908, the policy was so modified and changed by defendant that the premiums were changed from semiannual payments of $11.65 to annual payments of $22.41. Besides the demand for judgment for the amount of these policies, the petition claims damages for vexatious delay and for attorney’s fee, interest and costs. The answer, admitting that defendant is a corporation, organized under and by virtue of the laws of the State of New York but authorized to transact business of life insurance in the State of Missouri, admits the execution and delivery of the policy, admits the death of the insured, and that at the time of her death all the premiums had been paid, but denies all the other allegations in the petition. The answer then sets up that about July 1, 1908, at the city of St. Louis, Missouri, the insured made her certain application in writing, wherein she requested and solicited defendant to issue to her and upon her life, the contract of life insurance evidenced by the $500 policy, and that in and by this application it was agreed, that inasmuch as only the officers at the home office of the company in the city of New York have authority to determine whether or not a policy shall issue upon such appli — 63 — cation and as they act on written statements, answers, and agreements therein made, that no statement, promises or information made or given by or to any person soliciting or taking this application for a policy, or by or to any other person, shall be binding on the company, unless such statements, promises or information be reduced to writing and presented to the officers of the company at the home office; and it is averred that the insured stated and represented to defendant, and for the purpose of inducing defendant to issue the policy, that she had never suffered from hemorrhages or any other pulmonary disease or diseases of the lungs, and thereby expressly agreed that in the event the policy was so issued it should have no force or effect, but should be void, if she had ever had such diseases or any of them, or if at the time of its issuance, she was not in sound health; that in accordance with and in pursuance of said application and in reliance upon these statements, and believing them to be true, the defendant company had executed and delivered this policy. But it is averred that at the time of the execution and delivery of the application and for some time prior thereto, the insured had suffered from hemorrhages of the lungs and pulmonary tuberculosis, and that by reason thereof at the time of the issuance and delivery of the policy, she was not in sound health; that said facts as to the condition of her health were at the time unknown to defendant, and did not become known to defendant until after the death of the insured, but that defendant, relying upon the statements contained in the application and believing them to be true, and being deceived thereby, was led and induced to issue this $500' policy, which it would not have done had it known the true condition of the health of the insured; that the insured continued to suffer from hemorrhages of the lungs and pulmonary tuberculosis up and until the time of her death, and that these diseases contributed to and ac — 64 — tuallv caused her death, wherefore it is averred that by reason of the conditions of the application - and premises, the contract was from its inception, void and of no effect; and that as soon as the fact of the existence of these diseases became known to defendant, it gave due notice that it repudiated and refused to be bound by the contract and offered to return to the proper representatives of the insured, the premiums paid on the policy, bringing the amount of these premiums into court to be awarded to whoever the court sbnnld dfitfiTTnino. The answer to the second count of the petition, which was on the $75 policy, sets out in substance that it was agreed in said policy that it should be void if the insured, before its date, had suffered from any pulmonary disease, or any disease of the lungs; that its terms could not be changed, or its conditions varied, except by written agreement signed by the president or secretary of the company, and that agents, including superintendents and assistant superintendents, are not authorized and have no power to make, alter or discharge contracts or waive forfeitures. This answer then follows the line of that to the first count as to the insured'having had pulmonary consumption, diseases of the lungs, of which she died — the defendant ignorant of her diseased condition until after her death. Tender of the premiums is also averred, it being claimed that by reason of these premises the policy is void. After a general denial of the new matter, plaintiff, replying to the answer to the first count of the petition, pleads section 58, page 1714, volume 3, Con. Laws of the State of New York, hereafter to be noticed, requiring the application to be indorsed and attached to the policy, averring that this statute was in force at the time of the issuance of this policy, and that when it was issued neither the application nor the substance thereof was indorsed on the policy. In further — 65 — reply.it is averred that defendant, by its agents, solicited and procured the insured to take out the policy, and made its own examination, through its agents, of