Court Opinion

ID: 5189051
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:33:06.500315+00
Date Added: 2024-06-11T08:26:51.231934
License: Public Domain

Ingraham, J. (dissenting):
I do not concur in the affirmance of this judgment. The learned trial judge in submitting this case to the jury imposed upon the •defendant the burden of establishing a fraudulent intent on the part •of the assured in procuring the policy instead of leaving it for the jury to determine whether the assured had falsely answered a question, which answer he had warranted was in all respects a fair and true answer to the question. The facts developed upon the trial presented an unusual case, in which there was strong indication that the policy was obtained for the purpose of defrauding the defendant. But, assuming that the testimony was not of such a character as would justify the judge in directing the jury to find a verdict for the defendant, it seems to me that the jury should have been instructed that if they should find that the answer to the question, to which attention will be called, was not in all respects a fair and true answer, the plaintiff was not entitled to a verdict. The application for this policy of insurance was dated June 19, 1895. It was based upon answers to certain questions by the assured, one of which was: “ Is there any fact relating to your physical condition, personal or family history, or habits, which has not been stated in the answers to the foregoing questions, and with which the company ought to be made acquainted ? ” The assured answered “ No; ” and at the foot of this answer he signed the following: “It is hereby declared and warranted that the above are in all respects fair and true answers to the foregoing questions; and it is agreed by the undersigned that this application and the several answers, warranties and agreements herein shall be the basis of, a part of the ■consideration for, and a part of the contract of insurance, * * * and that if there be in any of the answers herein made any fraud, untruth, evasion or concealment of facts, then any policy granted upon this application shall be null and void.”
On June 20, 1895, the policy was issued by the defendant upon this application; and on April 14, 1896, the assured died in Philadelphia under circumstances which at least suggested a suspicion of suicide. The circumstances by which the defendant sought to prove that this answer was false are as follows: The assured had been, in the month of December, 1893, accused by his employers of embez*146zlement and foi’gery, and after such accusation he went to a hotel in the city of New York and attempted to commit suicide by inhaling gas. The attempt, however, was discovered' and his life was saved. Immediately after this attempt at suicide the assured was arrested, and in March, 1894, the grand jury of the county of New York indicted him for grand larceny in the second degree and for forgery in the third degree; and upon these two indictments the assured was admitted to bail. The trial was postponed from time to time until ■ the month of June, 1895, when he procured this policy of insurance. The policy contained a condition that death after conviction of a felony was not assumed by the policy, and that in such a case the policy should become and be null and void. After this policy had been obtained the assured confessed that he was guilty of forgery in the third degree, for which he had been indicted, and his counsel certified that this confession was freely and voluntarily made. On June 19, 1895, when the assured made the application for this policy of life insurance, the condition was, therefore, as follows : He had been charged by his employers with the crimes of larceny and forgery, and when thus charged he had attempted to Commit suicide ; and he had been subsequently arrested and indicted for those crimes, the trial under the indictment having been postponed. He knew that he was guilty of the charge against him. With these facts, which certainly must have been known to him, he was asked by the insurance company, “ Is there any fact relating to your * * * personal or family history * * * which has not been stated in the answers to the foregoing questions, and with which the company ought to be made acquainted 2 ” He answered, “No.” Was that a true answer? If there was in this answer any “ fraud, untruth, evasion or concealment of facts,” then by the agreement of the assured this policy was void; and it seems - to me that the question to be submitted to the jury was whether there was in the answer to this question by the assured any “ fraud, untruth, evasion or concealment of facts.”
In his charge the learned judge, referring to this answer, thus stated to the jury the question that they were to determine: “ Now, if the question was of such a character that he (the assured) must have known that it related to such an event in his history as an attempt to commit suicide, and if he did not convey such informa*147tion to the company or qualify his answer in some way tending to show the company that there was some fact or circumstance that was connected with his personal history of which they ought to be made acquainted, then there was a suppression on his part; there was not a full, fair and honest answer given to the question ; and if that was done by Mm with fraudulent intent, in order that he might be able to secure the issuing of this policy to him, why, then a case of fraudulent concealment or fraudulent misrepresentation would be made, and under such circumstances the plaintiff in this case would not be entitled to recover.”- After the charge had been given in this form, counsel for the plaintiff asked the court to charge: “ If from the testimony it is as reasonable to infer that Louis did not intend to defraud the company in answering the eleventh question, as it is to infer that he did intend to defraud, then the jury is not justified in finding in favor of the defendant on this defense.” To that counsel for the defendant excepted. At the request of the plaintiff the court also charged: “ I will charge the jury that if Louis did not fraudulently conceal the fact, if it be a fact, that he had" made an attempt to commit suicide, then the policy was not avoided; but that they must find that Louis actually did conceal or suppress, or fail properly to answer the question with respect to the fact, if found to be a fact, that he had made an attempt to commit suicide.” To that counsel for the defendant excepted.
I think that this was error. As before stated, under the agreement upon which this policy was based, if there was in any of the answers any “ fraud, untruth, evasion or concealment of facts,” the policy was void. The court by its charge, to which attention has been called, required the jury, before they could find for the defendant, to find a fraudulent intent, while under the agreement it was to be “ fraud, untruth, evasion or concealment of facts ” in answering this question.
