I concur in an affirmance of the judgment.
The life insurance policy involved in this action was issued pursuant to an application dated August 31st, 1934, obtained by one Peter McIntyre, plaintiff's agent at Williston, North Dakota. The policy lapsed for nonpayment of premium due September 21st, 1935, and under date of October 30th, 1935, the cashier of plaintiff's branch office at Grand Forks, in this state, wrote the insured that the policy had "lapsed for the nonpayment of premium. The Company urges you on receipt of this letter to apply for the reinstatement of the policy. Please complete the application for reinstatement printed on the back and have your signature duly witnessed. . . . Apparently the insured *Page 396 took no action, and on November 30th, 1935, McIntyre, plaintiff's agent, who had solicited the application for the insurance policy, called on the insured and prepared and presented to him an application for reinstatement. Thereupon the application was signed by the insured, and it was thereafter transmitted to the plaintiff's branch office at Grand Forks, together with the required premium payment, and was approved on December 6th, 1935.
The insured again permitted the insurance to lapse for nonpayment of premium due March 21st, 1936, and under date of April 28th, 1936, the cashier of the branch office of the plaintiff at Grand Forks again notified the insured that the policy had lapsed for the nonpayment of premium, and urged him to apply for reinstatement in a letter identical in language with that sent under date of October 30th, 1935. Apparently the insured failed to take any action in the matter, and on May 23d 1936, McIntyre, the agent of the plaintiff, again called on the insured and prepared and presented for his signature an application for reinstatement. This application, together with the required payment, was transmitted to the branch office at Grand Forks and was approved on May 25th, 1936.
Upon the trial of this action the agent McIntyre was called by the defendant for examination, under § 7870, Comp. Laws 1913, as an agent of the plaintiff. Upon such examination he testified as follows:
"Q. What's your name, please?
"A. Peter McIntyre.
"Q. Where do you live?
"A. At 7 1/2 Main Street, Williston.
"Q. What business are you engaged in?
"A. I write life insurance.
"Q. For what Company?
"A. New York Life.
"Q. And did you have that position on November 30th, 1935?
"A. Yes, I have been continuously with them since 1921.
"Q. I show you Exhibit "5-A," and ask you if that is your signature, Peter McIntyre, written there?
"A. It is.
"Q. This is the signature of Verner Ridder Hansen over here? *Page 397
"A. It is.
"Q. And that Exhibit "A" was all prepared by you with the exception of the signature of Mr. Hansen?
"A. Yes, I usually make those out.
"Q. You made this one out?
"A. Yes.
"Q. Did you talk to Hansen and ask him to reinstate?
"A. I am not so sure about that.
"Q. You went to see him?
"A. Yes.
"Q. What did you say to him and what did he say?
"A. I asked him if he was going to reinstate and if he was in the same good health as he was when it was taken out. He said, `yes.'
"Q. You wrote it out and handed it to him and he signed it?
"A. Yes.
"Q. But you asked him that one question — whether he was in the same good health?
"A. Yes.
"Q. Applying to Exhibit "5-B," too?
"A. Well, as far as I remember.
"Q. You wrote this one, too? That is, Exhibit "5-B?"
"A. Yes.
"Q. As far as you remember now, you asked him if he was in the same good health, and he signed it?
"A. As close as I can get at it."
This constitutes all the testimony of this witness. (Exhibit "5-A" is the application for reinstatement dated November 30th, 1935, and Exhibit "5-B" is the application for reinstatement dated May 23d 1936.)
Subsequent to the second reinstatement the required premiums were paid and the policy kept in force.
On July 26th, 1937, the insured died from drowning while swimming with some friends in a lake near Williston. On August 6th, 1937, proofs of death were submitted, and under date of October 8th, 1937, plaintiff rejected the claim and advised the defendant that it had rescinded both reinstatements of the policy.