the physical condition of the insured at the time of the issue of its policy •, knew her condition; asked its own questions as to her physical condition; reduced her answers to writing for and on behalf of itself; knew the insured’s condition and'took and assumed all risks of insured and made its own application to the company and induced and procured the same of its own volition and request, and in all matters acted, in taking the application of the insured and making the examination of her condition and in issuing the policy, as the agent of the insurer, “and not of plaintiff” (sic), and that if, as a matter of fact, “plaintiff” (sic) was not in good health at the time the insurance was effected, or suffered from any disease, as set up in the answer, the defendant, its agents and solicitors knew the facts at the time and knew the full condition of the deceased, and knowing the same, waived all the provisions and requirements as to health and condition of the deceased, and issued the policy, and should he estopped from now setting up the facts pleaded by it. This was substantially repeated in reply to the second cause of action. It was in evidence that the amount of the premiums paid by the insured under the policies in suit had been paid into court. The cause was tried before the court and a jury and resulted in a verdict against defendant in the sum of $847.75, that verdict made up of $500 on the one policy, $107 interest on that from July 24, 1909', $100 attorney’s fee, but nothing for damages for vexatious refusal to pay, making a total of $707 on the first count; and on the second count, or industrial policy, the verdict was for $75 for the face of the policy, $15.75 for interest from July 24, 1909, $50 attorney’s fee, but — 66 — nothing for vexatious refusal to pay, a total of $140.75 on this industrial policy. Judgment followed. Defendant interposing a motion for new trial and excepting to that motion being overruled, has duly perfected its appeal to this court. The learned counsel for respondent very strenuously argues that under the New York law referred to, as well as under section 6978 of our Revised Statutes 1909, the court should not have permitted appellant to have introduced in evidence the application, and that with this evidence eliminated, and the errors assigned by appellant over this, the judgment should be affirmed. Counsel for appellant, however, contends that there was error in admitting in evidence the New York law and that this being a Missouri contract it is to be interpreted and determined by our laws. We think the contention that these policies are to be treated as Missouri contracts is correct. These policies were negotiated in Missouri, with Missouri citizens and residents, delivered here, and the premiums collected here. Our Supreme Court held in Cravens v. New York Life Ins. Co., 148 Mo. 583, l. c. 599, 50 S. W. 519, that although the contract provides that it should be construed according to the laws of the State of New York, and that the place of the contract was agreed to be the home office of the company in the city of New York, that nevertheless it was a Missouri contract. This was reiterated in Horton v. New York Life Ins. Co., 151 Mo. 604, l. c. 616, 52 S. W. 356, It was repeated and authorities cited by the Kansas City Court of Appeals in Whittaker v. Mutual Life Insurance Company of New York, 133 Mo. App. 664, l. c. 668, 114 S. W. 53, and by the Springfield Court of Appeals in Haven v. The Home Insurance Co., 149 Mo. App. 291, l. c. 294, 130 S. W. 73. To quote Judge Johnson in the Whittaker case, supra (l. c. 668), “That the policy must be regarded as a Missouri contract subject to the — 67 — insurance laws of this State, is not a debatable proposition. ’ ’ The New York law requires that every policy issued and delivered within that State on and after January 1,1907, ‘ ‘ shall contain the entire contract between the parties and nothing shall be incorporated therein by reference to any . . . application or other writings unless the same are indorsed upon or attached to the policy when issued; and all statements purporting to be made by the insured shall in the absence of fraud be deemed representations and not warranties. Any waiver of the provisions of this section shall be void. ’ ’ We have a very similar provision in section 6978 of our Revised Statutes of 1909, in article IV, chapter 61, as follows: “Every corporation, company or association transacting business under the provisions of this article shall, upon the issuance of every policy, attach to such policy or indorse thereon the substance of the application upon which such policy was issued, and which is made a part of the contract of insurance, or referred to therein, or which may in any manner affect the validity of such policy.” This section first appeared as section 7929, Revised Statutes 1899. It applies to this defendant, which is a corporation conducting business in our State, although organized under the laws of the State of New York. Doing business here, making contracts here, oiir laws enter into its contracts made here. [Cravens v. New York Life Ins. Co., supra.] While it was error to admit the ,New York law in evidence, it was immaterial error. We cannot say that its admission, was prejudicial. The court admitted it “subject to objection” and