Source: https://supreme.justia.com/cases/federal/us/111/335/
Timestamp: 2019-04-23 10:09:49+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 111 › Moulor v. American Life Ins. Co.
Going to the jury upon one of several defenses does not preclude the defendant, at a subsequent trial, from insisting upon other defenses involving the merits which have not been withdrawn of record or abandoned in pursuance of an agreement with the opposite side.
A judgment will not be reversed upon a general exception to the refusal of the court to grant a series of instructions, presented as one request, because there happen to be in the series some which ought to have been given.
The principle reaffirmed that when a policy of insurance contains contradictory provisions or has been so framed as to leave room for construction, rendering it doubtful whether the parties intended the exact truth of the applicant's statements to be a condition precedent to any binding contract, the court should lean against that construction which imposes upon the assured the obligations of a warranty.
more than that the insured would observe good faith toward it and make full, direct, and honest answers to all questions, without evasion or fraud and without suppression, misrepresentation, or concealment of facts with which the company ought to be made acquainted.
In the absence of explicit stipulations requiring such an interpretation, it should not be inferred that the insured took a life policy with the understanding that it should be void if at any time in the past he was, whether conscious of the fact or not, afflicted with the diseases, or any one of them, specified in the questions propounded by the company. Such a construction of the contract should be avoided unless clearly demanded by the established rules governing the interpretation of written instruments.
This is an action upon a policy of insurance issued by the American Life Insurance Company of Philadelphia. By its terms, the amount insured -- $10,000 -- is payable to Emilie Moulor, the plaintiff in error, her executors, administrators, and assigns, within sixty days after due notice and satisfactory proof of interest and of the death of her husband, the insured, certain indebtedness to the company being first deducted. Upon the first trial, there was a verdict for the plaintiff, which was set aside and a new trial awarded. At the next trial, the jury were peremptorily instructed to find for the company, and judgment was accordingly entered in its behalf. Upon writ of error to this Court, that judgment was reversed upon the ground that, as to certain issues arising out of the evidence, the case should have been submitted to the jury. Moulor v. Insurance Company, 101 U. S. 708. At the last trial there was a verdict and judgment for the defendant.
insured had committed suicide. The offer was denied, and the action of the court thereon is assigned for error. The avowed object of the proof was to establish a waiver by the company of any defense founded upon that clause of the policy which declares that it shall be void in case the insured "die by his own band." Undoubtedly it was competent for the company to waive that or any other defense arising out of the conditions of the policy, but clearly its willingness at one trial to risk its case before the jury upon a single one of several issues made did not preclude it at a subsequent trial from insisting upon other defenses involving the merits which had not been withdrawn of record or abandoned in pursuance of an agreement with the plaintiff.
judgment merely because, in the series presented as one request, there were some which ought to have been given. Indianapolis &c. Railroad Company v. Horst, 93 U. S. 295; Rogers v. The Marshal, 1 Wall. 644; Harvey v. Tyler, 2 Wall. 328; Johnson v. Jones, 1 Black 209; Beaver v. Taylor, 93 U. S. 46; Beckwith v. Bean, 98 U. S. 266.
But there were certain parts of the charge to which exceptions were taken in due form. The rulings the correctness of which is questioned by the assignments of error will be presently stated. It is necessary that we should first ascertain the precise nature of the case disclosed by the evidence.
The seventh question in the application for insurance required the insured to answer yes or no as to whether he had ever been afflicted with any of the following diseases: insanity, gout, rheumatism, palsy, scrofula, convulsions, dropsy, smallpox, yellow fever, fistula, rupture, asthma, spitting of blood, consumption, and diseases of the lungs, throat, heart, and urinary organs. As to each the answer of the insured was no.
"Has the party's father, mother, brothers, or sisters been afflicted with consumption or any other serious family disease, such as scrofula, insanity, etc.?"
The answer was "No, not since childhood."