Couhsel for the defendant requested the court to charge the jury, "as matter of law, that the concealment of such an attempt at suicide was a material matter which the defendant was entitled to know, and not being informed thereof, the defendant is entitled to a verdict.” That was declined by the court, and the defendant excepted* and in the charge the court left it to the jury to say whether or not this was a material fact. I am inclined to think that *148the court should have found that this was a material fact.- But, . certainly, if it was a question for the jury, then the exclusion of the evidence offered by the defendant, that there was a usage and practice ainong life insurance companies doing business in the United .States bearing upon the question of the application for a risk by a .party who had attempted suicide, was error. Other questions were • asked upon the same subject as to the custom among all insurance companies in the United States and doing business in the State of New York, and, also, as to whether or not there was a rule of this defendant corporation refusing to issue any policy to a person who had attempted suicide, and that such a fact would have been deemed by the company a material fact in passing upon his application, which were excluded by the court, and to which the defendant excepted. Certainly if the question of the materiality of the fact was a question for the jury, evidence of such a usage generally among insurance companies, and particularly the usage in conducting the business of the defendant, was competent upon the question of materiality.
No case in this State called to our attention determines the rule to be applied where there is evidence that an answer to a general question is false. The eases of Mallory v. Travelers' Ins. Co. (47 N. Y. 52) and Rawls v. American Mutual Life Ins. Co. (27 id. 282), relied upon by the plaintiff, were cases in which the policy .was sought to be avoided because of the concealment of a fact by the assured which was not called out by any question asked him by the company. In both of those cases the defense was not that the assured had falsely answered a question asked him upon which the policy was based, but that he had concealed a fact which was material .in determining whether or not the policy would have been granted. Thus, in the Bawls case, in announcing the rule applicable to the decision, the court says: “ The mere omission to state matter not called for by any specific or general question would not be a concealment and would not affect the validity of the policy.” The same question was presented in the Mallory case, where it was expressly said that the “ cases cited by counsel were cases Where false answers were given to inquiries made, and have no application to this case.” The defense in the case at bar is based not upon the suppression of a fact about which no special or general question was asked, but upon *149a false answer to a question, by which the assured was required to state any fact in his history that the company should know before determining whether or not to issue this policy. It is true this was a general and not a specific question, but the defendant was as much entitled to have this general question answered truthfully and fairly as it was the specific questions.
lit is, however, well settled in this Staté that a false answer to a material question avoids a policy, whether such answer was fraudulent or not. In Smith v. Ætna Life Ins. Co. (49 N. Y. 211) the question that was asked of the applicant was whether the assured had any of several diseases, to which the answer was, “ See surgeon’s report.” The court held that these questions asked were material, and that the concealment as to the answer was fatal to the contract; that an answer to the question was evaded by a reference to the surgeon’s report, and that such evasion was just as fatal to the policy as if the answer had been directly false. In Foot v. Ætna Life Ins. Co. (61 N. Y. 571) it was held that if the statements in the application which were made warranties were untrue, this avoided the policy, although they were made in good faith and with a belief of their truth; that the word “ false ” in the policy was used in the sense of untrue, and did not limit the effect of the warranty to a statement intentionally untrue. And in Armour v. Transatlantic Fire Ins. Co. (90 N. Y. 450), where the representations were made by the agent of the plaintiffs, and not in answer to any question. put by the defendant, it was held that the plaintiffs could not recover. In that case the court says: “ The representation in this case was not fraudulent, and arose from a mistake or misapprehension of the plaintiffs’ agent, but, nevertheless, it was a very material representation and was untrue. * * * It is not necessary in all cases, in order to sustain a defense of misrepresentation in applying for the policy, to show that the misrepresentation was intentionally fraudulent. A misrepresentation is defined by Phillips to be where a party to the contract of insurance, either purposely or through negligence, mistake or inadvertence or oversight, misrepresents a fact which he is bound to represent truly, * * * and he lays down the doctrine that it is an implied condition of the contract of insurance that it is free from misrepresentation or concealment, whether fraudulent or through mistake. If the *150misrepresentation induces the insurer to enter into a contract which he would otherwise have declined, or to take a less premium than he would have demanded had he known the representation to be untrue, the effect as to him is the same if it was made through mistake dr inadvertence, as if it had been made with a fraudulent intent, and it avoids the contract. An immaterial misrepresentation, unless in reply to a specific inquiry, or made with a fraudulent intent, and influencing the other party, will not impair the contract. But if the risk is greater than it would have been if the representation had been true, the preponderance of. authority is to the effect that it avoids the policy, even though the misrepresentation was honestly made.” And in Dwight v. Germania Life Ins. Co. (103 N. Y. 341), which has become a leading case upon this subject, the question is examined with great care; and after holding that a false statement in answer to a question which had been by the contract made a warranty, avoided the contract, whether material or not, it was held that an answer to a question which was evasive and suppressed material facts, was also fatal to an action based upon the policy. In summing up this branch of the case the court says: “ It' is quite clear that these answers gave no information as to the actual employment and business of Dwight to the defendant, and would have been quite as correct and ' satisfactory if he had represented himself to be a geologist or professor of elocution. We think it was clearly the duty of the trial court upon this evidence to have directed a verdict for the defendant.”
Deference has been made to these cases to show that where the defense is based upon a false answer to á question, or a misrepresentation of a material fact, it is not necessary for the defendant to prove a fraudulent misrepresentation. The distinction between the cases where there must be proof of fraud, and where it is not essential, is as to the materiality of the answer or representation. If the false statement was material, then it is not necessary that fraud should be proved. If it was not material, then proof of fraud is essential.
Applying this rule to this case, the jury could certainly have found that the facts suppressed by the assured were material in determining whether or not this insurance should be given; and if they were material, if the assured intentionally suppressed knowledge of *151material facts, and thereby falsely answered the question, I think that the defendant was entitled to a verdict, although the jury failed to find that there was any fraudulent intention in suppressing this information. In my opinion there should be a reversal of the judgment. '
Judgment and order affirmed, with costs.