Dwight v. Germania Life Ins. Co.

• Decision Date: 12 October 1886
• Citation: 103 N.Y. 341,8 N.E. 654
• Parties: DWIGHT and others, Ex'rs, etc., v. GERMANIA LIFE INS. Co.
• Court: New York Court of Appeals Court of Appeals

103 N.Y. 341

8 N.E. 654

DWIGHT and others, Ex'rs, etc.,

v.GERMANIA LIFE INS. Co.

Court of Appeals of New York.

October 12, 1886.

Appeal from judgment and order of supreme court, general term, affirming judgment and order denying defendant's motion for new trial. The complaint was upon a life insurance policy. The answer set up suicide and breach of warranty. Verdict for plaintiffs.

DANFORTH, J ., dissenting.

Joseph Larocque and Wm. M. Evarts, for appellant, Germania Life Ins. Co.

Isaac S. Newton, for respondents, Dwight and others, Ex'rs, etc.

RUGER, C. J.

At the close of the evidence on the trial the defendant moved for a dismissal of the complaint upon the ground, among others, that the uncontradicted evidence showed that the answers made by the assured to certain questions in the application for insurance were false and untrue, and constituted a breach of warranty which avoided the contract. The trial court denied the motion, and the defendant excepted. A furtther motion was thereupon made for the direction of a verdict in favor of the defendant, upon the same grounds, which were also denied by the court, and an exception was taken thereto. The main question in the case which we shall discuss arose over the validity of these exceptions.

It was assumed, both by the trial court and by the general term, that by the terms of the policy the assured warranted the truth of the several answers referred to, and that, therefore, compliance with such warranty was a condition of the validity of the contract of insurance. This determination of the courts below was peoperly acquiesced in by the counsel for the respondents upon the arguments before us, as it could not have been successfully questioned. It must therefore be assumed, in the further consideration of this case, that any substantial deviation from the truth in the answers so given was material to the risk, and constituted a breach of the terms of the contract, rendering the policy based upon such answers void. Armour v. Transatlantic Fire Ins. Co., 90 N. Y. 450.

Parties to an insurance contract have the right to insert such lawful stipulations and conditions therein as they may mutually agree upon, or which they may consider necessary and proper to protect their interests, and which, when made, must be construed and enforced, like all other contracts, according to the expressed understanding and intent of the parties making them. If an insurance policy, in plain and unambiguous language, makes the observance of an apparently immaterial requirement the condition of a valid contract, neither courts nor juries have the right to disregard it, or to construct, by implication or otherwise, a new contract in the place of that diliberately made by the parties. Appleby v. Astor Fire Ins. Co., 54 N. Y. 253;Foot v. AEtna Ins. Co., 61 N. Y. 571;Graham v. Fireman's Ins. Co., 87 N. Y. 69;Armour v. Transatlantic Fire Ins. co., supra.

Such contracts are open to construction, like all other contracts needing interpretation, but are subject to it only when, upon the face of the instrument, it appears that its meaning is doubtful, or its language ambiguous or uncertain. May, Ins. 172. An elementary writer says: ‘Indeed, the very idea and purpose of construction imply a previous uncertainty as to the meaning of a contract; for, when this is clear and unambiguous, there is no room for construction, and nothing for construction to do.’ 2 Pars. Cont. 500. The same author says ‘that courts cannot adopt a construction of any legal instrument which shall do violence to the rules of language or the rules of law;’ and quotes the language of Lord Chief Baron EYRE in Gibson v. Minet, 1 H. Bl. 569, that ‘all latitude of construction must submit to this restriction, namely, that the words may have the sense which, by construction, is put upon them.’ 2 Pars. Cont. 494. In Parkhurst v. Smith, Willes, 332, WILLES, J., says: ‘I admit that, though the intent of the parties be ever so clear, it cannot take place contrary to the rules of law, nor can we put words in a deed which are not there, nor put a construction on the words of a deed directly contrary to the plain sense of them.’ Addison on Contracts, p. 165, lays down the rule that ‘the judgment of the court in expounding a deed must be simply declaratory of what is in the deed. It has to ascertain, not what the party intended, as contradistinguished from what the words express, but what is the meaning of the words he has used;’ and ‘when the words of any written instrument are free from any ambiguity in themselves, and where external circumstances do not create any doubt or difficulty as to the proper application of those words to claimants under the instrument, or to the subject-matter to which the instrument relates, such instrument is always to be construed according to the strict, plain, and common meaning of the words themselves, and evidence dehors the instrument, for the purpose of explainint it according to the surmised or alleged intention of the parties, is utterly inadmissible.’ Shore v. Wilson, 9 Clark & F. 565. In considering the language of an insurance contract, the words of a promise are to be regarded as those of the promisor, while those of a representation upon which the promise is founded are the words of the promisee, and are to be taken most strongly against the party using them. May, Ins. § 175.

