Court Opinion

ID: 8862817
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:54:04.222068+00
Date Added: 2024-06-11T17:05:53.409222
License: Public Domain

Supplemental Opinion Upon Petition for Rehearing. The appellant has filed its petition for rehearing, insisting that this court misapprehended the statute of Iowa in holding the same constituted substantive rights between the parties, and urging the statute of that State precluding an insurance company from pleading, alleging, or proving the falsity of an application, when the same is not attached to the policy, relates only to matters.of procedure and remedy, and that the courts of Iowa have so construed such statutes. Neither time nor propriety permits this court to unduly extend its opinions in a detailed discussion of all the various legal questions involved in a ease, yet a clear and concise statement of facts and the rules or principles of laiv applied thereto, is always desired. The insistence of appellant that the law of Iowa relates only to form and procedure and creates no substantive rights has prompted a further statement and discussion of the rule as applied by this court in the disposition of this case. The distinction between the right of an insurer to set up a defense upon a provision contained in the policy itself, and the right to set up a defense based upon an alleged fraudulent representation claimed to have been made in the application, when such is not attached to the policy, must not be confused. The former rule is clearly expressed in the case of Washington Fidelity Nat. Ins. Co. v. Burton, 287 U. S. 97, 77 L. Ed. 196, 87 A. L. R. 191 (with annotations, p. 194); and the latter, in the case of John Hancock Mut. Life Ins. Co. v. Yates (U. S. Supreme Court, L. Ed., Adv. Op. Vol. 81, No. 3, p. 110). These two cases clearly distinguish between defenses based upon a condition contained in the policy, and one sought to be interposed, based upon a fraudulent representation claimed to have been made in an application therefor, when such application was not attached to the policy, and the statutes of the State where the policy was sold prohibit the interposing of such defense. An omission to attach the application to the policy contract, “while not invalidating the policy shall serve to preclude the insurance company from pleading, alleging, or proving such application or representations or the falsity thereof.” Rauen v. Prudential Ins. Co. (1906), 129 Iowa 725, 729. The court further states on p. 731, that when the application is not attached, “the policy should be treated, construed, and enforced as if no written application had been made.” Ag’ain on p. 735, it is said: “The denial of the rig’ht to plead or prove such extrinsic matter, is not in any proper sense a ‘penalty’ for failing to comply with the statute, for the company has a perfect right to waive or forego any advantage it could derive from an embodiment of the application in the policy. It issues its policy with the statute in view, and, failing to do that which by the terms of the statute is necessary to allow the application to have any ‘bearing’ on the rights of the parties, the contract stands as if the omitted writing’s never existed. ’ ’ It is further held in Dixon v. Northwestern Nat. Life Ins Co. (1920), 189 Iowa 1268, 179 N. W. 885, that in soliciting insurance in Iowa, from a resident of said State, and in delivering the policy to the insured in Iowa, the company was doing business in said State within the meaning of the statute, and that its failure to attach a copy of the application to the policy exposed it to the same restrictions in pleading and proving its defenses as would be applicable were the insurer an Iowa corporation. The court holding in that case that no foreign insurance company could lawfully do business in Iowa except with the consent of that State, and when doing such business, such company was bound by the same rule and limitations which the statute of the State prescribed for home companies engaged in like or similar business. At p. 888 (179 N. W.), the court used the following language: “The appellant seeks by its answer and so called counter-claim to avoid every restriction found in this statute, and proposes, notwithstanding the law forbidding it, to allege, plead, and prove, not only the existence of such application, but to allege, plead, and prove its falsity, and because thereof to escape performance of its contract. We are not concerned at this point with the wisdom or abstract justice of the provision. Its validity is unquestionable. As has been said by this court on other occasions: ‘Foreign insurance companies are not compelled to do business in this state. If they voluntarily choose to do so, however, they must submit to such conditions and restrictions as the legislature may see fit to impose.’ (Nelson v. Insurance Company, 110 Iowa 604, 81 N. W. 808.) The requirement that their policies shall have copies of the applications therefor attached or endorsed thereon, is not a burdensome one, and, if they fail to observe such simple regulation, they cannot justly complain of the consequences which the statute attaches to such neg- • lect. ’ ’ It is stated in our opinion that the application was not attached to the policy, and that under such circumstances the statute of Iowa prohibited the interposing of any defense based upon alleged false representations made therein. It was held that the appellant was thereby precluded from making such defense. It was further pointed out that so far as the body of the policy itself is concerned, it restricts the assured in the operation of his trucks, only to the limits of the United States and Canada. An exhaustive review of some thirty or more Iowa cases upon the question here involved will be found in 93 A. L. E. at pp. 383 and 384. An examination of those cases clearly discloses that under the Iowa statute, appellant was required to attach to or indorse upon the policy, a true copy of the application therefor as made by the assured, and that its failure so to do forever precluded it from pleading, alleging, or proving the falsity of such application or any representation made therein, as a defense to any action under the policy, and that this has been the consistent holding of the courts of that State. The petition for rehearing is therefore denied. Petition for rehearing denied.