The trial court filed a memorandum decision wherein it was held: *Page 398
(1) "The plaintiff has failed to prove, by a fair preponderance of the evidence, that false representations or misrepresentations are contained in the answers" to any of the questions in the applications for reinstatement;
(2) If plaintiff has proven by a fair preponderance of the evidence that the answer to the question number 2 in each of the applications ("Within the past two years have you had any illnesses, diseases or bodily injuries or have you consulted or been treated by any physician or physicians?") was false, then such answer was inserted in each of the applications by the plaintiff's agent, McIntyre, at the time such applications were made out by him "notwithstanding the fact that the insured, Hansen, gave correct answers to the oral questions put to him by said agent; and that said McIntyre acted as plaintiff's agent, the insurer, and not as agent for Hansen, the insured; and that, upon such findings of fact, the court concludes that the plaintiff, as insurer, cannot take advantage of the false answer inserted by its agent, contrary to the facts as stated by the applicant, Hansen." That "the plaintiff's agent, Peter McIntyre, wrote the answer `no' without first reading the question to Mr. Hansen. Plaintiff's agent merely asked the insured if he was going to reinstate and if he was in the same good health as he was when the policy was taken out. The insured answered `yes,' and then the agent, McIntyre, filled in the blanks with his own handwriting and handed the application to the insured, Mr. Hansen, who then signed it." That "at the time that the insured, Hansen, signed the applications for reinstatement, and delivered them to agent, McIntyre, he was not even aware of the existence or substance of question number 2, and the negative answer thereto written in by agent, McIntyre."
The court made and filed formal findings of fact in accordance with the memorandum decision, and ordered that plaintiff's action be dismissed, and that defendant have judgment for the amount due on the policy.
In my opinion the findings and conclusions of the trial court are fully sustained by the record on this appeal. Plaintiff's cause of action is predicated upon certain misrepresentations alleged to have been made in the applications for reinstatement. The evidence shows beyond all doubt that these applications were solicited by the plaintiff, and that all answers to questions therein were written by plaintiff's agent. In *Page 399 soliciting such applications for reinstatement and in writing the applications and presenting the same to the insured, McIntyre acted as the agent of the plaintiff, insurance company. Comp. Laws 1913, § 6632; Lechler v. Montana L. Ins. Co. 48 N.D. 644, 186 NW 271; 2 Couch, Insurance, pp. 1309, 1528; 29 Am Jur p. 112, Insurance; Continental L. Ins. Co. v. Chamberlin, 132 U.S. 304, 33 L ed 341, 10 S Ct 87. In whatever he did in relation to the applications for reinstatement, McIntyre was the agent of the plaintiff "to all intents and purposes." In what he did he "was merely the arm" of the insurance company. Bekken v. Equitable Life Assur. Soc. 70 N.D. 122, 146, 293 N.W. 200, 214. In writing the applications, McIntyre did "what the company sent him out to do." He solicited the applications for the company, he asked questions, or refrained from asking questions, as the case might be, for the company, he wrote down answers and filled in the blanks in the applications for the company, and transmitted the applications for the company. Ibid. Any mistakes or representations made by the agent, McIntyre, in filling out the applications were not the mistakes or representations of the insured, Hansen, but the mistakes and representations of the insurance company. Continental L. Ins. Co. v. Chamberlin, supra; French v. State Farmers' Mut. Hail Ins. Co. 29 N.D. 426, 151 N.W. 7, LRA1915D, 766; 4 Couch, Insurance, pp. 2735 et seq.; 37 CJ 533.
McIntyre had been plaintiff's agent at Williston since 1921. The insured was a resident of Williston. In 1934 McIntyre solicited the application for the policy. In 1935 he went to see the insured and solicited the application for reinstatement, and in 1936 he again went to see him and solicited another application for reinstatement. The applications were written out by McIntyre. The insured was a laborer. It does not appear whether he had any other insurance, or whether he had ever applied for any. So far as the policy in question here is concerned, his dealings were all with McIntyre. It was only natural that the insured should rely upon McIntyre, and that he should sign such papers as McIntyre might prepare and present to bring about a reinstatement of the policy. 4 Couch, Insurance, p. 2738.
McIntyre continued to act as plaintiff's agent and was such agent at *Page 400 the time of the trial of this action in November, 1939. Naturally he would not be an unfriendly witness to the plaintiff, and there is no claim that he was. McIntyre was the only person who knew what took place when the applications for reinstatement were signed. He was present at the trial, but the plaintiff did not choose to call him as a witness. After plaintiff had rested, and while the defendant was presenting her proofs, McIntyre was called by the defendant as a witness, under the provisions of § 7870, Comp. Laws 1913, which provides for the examination, "as if under cross-examination" of an adverse party in a civil action or proceeding, and when the adverse party is a corporation, or an officer or managing agent of such corporation. The testimony given by McIntyre upon such examination is set forth in full above. It speaks for itself. According thereto, McIntyre went to see the insured about the insurance poilcy. He asked the insured "if he was going to reinstate and if he was in the same good health as he was when it was taken out." There is not even a suggestion or intimation that any other or further question was asked. Upon receiving an affirmative answer to his question, McIntyre wrote out the application for "reinstatement and handed it to the insured, and he signed it." This, according to McIntyre's testimony, is what occurred. The plaintiff did not deem it to be to its interest to call McIntyre to amplify or explain anything he had said. It must be presumed there was nothing he could say, either in addition to or in explanation of the testimony he had given, that would be favorable to the plaintiff. 22 CJ pp. 115 et seq.; 1 Jones, Commentaries on Evidence, 2d ed. p. 156; 9 Enc. of Evidence, pp. 965 et seq.; 20 Am Jur p. 192, Evidence.