did not afterwards pass upon it, and certainly did not instruct on it. Construing this New York statute, which it will be seen very closely follows our own, it has been held — 68 — that a failure to attach that part of the application covering the examination of the physician to the policy, shut out defenses based upon misstatements in connection with the medical examination. [Becker v. Colonial Life Ins. Co., 138 N. Y. Supp. 491.] In New York Life Ins. Co. v. Fletcher, 117 U. S. 519, Mr. Justice Field, speaking for the Supreme Court of the United States and commenting on the effect of the clause in the application and in the policy, that no statements, representations or information made or given by or to the person soliciting or taking the application, or to any person, shall be binding upon the company or in any manner affect its rights unless such statements, etc., be reduced to writing and presented to the officers of the company at the home office of the company, held (l. c. 534) that having the copy of the application, which was attached to his policy, before him, the insured “would have discovered by inspection that a fraud had been perpetrated, not only upon himself but upon the company, and it would have been his duty to have made the fact known to the company. He could not hold the policy without approving the action of the agents and thus becoming a participant in the fraud committed. The retention of the policy was an approval of the application and of its statements. ’ ’ So the reason for this section 6978 of our statute appears; it does afford a material safeguard for the insured in giving him an opportunity, after the policy has been delivered, to examine it and correct any misstatements which may be found in the policy itself or in the application. When the insurance company fails to follow out this statutory provisions, it should not be permitted, on being brought into court, for the first time to confront the plaintiff or claimant with such a very material matter as is here claimed to be a part, of the very essence of the contract, namely the application and its accompanying certificate; should — 69 — not be allowed to hold the insured to a knowledge of all that was in the paper which had been kept from him from the time of its execution until brought forward by defendant to defeat the action. "We all know, courts as well as people generally, that applicants for insurance sign such papers without careful scrutiny. It was to guard against such traps for the unwary that our statute was enacted. Here the evidence is that neither the insured nor her husband were ever furnished with a copy of the application nor its substance, meaning by the application the personal one and its accompanying physician’s certificate. [See Becker v. Colonial Life Ins. Co., supra.] And when the attorney for plaintiff, sometime after the institution of this action, demanded a copy, he was not shown the application until some six or eight months after that demand. Fair treatment demanded more than this, and the absence of a copy of the application or of its substance from the policy itself, and in the light of the requirement-of section 6978, that application, and its accompanying certificate, should have been excluded from the jury so far as concerns the first count of the petition. But it is argued that this section of our statute carries with it no specific penalty. The answer is, that the statute requires the thing to be done. One cannot, failing to obey the law, claim any right founded on that disobedience. By failing to attach the policy or its substance, defendant, under the law, lost whatever benefit it might seek under the application. The converse of the proposition here presented came before us in Coscarella v. Metropolitan Life Insurance Co., 175 Mo. App. 130, 157 S. W. 873. There it was held that the failure o'f this- same defendant, defendant there, to attach the application or its substance to the policy, as required by section 6978, could not deprive the plaintiff of the benefit of the statements of the medical examiner of the defendant, attached to the application, and that those' statements could be used against the de — 70 — fend ant by tne plaintiff in making ont bis claim. We are not holding that the failure to attach the application or its substance to the policy nullifies the policy. What we do hold is that this absence bars defendant from using it against plaintiff. It follows that .when plaintiff introduced the policy, its execution admitted, payment of premiums admitted, the death of the insured admitted, and plaintiff being the beneficiary, that defendant should not have been permitted to introduce the application and its certificates to sustain its defense of misrepresentations. As, notwithstanding this evidence of the defendant, plaintiff recovered, this error does not affect the verdict and judgment on this first count, if there were no other errors. Turning to the evidence in the case relevant to the second count, as to misrepresentations as to the condition of health of the insured, and it may be said that this also covers the facts involved in the first count and the statements in the application, there was evidence tending to show that the husband of the insured had told the physician who examined her for the company,- at the