Suit was brought and judgment obtained by appellee as plaintiff upon a life insurance policy issued upon the life of her brother, Albert Green. The policy contains the following provisions: "(3) . . . Except as herein provided, if the insured is not alive or is not in sound health on the date hereof . . . the Company's full liability shall be discharged by the payment of the sum of the premiums received hereunder. (4) This policy contains the entire agreement between the Company and all parties in interest . . ."
To the declaration the defendant pleaded the general issue and made tender of the premiums paid with interest thereon. It filed also notice of special affirmative matter to the effect that insured was not in sound health at the time the policy was delivered but was suffering from tuberculosis, wherefore no obligation was assumed under the policy except as to return of premiums paid. Counter notice was filed by plaintiff denying that insured was of unsound health when the policy was issued and further "that the defendant is now estopped to make such defense because it delivered the policy of insurance to the deceased, and whatever right it had by reason of the *Page 592 condition of the health of the deceased was waived by the delivery of the policy."
Brief for appellant discloses that the counter notice was based upon Code 1930, Section 5174, which is as follows: "All life insurance companies doing business in the state of Mississippi shall deliver to the insured with the policy, certificate or contract of insurance in any form a copy of the insured's application, and in default thereof said life insurance company shall not be permitted in any court of this state to deny that any of the statements in said application are true."
Insured's application for the insurance was introduced in evidence and it shows that the applicant represented that he was in sound health and that he had never had tuberculosis. Upon the issue as to the truth of these allegations there was considerable testimony. On behalf of the plaintiff the trial court instructed the jury that if the insured was not at the time the policy was issued, and for many months prior thereto, suffering from tuberculosis they should find for the plaintiff. However, the following instruction No. 3 was also given for plaintiff: "The Court instructs the jury for the plaintiff that if they believe from a preponderance of the evidence in this case that no medical examination was required in the writing of the policy of insurance in question on the life of Albert Green, and that the insurance was written by the defendant upon the recommendation of their agent, C.W. Campbell; and if they further believe from the evidence that the agent for the defendant, C.W. Campbell, had opportunity to observe the physical condition and the health condition of the insured, and further took his application for the insurance, and in good faith, after observing the insured, Albert Green, and after receiving answer to the questions propounded to the said Albert Green, believed the said Albert Green was a fit subject for insurance and recommended that the defendant issue a policy to him, and if the jury further believe that at the time the said policy was issued and *Page 593 delivered by the agent for the defendant to the said Albert Green, that the said agent of the defendant had opportunity to observe the physical condition and health of the said Albert Green, and in good faith believing him to be in good and sound health, delivered said policy to him; and if they further believe that the said Albert Green did not knowingly make any false representations to the said agent in procuring said insurance, and that he was acting in good faith in procuring said insurance, then and in such event it is the duty of the jury to find for the plaintiff, and your verdict should be `We, the jury, find for the plaintiff.'" It is true that the defendant in order to meet the theory of this instruction was allowed a charge involving the bad faith of the applicant, yet a party may not be estopped to assert a correct theory because he has been compelled to take defensive measures in kind against one which is erroneous.
The following instruction No. 2 requested by the defendant was refused: "The Court instructs the jury for the defendant that if you believe by a preponderance of the evidence in this case that Albert Green, at the time of the issuance of the policy, was not in sound health and was suffering from a disease tending materially to shorten his life, then it is your sworn duty to return a verdict for the defendant."
In view of Code 1930, Section 5174, above quoted, the defendant was estopped to deny that any of the statements in the application were true. However, it did not ground its defense upon the falsity of the representation in the application but upon the express provision in the policy itself set out above. That it was entitled so to do is clearly shown in Metropolitan Life Ins. Co. v. Scott, 160 Miss. 537, 134 So. 159, 161, where it was held that "One evident purpose of the statute requiring the delivery to the insured of a copy of the application is to exclude or eliminate from the contract an application, a copy of which is not delivered to the insured with the policy, and to render ineffective any defenses or attempted *Page 594 defenses based upon anything contained in such application, but it does not follow that a failure to incorporate in or attach to the policy a copy of the application will preclude the company from relying on any defenses available to it under the terms of the policy. In the policy here involved there is no language or provision indicating a purpose or attempt on the part of the appellant company to make anything found in the application a part of the contract. The policy was complete in itself, and purports to contain in plain language all the terms, conditions, and stipulations of the contract, and we do not think the company is precluded from relying on the express conditions and stipulations appearing on the face of the policy, by reason of the fact that the application contained representations or stipulations in reference to the same subject-matter. When the company chose to ignore the statements and representations appearing in the application, and incorporated in the policy in plain terms the conditions and stipulations upon which its validity should rest, and the policy was accepted by the insured as constituting a contract, it had the right to make any defenses it might have under the terms of the policy, without reference to such application."
This brings us to a consideration of the effect of the policy proviso that if the insured is not in sound health on the date of the policy the full liability of the company will be discharged by payment of the sum of premiums received. It is not helpful to discuss whether this provision is in the nature of a warranty, Cooley's Briefs on Insurance, vol. 4, p. 3007, or a condition precedent, Couch, Cyclopedia of Ins. Law, vol. 4, p. 2833. In any event, it is a provision which effectively limits recovery under the policy and is part of the contract between the parties. Such is its language and import and we are impotent to impair its literal effect by invoking rules of construction available only to resolve ambiguity. Even though it be placed in the contract for the benefit of the insurer, it is binding upon the insured. The issue is not *Page 595 fraud of the applicant, but breach of the condition. Such a limitation upon the liability of the defendant is a proper subject of contract, and is binding upon the insured. Mutual Life Ins. Co. v. Vaughan, 125 Miss. 369, 88 So. 11; National Life Acc. Ins. Co. v. Hugger, 158 Miss. 686, 131 So. 75. In the former case, the Court said [125 Miss. 369, 88 So. 13]: "The provision in the policy is that the proposed policy should not take effect unless the policy should have been delivered to, and received by, the insured during the continuance of good health. The question is then to be determined whether the applicant was in good health at that time." See, also, Co-operative Life Ass'n v. Leflore,53 Miss. 1, 16; New York Life Ins. Co. v. Gresham, 170 Miss. 211,154 So. 547; 37 C.J. pp. 400, 404; Couch, op. cit. supra.
The issue which should have been submitted to the jury by the instructions is not the good faith of the applicant or of the agent but whether there existed that condition — sound health — upon which the obligation of the defendant rested. 37 C.J., p. 400. It was error to give the third instruction for the plaintiff and to refuse the second instruction for the defendant.
Reversed and remanded.