"Is there any circumstance which renders an insurance on his life more than usually hazardous, such as place of residence, occupation, physical condition, family history, hereditary predispositions, constitutional infirmity, or other known cause, or any other circumstance or information with which the company ought to be made acquainted?"
"Has the applicant reviewed the answers to the foregoing questions, and is it clearly understood and agreed that any untrue or fraudulent answers, or any suppression of facts in regard to health, habits, or circumstances, or neglect to pay the premium on or before the time it becomes due, will, according to the terms of the policy, vitiate the same and forfeit all payments made thereon?"
"It is hereby declared and warranted that the above are fair and true answers to the foregoing questions, and it is acknowledged and agreed by the undersigned that this application shall form a part of the contract of insurance and that if there be, in any of the answers herein made, any untrue or evasive statements, or any misrepresentation or concealment of facts, then any policy granted upon this application shall be null and void and all payments made thereon shall be forfeited to the company."
"And it is further agreed that if at any time hereafter the company shall discover that any of said answers or statements are untrue or evasive or that there has been any concealment of facts, then and in every such case the company may refuse to receive further premiums on any policy so granted upon this application and said policy shall be null and void, and payments forfeited as aforesaid."
"It is hereby declared and agreed that if the representations and answers made to this company, on the application for this policy, upon the full faith of which it is issued, shall be found to be untrue in any respect, or that there has been any concealment of facts, then and in every such case the policy shall be null and void."
had ever been afflicted with any of them in a sensible, appreciable form.
"It is of no consequence in such case whether he knew it to be untrue or not; he bound himself for its correctness, and agreed that the validity of his policy should depend upon its being so."
"That he, the insured, did not know he was then afflicted, is of no importance whatever, except as it may bear upon the question was he afflicted? If he was, his answer (for the truth of which he bound himself) was untrue, and his knowledge, or absence of knowledge, on the subject, is of no consequence."
"You [the jury] must determine whether the insured was at any time afflicted with either of the diseases named. If he was, his answer in this respect was untrue, and notwithstanding he may have ignorantly and honestly made it, the policy is void and no recovery can be had upon it."
To so much of the charge as we have quoted the plaintiff excepted.
is to enforce it according to its terms, for the law does not forbid parties to a contract for life insurance to stipulate that its validity shall depend upon conditions or contingencies such as the court below decided were embodied in the policy in suit. The contracts involved in Jeffries v. Life Ins. Co., 22 Wall. 47, and Aetna Life Ins. Co. v. France, 91 U. S. 510, were held to be of that kind. But unless clearly demanded by the established rules governing the construction of written agreements, such an interpretation ought to be avoided. In the absence of explicit unequivocal stipulations requiring such an interpretation, it should not be inferred that a person took a life policy with the distinct understanding that it should be void and all premiums paid thereon forfeited if at any time in the past, however remote, he was, whether conscious of the fact or not, afflicted with some one of the diseases mentioned in the question to which he was required to make a categorical answer. If those who organize and control life insurance companies wish to exact from the applicant, as a condition precedent to a valid contract, a guarantee against the existence of diseases of the presence of which in his system he has and can have no knowledge, and which even skillful physicians are often unable, after the most careful examination, to detect, the terms of the contract to that effect must be so clear as to exclude any other conclusion.
under a valid contract of insurance. It is its language which the court is invited to interpret, and it is both reasonable and just that its own words should be construed most strongly against itself."
See also Grace v. American Insurance Company, 109 U. S. 278, 109 U. S. 282.
These rules of interpretation, equally applicable in cases of life insurance, forbid the conclusion that the answers to the questions in the application constituted warranties, to be literally and exactly fulfilled, as distinguished from representations which must be substantially performed in all matters material to the risk; that is, in matters which are of the essence of the contract.
adjudged cases, be resolved against the party whose language it becomes necessary to interpret. The construction must therefore prevail which protects the insured against the obligations arising from a strict warranty.