time when he was making the examination, that the insured had been afflicted with pulmonary tuberculosis, of which disease she died, and that this physician had also then been given the name of the physician who attended her for that disease; in brief, that defendant issued both policies with knowledge, on the part of its agents, of her condition. This was in direct contradiction to the answers as taken down by the physician. The weight to be given to this was for the jury. They were properly instructed on the law applicable and their verdict concludes us on both counts. Without going into the instructions in detail, it is sufficient to say of them that we think they properly presented the issue to the jury in the most favorable light that the defendant was entitled to have. At the close of the case defendant interposed a demurrer and — 71 — now contends that there should have been a directed verdict for the defendant. That is untenable. Learned counsel also contends that the verdict is against the weight of the evidence. But the weight of the evidence is for the consideration of the trial court, not of the appellate tribunal. It is very strongly argued by the learned counsel for appellant that the court refused to allow it to take up that part of the application, the questions in which had been asked by Dr. Haase, the examining physician for the company, and to ask him to state to the jury whether or not he had asked each particular question and the insured had made the answer as written down in the application. The court declined to permit this. Having allowed Dr. Haase to testify in general that the application before him was the one which he had before him when he visited the insured, and that he had asked her the questions and written down the answers as they appeared there, this application was introduced in evidence. All of this contention fails when we hold, as here, that the application, of which this was a part, should not have been admitted in evidence for the defendant, it not having been attached to the policy. It is not out of place, however, to say, that haying this general answer, which covers the whole application and all the questions and answers in it in evidence, it was within the sound discretion of the court to say whether it would permit counsel to take up each question and answer in detail and put them to the witnesses. We see no error in refusing, to allow this. Error is assigned to the allowance of testimony as to conversation between a soliciting agent of the defendant, now dead, and the husband of the insured, plaintiff here, that agent, it was claimed, having said that he considered the insured an unsafe risk and had asked plaintiff to have the policy changed from a twenty-year endowment, which was the form of policy — 72 — ultimately written. As we have held in Carroll v. United Rys. Co., 157 Mo. App. 247, 137 S. W. 303, conversation with the agent and a party to the transaction and another party to that transaction or contract and cause of action, that agent being dead, is not admissible. But this evidence was merely cumulative. There was other evidence that established this fact, testified to beyond question, and we do not think that the admission of it in the very casual way in which it came in, is reversible error. [Floyd v. Prudential Ins. Co., 72 Mo. App. 455 l. c. 460.] It is claimed that the insured is bound by her statements in the application, in the absence of showing fraud or deceit on the part of the agent writing the application, and there being no allegation in the reply that the application was procured by fraud, that it was error for the court to allow witnesses to testify to what they had told the examining physician. This assignment falls under our ruling that the application should not have been admitted in evidence. The action of the court in modifying the instructions asked by defendant and which were then given with the modification, is also assigned for error. We are not advised by the bill of exceptions what the modification was. Gathering this, however, from the briefs of counsel, we are to presume that it was adding to the requested instructions asked by defendant the words “that the verdict should be for plaintiff unless they [the jury] found under the instructions in the case that the defendant waived the truth of the representations made by the insured.” We find no exception to the alteration of any instructions but there is exception to the instructions as given by the court, and in the instructions as given by the court this clause appears, after saying that under all the circumstances the jury should find for-defendant, “unless you find under the instructions in this ease that the defendant waived the defense of — 73 — the truth of said representations.” With this addition there was no error in these instructions, if this was an addition. There was no error in the instructions which the court gave of its own motion, in fact they were very favorable to defendant and would have been erroneous if, as they purported to cover the whole case, they had not been followed by this cautionary proviso, Exception is also taken to the action of the court in refusing an instruction defining “vexations delay,” that instruction as asked being “that by the term •‘vexatious delay,’ as used in these instructions