In view of the fact that these principles have been plainly disregarded by the courts below, we have thought it proper to refer more extensively to elementary authors than would otherwise have been deemed necessary. Their application will be seen by an examination of the situation of the case at the time the objectionable rulings were made.

Among the facts which the defendant deemed it important to know before entering into a contract of insurance with the deceased was his previous business and occupation. The materiality of truthful information in relation thereto was impressed upon the applicant by specific inquiries, and the requirement that truthful answers thereto should be made the condition of a valid contract. With the view of eliciting the information desired, a series of questions was proposed to the deceased, embracing not only an inquiry as to his general business and occupation, but special inquiries as to certain particular trades and employments. Among those which we deem it important to refer to in this cse were the following: ‘A. For the party whose life is proposed to be assured, state the business, carefully specified. Answer. Real-estate and grain dealer. B. Is this business his own, or does he work for other persons, and in what capacity? a. His own. C. In what occupation has he been engaged during the last ten years? A. Real-estate and grain dealer. D. Is he now, or has he been, engaged in or connected with the manufacture or sale of any beer, wine, or other intoxicating liquoes? a. No.’

An application, dated August 28, 1878, containing the questions and answers stated, was signed by Walton Dwight in his character of applicant for insurance, and also in that of the assured, and was delivered by him to the defendant. In pursuance of the request contained therein, the defendant, on August 28, 1878, delivered to the applicant the policy in suit, containing, among others, these provisions: ‘This policy is issued, and the same is accepted by the said assured, upon the following express conditions and agreements: That the same shall cease and be null and void and of no effect * * * if the representations made in the application for this policy, upon the faith of which this contract is made, shall be found in any respects untrue.’ Dwight died November 15, 1878, immediately before the payment of a second quarterly premium became due; and this action was commenced in April, 1879, about seven months after the delivery of the policy.

Upon the trial it appeared that Dwight was engaged in the business of keeping hotel at Binghampton from May, 1874, until March, 1877, and that during that period he regularly and systematically sold wines and liquors in bottles of various sizes, bearing the name of his hotel blown in the glass, to such of his guests as desired them. He kept a wine or liquor room in which was tored a large supply of wines and liquors, and each year, while so engaged, he applied, paid for, and received from the representatives of both the state and national governments licenses and permits authorizing him to carry on the business of selling beer, wine, and liquors at retail, to be drank upon his premises. It also appeared that he kept no bar, and did not sell to persons who were not his guests. These facts were undisputed. Their absolute truth was assumed by the trial judge in charging the jury, and by the general term in passing upon the appeal to that court. That the answer given by Dwight to the questions relating to the sale of liquor was incorrect was admitted by both tribunals. That Dwight did not misconceive the meaning and intent of the question conclusively appeared from repeated answers made by him to other companies within three weeks prior to this time to similar questions in applications for other insurance, in which he stated that he had kept a hotel for three years in which liquor was sold in packages.

Upon denying the motion for a nonsuit the trial court refused to pass upon the question as to whether the facts constituted a breach of warranty or not, but left it to the jury to say whether the sales of liquor proved to have been made were sales at all within the intent and meaning of the contract. In this we think that the court erred, no question arising upon the evidence which authorized its reference to the jury. If there was any room for doubt in respect to the true meaning and intent of the inquiry answered by the deceased, it presented a question of law for the court to determine, and not one for the jury. Lomer v. Meeker, 25 N. Y. 361;Glacius v. Black, 67 N....