But it is contended that if the answers of the assured are to be deemed representations only, the policy was nevertheless forfeited, if those representations were untrue in respect of any matters material to the risk. The argument is that if the insured was at the time of his application, or had been at any former period of his life, seriously or in an appreciable sense, afflicted with scrofula, asthma, or consumption, his answer, without qualification, that he had never been so afflicted, being untrue, avoided the policy, without reference to any knowledge or belief he had upon the subject. The soundness of this proposition could not be disputed if, as assumed, the knowledge or good faith of the insured, as to the existence of such diseases, was, under the terms of the contract in suit, of no consequence whatever in determining the liability of the company. But is that assumption authorized by a proper interpretation of the two instruments constituting the contract? We think not.
Looking into the application, upon the faith of which the policy was issued and accepted, we find much justifying the conclusion that the company did not require the insured to do more, when applying for insurance, than observe the utmost good faith, and deal fairly and honestly with it, in respect of all material facts about which inquiry is made, and as to which he has or should be presumed to have knowledge or information. The applicant was required to answer yes or no as to whether he had been afflicted with certain diseases. In respect of some of those diseases, particularly consumption, and diseases of the lungs, heart, and other internal organs, common experience informs us that an individual may have them in active form, without at the time, being conscious of the fact, and beyond the power of anyone, however learned or skillful, to discover. Did the company expect, when requiring categorical answers as to the existence of diseases of that character, that the applicant should answer with absolute certainty about matters of which certainty could not possibly be predicated?
Did it intend to put upon him the responsibility of knowing that which, perhaps, no one, however thoroughly trained in the study of human diseases, could possibly ascertain?
We shall be aided in the solution of these inquiries by an examination of other questions propounded to the applicant. In that way we may ascertain what was in the minds of the parties.
requirements of that particular question, and acted in the utmost good faith, by answering no, thereby implying that he was aware of no circumstance in his then physical condition which rendered an insurance upon his life more than usually hazardous. And yet, according to the contention of the company, if he had at any former period of his life, been afflicted with a disease of the heart or lungs, his positive answer to the seventh question, that he had not been so afflicted, was fatal to the contract; this although the applicant had no knowledge or information of the existence at any time of such a disease in his system. So also in reference to the inquiry in the fourteenth question as to any "constitutional infirmity" of the insured. If, in answering that question, he was required to disclose only such constitutional infirmities as were then known to him, or which he had reason to believe then existed, it would be unreasonable to infer that he was expected, in answer to a prior question, in the same policy, to guarantee absolutely, and as a condition precedent to any binding contract, that he had never at any time, been afflicted with diseases of which, perhaps, he never had and could not have any knowledge whatever.
or concealment of facts with which the company ought to be made acquainted, and that by so doing, and only by so doing, would he be deemed to have made "fair and true answers."
If it be said that an individual could not be afflicted with the diseases specified in the application, without being cognizant of the fact, the answer is that the jury would, in that case, have no serious difficulty in finding that he had failed to communicate to the company what he knew or should have known was material to the risk, and that, consequently, for the want of "fair and true answers," the policy was, by its terms, null and void. But, whether a disease is of such a character that its existence must have been known to the individual afflicted with it, and therefore whether an answer denying its existence was or not a fair and true answer, is a matter which should have been submitted to the jury. It was an erroneous construction of the contract to hold, as the court below did, that the company was relieved from liability if it appeared that the insured was, in fact afflicted with the diseases, or any of them, mentioned in the charge of the court. The jury should have been instructed, so far as the matters here under examination are concerned, that the plaintiff was not precluded from recovering on the policy, unless it appeared from all the circumstances, including the nature of the diseases with which the insured was alleged to have been afflicted, that he knew, or had reason to believe at the time of his application, that he was or had been so afflicted.
It results from what has been said that the judgment must be reversed with directions to set aside the verdict, and for further proceedings consistent with this opinion.

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