Omission to call or interrogate an available witness, especially if the witness possesses peculiar knowledge, and would naturally be friendly to the party's contention, "raises a strong presumption that the testimony, if elicited, would be unfavorable" to the party who fails to call or interrogate such witness. 22 CJ pp. 115 et seq.; 1 Jones, Commentaries on Evidence, 2d ed. p. 156; 9 Enc. of Evidence, pp. 965 et seq.; 20 Am Jur p. 192, Evidence.
"The scope of the rule is illustrated by the fact that it applies even to failure to combat adverse inferences. Where evidence has been *Page 401 introduced affording legitimate inferences going to establish the ultimate fact that the evidence is designed to prove, and the party to be affected by the proof, with an opportunity to do so, fails to deny or explain such facts, they may well be taken as admitted with all the effect afforded by the inferences." 1 Jones, Commentaries on Evidence, 2d ed. pp. 156, 157.
The findings of the trial court as to what occurred at the times the two applications for reinstatement were signed by the insured, and the conclusion drawn by the trial court that the answers to question number 2 in each of the applications for reinstatement were not made by the insured but were in fact made by plaintiff's agent, are in accord with the testimony of McIntyre.
Inasmuch as the alleged false statements in the applications for reinstatement were made by plaintiff's agent, and not by the insured, it is unnecessary to consider what the consequences would have been if the statements had been made by the insured. But even if the statements were made by the insured (as the majority opinion assumes), the judgment should be affirmed. The plaintiff had the burden of proof. 9 CJ p. 1252; 9 Am Jur p. 400, Cancelation of Instruments; 32 CJ p. 1269. It required clear and convincing evidence to sustain such burden.
For "to justify the cancellation of insurance contracts for fraud and mistake in a court of equity, the evidence thereof must be so clear, cogent, and convincing as to leave no room for reasonable doubt in the conscience of the court." 32 CJ p. 1269.
It was incumbent upon the plaintiff to prove not only that the alleged representations were made, and that they were false, but that the insured made the representations "with actual intent to deceive," or that "the matter misrepresented increased the risk of loss." Comp. Laws 1913, § 6501.
The plaintiff chose to avail itself of the provisions of the laws of this state, which permit the testimony of a witness to be taken, and presented upon the trial, by deposition. The insured died on July 26th, 1937. The plaintiff rejected defendant's claim for loss on October 8th, 1937, on the very grounds which form the basis for this action to cancel the policy. This action was instituted in November, 1937. The *Page 402 deposition of Dr. Shelden (referred to in both the majority and in the dissenting opinion) was taken at Rochester, Minnesota, on April 15th, 1938. This action was tried on November 27th, 1939, — more than nineteen months after the deposition had been taken. The deposition was not taken under a commission, upon written interrogatories. Comp. Laws 1913, § 7894. It was taken under statutory provisions, authorizing a deposition to be taken pursuant to notice to the adverse party without the use of written interrogatories. Comp. Laws 1913, § 7895. At the taking of the deposition defendant made no appearance either in person or by counsel. Consequently, the examination was in no manner impeded by objections on the part of the defendant to any questions asked, or proceedings had.
No exceptions were filed to the deposition (Comp. Laws 1913, § 7906), and it was received in evidence in its entirety. In fact, all evidence offered by the plaintiff upon the trial was received.
Dr. Shelden testified that he was connected with the Mayo Clinic as a Junior Surgeon; that he had been connected with the Clinic since 1933, and that in 1935 he was First Assistant in Neurological Surgery, but that he was not licensed to practice medicine and surgery in Minnesota until 1936, and that he had not been licensed to practice in any other State prior to that time. He testified that he saw the insured daily from August 26th to August 30th, 1935. He further testified that his testimony to that effect was obtained from the records of the Clinic and that he had no independent recollection of seeing the insured on any particular dates. He also testified that the insured had a general examination in the Clinic in 1935 and that during his stay from August 26th to August 30th, 1935, he had an examination in the Department of Neurology but that he (Dr. Shelden) did not conduct the examination. When asked, "Did you see him prior to August 26, 1935, and in the year 1935?" Dr. Shelden answered: "Not as far as I can determine from the records."
