Louis v. Connecticut Mutual Life Insurance

Rumsey, J.:

■ The action was brought to recover upon a policy of insurance issued on the 20th of June, 1895, upon the life of Joseph H. Louis, the husband of the plaintiff, for her benefit. The application was made a part of the policy, The policy contained a provision that the. company did not assume the risk of self-destruction, except upon satisfactory proof that the insured was so far insane as to destroy his, responsibility therefor, and in case of death for that cause the policy should become null and void. It was alleged in the answer that the policy was void because the death of Louis, which took place on the 16th of April, 1896, was caused by suicide. Proof was given by each party as to that fact, and it was submitted to the jury, who found a verdict in favor of the plaintiff in answer to a question.

The death of Louis took place in the city of Philadelphia. A coroner’s inquest was held upon his body, the result of which was a finding that his death was caused by suicide from some unknown poison. The papers and proceedings upon that inquest were offered in evidence, but they were excluded, and one of the questions presented is as to the correctness of the rulings excluding them. .The inquest was taken in the State of Pennsylvania. The proceedings were sent by the counsel for the plaintiff to the insurance company upon its request after the proofs of loss had been- forwarded .and received. It is claimed that- they are competent because they were forwarded as part of the proofs of loss. It is quite evident, however, that that is not so. The proofs of loss as forwarded were complete before the inquest was asked for, and when the papers upon the inquest were asked for they were sent to the company by the plaintiff’s counsel purely as a matter of accommodation. They were no part of the proofs of loss and could not be received as such, and if they had been the facts that appeared in them would not have been competent evidence except perhaps of the fact that a coroner’s inquest had been had. But the findings of the inquest were not competent evidence in this easel It was res inter alios acta. The plaintiff was not a party to the proceedings and had nothing to do with the inquest before the coroner’s jury, and for that reason, if for no other, they were incompetent and could not be received. In the case of Goldschmidt v. Mutual Life Ins. Co. (102 N. Y. 486) there is a discussion of the question whether such proceedings were competent evidence as against the insured, and the court came to the conclusion that they are not. The argument in that case is complete, and the question does not call for further consideration. (Buffalo Loan, Trust & Safe Deposit Co. v. K. T. & M. M. A. Assn., 126 N. Y. 450.)

Among the large number of questions in the application presented to Louis, was the following: “ 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 ? ” to which the answer was “No.” It is alleged that the answer to this question was false, and that if the true answer had been given to it the defendant would not have issued the policy to Louis, and that the false answer was a suppression of a material fact which rendered the policy void.

The facts were as follows : It was discovered in the early part of 1893 that Louis had been engaged in systematic larceny from his employers, and had attempted to conceal that fact by forgeries. When the discovery was made, Louis made a determined and almost successful attempt to commit suicide. As a result of that attempt he was found unconscious. A physician was called, and after considerable effort he was restored to consciousness. These facts were not disputed upon the trial. There appeared, however, in the application a series of questions marked 9 asking for information as to when he had consulted with, or been attended by, a physician or surgeon during the ten years before the application was made, and the names and residences of these physicians, to which he answered that he had been attended for only trivial complaints, and in answer to the question for the names of the physicians he said he had no use for one. It is not disputed that these answers were false because he had been attended by a physician at the time of his attempted suicide, but no defense based upon those false answers was set up„ The learned counsel for the defendant insists, however, that the jury-should have been charged that the falsity of those answers should be" considered by them with the falsity of the answer to -question No. 11 above, and that as a result it was necessary to say, as a matter of law, that the answer to No. 11 being false was a breach of the warranty contained in the application, and that for that reason the policy was void.

It is quite true that the answers to the series of questions marked 9 were matters for the consideration of the jury, and the court so-charged at the request of the defendant, but although those answers-were false, yet it cannot be inferred for that reason, as insisted by the-appellant’s counsel, that there was a breach of the warranty in the-answer to question No. 11, and that, therefore, as a matter of law, the-policy was void. The question presented is not what was the effect, upon the policy of the answers to question 9, because no claim of the-invalidity of the policy because of those answers was set up. The-only question which can be considered here is whether the answer to question No. 11 was false in such a sense that it made the policy invalid.

