Provident Sav. Life Assur. Soc. of New York v. Llewellyn

TAFT, Circuit Judge, after stating the facts, delivered the opinion of the court. The uncontradicted evidence showed that the insured had had delirium tremens before making his application for a policy. Two months after taking out his policy he died from exhaustion and heart failure, following a debauch. Even if the statements in the [942] application are to be treated, not as warranties but only as representations, in making- which -the applicant was merely bound to good faith, and even if the law requires that the materiality of the representations should appear to render their falsity a good defense,, we think that it -was* the duty of the court in this case to direct a verdict for the defendant. We think, moreover, that the court was in error in instructing the jury that, to constitute a good defense, the defendant company must, show not only that the statements in the application were untrue, but also that the applicant knew or believed them to be untrue. The statements in the application are made part of the contract, and are expressly declared to be warranties, and they are referred to in the body of the policy as agreements and stipulations. In Moulor v. Insurance Co., 111 U. S. 335, 4 Sup. Ct. 466, it was held that, when there was any reason to doubt the meaning of the contract of insurance, it would be presumed that the statements of the applicant were to be regarded as representations, and not as strict warranties, and the agreement would be presumed to be a warranty only that the answers were made in good faith, and true to the knowledge of the insured. In that case, however, the statements were referred to in the body of the policy as representations, and it was held that terms used in the policy controlled those used in the application. In this case, we do not see any room for doubt or construction. It is impossible to escape the meaning that the statements were intended to be warranties. Strict construction against the company cannot destroy the necessary effect of plain language. Parties have a right to contract in this wise if they will. Clemans v. Supreme Assembly, etc., 131 N. Y. 485, 30 N. E. 496; Foot v. Insurance Co., 61 N. Y. 571. The judgment of the circuit court is reversed, with instructions to order a new trial.