is meant action not taken in good faith and with probable cause but rather in an effort to embarrass or annoy.” We do not say that this instruction would have been error if given. It is true that the term “vexatious” is, in a way, a technical term, but it is also a term of very common use. We think it was sufficiently defined to the jury here by the court when it told the jury, in instructing as to the amount of the verdict, that if the jury should find ‘ ‘ from all the facts and circumstances shown by the evidence that this refusal to pay was vexatious, that is, without reasonable cause, then you may allow” plaintiff, in addition to the amount of the policy referred to, interest and a reasonable attorney’s fee. We think this sufficiently defined and intelligently put to the jury the meaning of the word “vexatious.” With that in the instructions on both the first and second counts, we see no error in the refusal of the instruction as asked by defendant on that point. Error is assigned to an instruction given at the instance of plaintiff, to the effect that if they found from the evidence that the insured or any one for her “made known to an agent or superintendent or examining physician of defendant company the facts relative to her physical condition with reference to hemorrhages o-r pulmonary disease and of her confinément and treatment therefor, or if such agent, superintendent or examining physician knew such facts, then — 74 — his knowledge is the knowledge of the defendant company and if said compamy with said knowledge issued and delivered the policy sued on in the first count of plaintiff’s petition, it thereby waived the defense of said answer being true and your verdict should be for plaintiff on the first count of his petition.” The words underscored are the ones particularly objected to, it being claimed that knowledge to every agent of the corporation is not legal knowledge to the corporation. With the application in evidence and against the conclusiveness of which as against plaintiff, this instruction was levelled, we do not think that it is subject to this interpretation. The agents to whom the facts concerning the physical condition of the insured are shown by the evidence to have been known, were the examining physician, who here was the agent of the insurer (Floyd v. Modern Woodmen of America, 166 Mo. App. 166, 148 S. W. 178), and sent by defendant, and the assistant manager or superintendent at St. Louis. So that the jury, in applying this instruction to the evidence in the case, must have fully understood that it referred to the knowledge of these particular officers and that it did not give them a roving commission to inquire into the possibility of some other agent knowing it. That is not the sense nor the fair meaning of this instruction and we see no error in it. The knowledge of the local agents who negotiated the contract is the knowledge of the company. [Manning v. Connecticut Fire Ins. Co., 176 Mo. App. 678, l. c. 689 and cases there cited, 159 S. W. 750.] And this is so even in the face of a contrary provision in the application or policy. [James v. Mutual Reserve Fund Life Assn., 148 Mo. 1, l. c. 10, 49 S. W. 978.] The court gave the instruction usual in so many cases as to the credibility of witnesses. The form of that instruction is not objected to, but it is urged that it is a comment upon the evidence and should not have been given as no witness was impeached by evidence — 75 — of Ms bad character for truth or veracity, or by showing that he had made statements out of court inconsistent with his evidence. "We do not understand that instructions of this Mnd are limited to cases of impeachment or where impeachment occurs. There was a very sharp conflict in the evidence here on very material matters connected with it. As for instance, the examining physician testified most positively to a certain fact and witnesses for plaintiff directly contradicted him. This, too, on a very material fact, and under the evidence' in the case we cannot see that this instruction was improper. Finally, it is urged that the verdict is not responsive to the issues and is excessive and that the allowance of attorney’s fee was excessive. Taking up the latter proposition, the attorney testified to the value of his services. It is true he did not set those services out in detail, but he did testify that in his opinion they were worth from $100' to $200 in one case and $50 in the other. It was open to defendant to develop by cross-examination the nature and extent of those services. Having an opportumty to do so and not availing itself of it, it cannot now complain. It does appear that in casting up the interest in this case on the sums represented in the two policies, the jury fell into an error, calculating interest from July 24, 1909. This is error. The court instructed the jury that if plaintiff recovered he was entitled to the amounts of the policies with interest on those amounts at six per cent per annum from the 10th of September, 1909. So there is an excess of interest of $4.39. Other than this, we find no reversible error. If, therefore, plaintiff will remit this sum of $4.39 within thirty days, the judgment of the circuit court will be affirmed. Oh.mwise the judgment will be reversed and the cause remanded. Nortoni and Allen, JJ., concur.