Reference is made in both the majority and in the dissenting opinion to the testimony of Dr. Shelden, and his refusal to answer certain questions.
Dr. Shelden declined to answer two questions on the ground that they called for information received by him as a physician, and that *Page 403 consequently he was prohibited by the laws of Minnesota from disclosing the same. The first question inquired as to his diagnosis of the condition which the insured complained about when he came to the Clinic in June and August, 1935; and the second question inquired as to whether the condition in which the insured was found to be upon these examinations was a serious condition as opposed to one of trivial or passing character. Immediately preceding these questions Dr. Shelden testified as follows:
"Q. From the records that you have before you are you able to say whether the visit to the Clinic in August, 1935 was for the same sickness, ailment or bodily injury as occasioned the visit of June 4th, — or May 31, 1935?
"A. As to that I don't believe I could answer. I don't recall.
"Q. From the records can you tell?
"A. I can't tell from the records exactly what occasioned him to consult us on the two different occasions.
"Q. Will you say, Doctor, that the occasion for the visit in August, '35 was not for the same bodily condition or complaint that the patient came to see you for or about in June of 1935?
"A. I don't believe I could answer that question. I have a record only of the findings. I haven't any record of his psychic or mental condition. I do not know exactly what he consulted us for on the two different occasions.
"Q. Well, you have your history before you there.
"A. Yes, I have the history that he gave us but I can't answer your questions with regard to what reasons he had for coming.
"Q. Well, is there a connection between the ailment or condition for which he consulted you in June, 1935 and the ailment or condition for which he consulted you in August, 1935?
"A. I would say that his symptoms might suggest that there was some continuation in August of the symptoms which were present prior to that time.
"Q. Isn't it a fact, Doctor, that it was for the same condition?
"A. I can say that a similar diagnosis was made on the two occasions."
It will be noted that Dr. Shelden had nothing to do with the insured, *Page 404 and did not see him at all, the time he came to the Clinic in June, nor did he make an examination of the insured at any time. Whether he made a diagnosis in August or whether the diagnosis was made by someone else, and what the diagnosis was, are matters which the testimony does not disclose. The plaintiff did not see fit to call any other person connected with the Clinic or to produce any other testimony having any relation to the condition of the insured at that time, with the single exception that the plaintiff called the defendant for examination as an adverse party. In response to leading questions she testified that her husband went to the Mayo Clinic at Rochester the last of May or the first of June "to see about his eyes" — "one eye," and that before that time he had had some spells of dizziness. She testified that in August he went to Minneapolis to see his aunt and uncle and that she did not know whether he went to Rochester at that time. She stated that her husband had not complained about any other ailment or affliction. The employer of the insured testified that the insured was employed by him from the spring of 1932 until the time that he died; that during all that period he did not lose any time on account of sickness; that he worked continuously with the single exception of a short time that he was away on a trip. Two men who worked with the insured in the bakery also testified. Their testimony, — which is undisputed, — shows that on the day that the insured died he worked in the bakery until about 5 o'clock in the afternon when he and the two coemployees went to a lake or pond some three miles from town to swim.