Warranties in policies of insurance must be strictly construed and are never to be extended to include anything not necessarily implied in their terms. (Dilleber v. Home Life Ins. Co., 69 N. Y. 256.) W hileit is true that by the express terms of this policy the answers in the application are made warranties, yet under the rule declared in the case-just cited when it is sought to make a warranty of the answer to question 11, we must examine the question to see just exactly what it. was that Louis said when he made the answer He was not asked, for any fact. He was simply asked whether there was any fact not stated in the answers to the previous questions with which the company should be made acquainted. That called only for his opinion,. and construing tne question as a warranty the only effect that should he given to it is that in his opinion he thought there was no such fact. If, therefore, his notion upon that subject was correct, and lie believed that there was nothing in his history not told in the previous answers which was material for the company to know, then so far as that answer was concerned the warranty was fulfilled. But a question of this kind calling for the opinion of the insured is to be construed not as a warranty but as a representation. (Ames v. Manhattan Life Ins. Co., 40 App. Div. 465 ; Dilleber v. Home life Ins. Co., supra ; Moulor v. American Life Ins. Co., 111 U. S. 335.) Within the rule laid down in these cases it must be held that this answer was a representation and not a warranty. When one is asked as to a fact the truth of which is not by the terms of the policy made a warranty, the policy will not be avoided although that fact be untruthfully stated, unless that fact is material, and the question of its materiality in such a case is always to be determined by the jury. (Boehm v. Commercial Alliance Life Ins. Co., 9 Misc. Rep. 529, 538 ; affd., 86 Hun, 617.)

But it is not sufficient in all cases that the representations should be false and should be material to avoid the policy. If the insured is asked directly for a fact and he answers falsely, then undoubtedly the policy would be void if the fact was material whether the insured made his false answer innocently or not. But when it is left to the insured to decide whether the fact asked for is one which is material, as is the case here, then although that fact may be material a false answer is not sufficient to avoid the policy unless in addition it is made to appear that the materiality is known to the insured. This question was expressly decided in the case of Mallory v. Travelers’ Ins. Co. (47 N. Y. 52). The learned justice so instructed the jury, but he also said to them that it was for them to say whether the answer to the 11th interrogatory was honestly given by Louis, or whether it was answered in the way it was with the intent of concealing from the insurance company the fact that he had attempted to commit suicide. In that charge we think there was no error. The question for Louis was whether in his judgment the fact asked for was one which the company ought to have known. All that he was called upon to do was to determine that question fairly and honestly. It he did that, then although he came to a wrong conclusion the policy is still valid, and that is the point determined in Mallory v. Travelers' Ins. Co. (supra).

Either he honestly thought that the fact of his attempted suicide was not' material, or, thinking that it was material, he concealed it with the intent that the company should know nothing about it. If, thinking that it was material, he concealed it for that purpose, then that was a fraudulent concealment, because his purpose was to keep back from the company something which was material for it to know, so that he could obtain this policy which otherwise would not have been issued to him. That clearly constitutes fraud, and any act done for any such reason is fraudulent, and, therefore, when the court said that it was for the jury to say whether he answered in the way he did with the fraudulent purpose of concealing the fact from the company in order that lie might obtain the policy, the charge was correct and no exception could properly be taken to it.

In the case of Penn Mutual Life Ins. Co. v. Mechanics' Savings Bank (37 U. S. App. 692) it was said by the court that where the applicant has fully and. truthfully answered all the questions asking for facts, he may rightly assume that the range of the examination has covered all matters within ordinary human experience deemed material by the insurer, and that he is not required to rack his memory for circumstances of possible materiality, not inquired about, and to volunteer them. He can only be said to fail in his duty to the insurer when he withholds from him some fact which, though not made the subject of inquiry, he nevertheless believes to be material to the risk and which actually is so, for fear it would induce a rejection of the risk, or, what is the same thing, with fraudulent intent. In that' case the question was whether the ■insured had withheld any circumstance or information touching his past or present state of health and habits of life, with which the company ought to be made acquainted. He answered “Ño,” and the question being presented whether that was a misrepresentation, the court held that the only duty imposed upon the insurer was that he should not suppress the truth in bad faith with the intent to deceive. Other cases are cited, and the conclusion reached is so manifestly in accordance with good sense that it needs no citation of authorities to support it.