The insured dived into the pond from a springboard. The two men who came with him had already entered the pond. They saw him dive and later saw him swimming. They were not aware of any trouble until a woman told them that she had seen "the man who came with them go down." The evidence does not show how long time elapsed before the body of the insured was found and removed from the pond; but it does show that efforts were made to resuscitate. The certificate of death, which was offered in evidence by the plaintiff, states that the cause of death was drowning; and no contributory cause of death is stated in the space provided in the certificate for listing such causes. The evidence adduced by the plaintiff as to the state of health of the insured at the time he was examined at the Mayo Clinic in 1935, the *Page 405 reasons for his going to the Clinic, and the state of his health subsequent thereto, sums to this: — The insured went to the Mayo Clinic in the latter part of May or the early part of June 1935, to see about his eyes, or one eye; before going to the Clinic he had had some "spells of dizziness;" how long he had been subject to these spells, their frequency, duration and the circumstances under which they might arise, is not disclosed. Whether the insured had any refractory defect such as near-sightedness or astigmatism, the evidence does not show. In August, 1935, the insured again went to the Clinic. Since 1932 up to the time he went down in May or June he worked at his trade continuously. After he came back from his first trip to the Clinic he again went to work and worked at his trade. After he came back in August, 1935, he worked at his trade continuously up to, and including, the day that he died from drowning. Williston is a city having a population of less than 5,800. The insured had lived and worked there continuously since 1932. Not a single witness was produced to show that there was anything to indicate that the insured was not in perfect health. The spells of dizziness and the fact that he deemed it necessary to go to a clinic about his eyes does not evidence the existence of any serious or chronic ailment tending to increase the risk of loss under a life insurance policy. According to recognized medical authorities, spells of dizziness may result from eye strain, near-sightedness or astigmatism. One of the recognized authorities in ophthalmology says that sensations, "varying from a sense of insecurity and bewilderment to nausea and dizziness, or even actual vomiting and falling . . . may result fromblurring and distortion due to refractive errors, especially astigmatism;" that "like feelings may result from misjudgment ofposition or distance" and follow "in some degree, upon every change of lenses." The Eye and Its Diseases, by Dr. Berens, pp. 147, 148.
There is deficiency in plaintiff's proof in another respect. The first application for reinstatement was dated November 30th, 1935, and approved December 6th, 1935, and the second application for reinstatement was dated May 23d 1936, and approved May 25th, 1936. The communication from the plaintiff notifying the defendant that plaintiff had elected to rescind the reinstatements was dated October 8th, 1937. More than sixteen months intervened between the approval *Page 406 of the second application for reinstatement and the declared intention of the plaintiff to rescind. The right to rescind a contract on the ground of fraud must be exercised by the party possessing the right "promptly upon discovering the facts which entitle him to rescind, if he is free from duress, menace, undue influence or disability and is aware of his right to rescind." Comp. Laws 1913, § 5936; 2 Black, Rescission and Cancellation, 2d ed. pp. 1316 et seq. And where an action to rescind and cancel a contract on the ground of fraud is brought a considerable time after the alleged fraudulent representations were made, the plaintiff is required to show that the suit was brought within a reasonable time after the discovery of the fraud. 12 CJS p. 1045; 9 CJ p. 1244, § 175; 18 Enc Pl Pr pp. 825 et seq. The plaintiff recognized that in this case it was incumbent upon it to plead and prove that it acted promptly on the discovery of the alleged fraud. In its complaint the plaintiff alleged "that immediately upon the discovery of said misrepresentations in said applications, to wit: on the 8th day of October, 1937, the plaintiff notified said defendant in writing that it elected to rescind and cancel and did thereby rescind and cancel said reinstatements of said policy." But the allegation was not proven. Plaintiff failed to introduce any evidence whatever tending to establish it. So far as the evidence in this case shows, the plaintiff discovered and had full knowledge of every fact, which it claims entitles it to rescind the reinstatements and to have the same cancelled, shortly after, or even before, the reinstatements were approved.
The plaintiff invoked the equitable jurisdiction of the court to cancel the insurance policy. The defendant joined issue, and asked that plaintiff be denied the relief it seeks in the action; that the policy be not cancelled, and that she have judgment for the amount due on the policy. The plaintiff having failed to show that the policy should be cancelled, it continued in full force, and the defendant was entitled to judgment as demanded in her pleading — for the death of the insured, and the presentation of due proof of such death were established by undisputed proof. The plaintiff having brought the defendant into equity by suit to cancel the policy, and having failed to establish facts entitling it to cancelation, cannot be heard to question the jurisdiction of the court to render judgment for the amount due on the policy. Zollman *Page 407 v. Jackson Trust Sav. Bank, 238 Ill. 290, 87 N.E. 297, 32 LRA(NS) 858; 9 Am Jur p. 399, Cancelation of Instruments; 21 CJ pp. 137 et seq.; CJS p. 1097.
"Equity having once acquired jurisdiction and having before it the proper parties and the subject matter to enable it to do complete justice between them, will not relegate the defendant to the necessity of relitigating his rights at law." 9 Am Jur p. 399, Cancelation of Instruments. See also Zollman v. Jackson Trust Sav. Bank, supra; French v. State Farmers' Mut. Hail Ins. Co. 29 N.D. 426, 438, 151 N.W. 7, 10; 1 Pomeroy, Eq. Jur. §§ 231-242.