Upon the question of the materiality of the attempt to commit suicide, the defendant offered the testimony of its vice-president, who was shown to be acquainted with the customs and usages of insurance companies. He was ■ asked whether there was any custom, practice or usage among life insurance companies with regard to accepting applications for life insurance by parties who had attempted suicide, or whether, if that fact was made to appear, the risk would be refused, and what was the custom of life insurance companies in 1895 and before that time with respect to issuing policies on the lives of persons who were known to have attempted suicide, and whether the defendant would have issued this policy had that fact been made known to it, and whether that fact would have been deemed material in passing upon the application. All these questions were objected to and all were excluded. As to the last two, the courts seem to be unanimous that such evidence is incompetent and no discussion with respect to them is required.

But in respect of the questions as to what was the usage and custom among insurance companies, there is more doubt. In the case of Penn Mutual Life Ins. Co. v. Mechanics' Savings Bank (supra) it was held after a full consideration that testimony of that kind was competent and material. It was conceded, however, by the learned judge who gave the opinion in that case that in many of the States that testimony would not be received. Without discussing the question which was thoroughly considered by Judge Tatt, it is sufficient for us to say that the rule in this State seems to have been settled, that testimony of that kind is not competent, in the case of Rawls v. American Mutual Life Ins. Co. (27 N. Y. 282). In that case the defense was that the plaintiff had concealed the fact that the insured was a man of licentious, intemperate and disorderly passions. It was sought to be proved by experts in the business of life' insurance that a person who habitually indulged in intoxicating drink would not be regarded by insurers as an insurable subject. That evidence was excluded. We see no difference in principle between the question decided in that case and these asked here, and upon that authority it must be held that the ruling of the court in excluding this testimony was correct.

The learned justice submitted to the jury the question whether Louis on the 4th of December, 1893, made an attempt to commit suicide, which was answered in the affirmative as it must have been in view of the evidence. That answer having been received, a motion was made by the defendant’s counsel that the court direct a verdict for the defendant upon the ground that that being a material fact and. it not having been stated in the application, the policy was void.,.- It must be remembered in discussing this point that no question was raised as to the voidability of the policy because of the answers to the series of questions marked 9. No issue was raised as to those questions, and this point can only be presented as bearing upon the invalidity urged in the answer which is that arising from the false answer to question 11. As we have already seen, the fact that Louis attempted to commit suicide, although it may have been material, would not avoid this policy, and for that reason the court was correct in denying the motion to direct a judgment in favor of the defendant because of the existence of that fact.

The only other question presented is as to the order denying the motion of the defendant to amend its answer. It is quite evident that that motion was made to enable the defendant to have the affirmative of the issue, which it had lost by denying certain facts set up in the complaint. Whether the court should grant the motion for that purpose was, a matter which was purely within its discretion, and while undoubtedly the question of the exercise of its discretion by the trial court is always reviewable- in this court, yet we see no reason to reverse the order which the learned justice made in his discretion with respect to this matter.- The same thing may be said with respect to the application of the defendant to amend the answer by .setting up the fact that the policy was invalid because of the false .answers to the series of questions marked 9. That amendment was one of very considerable • importance. The evidence which had been admitted bearing upon that matter was complete upon the issue raised by the allegations with respect to question 11, and whether the circumstances were such that the court should grant the amendment was a matter purely for its own judgment, and we cannot say that the discretion of the court as to that matter either was .abused.

For these reasons the judgment and order must be affirmed, -with, costs to the respondent.-. . ' .

Van Brunt, P. J., O’Bríen and Hatch, JJ., concurred; Ingraham, J., dissented.