Alabama Gold Life Ins. Co. v. Johnson, Adm'r

• Citation: 80 Ala. 467,2 So. 125
• Court: Supreme Court of Alabama
• Decision Date: 04 May 1887
• Parties: ALABAMA GOLD LIFE INS. CO. v. JOHNSON, ADM'R.

2 So. 125

80 Ala. 467

ALABAMA GOLD LIFE INS. CO. v. JOHNSON, ADM'R.

Supreme Court of Alabama

May 4, 1887

Appeal from circuit court, Mobile county.

Action on policy of life insurance by administrator, etc., of beneficiaries.

Syllabus by the Court.

In a contract of insurance, a warranty is part and parcel of the contract itself, is in the nature of a condition precedent and, whether material to the risk or not, must be strictly complied with, or literally fulfilled, before the assured can recover on the policy; while a representation, not being of the essence of the contract, but relating to something collateral or preliminary, and in the nature of an inducement to it, does not, though false, avoid the policy, unless it relates to a fact actually material, or clearly intended to be made material by the agreement of the parties.

The mere fact that a statement is referred to, or even inserted in the policy itself, is not now considered conclusive of its nature as a warranty; but whether it is to be construed as a warranty, or as a representation merely, depends rather on the form of the expression, the apparent purpose of the insertion, and its connection with other parts of the application and policy, construed together as an entire contract.

Among the settled rules for the construction of policies of insurance are these: (1) That all the conditions and obligations of the contract will be construed liberally in favor of the assured, and strictly against the insurer; (2) that the clearest and most unequivocal language is necessary to create a warranty, and all statements of doubtful meaning will be construed as representations merely; (3) that, even though a warranty in name or form be declared by the terms of the contract, its effect may be modified by other parts of the policy, or of the application, including the questions and answers, so that answers to questions not material to the risk will be construed as warranting only their honesty and good faith.

In this case, the contract containing inconsistent expressions--one part tending to show an intention to make the answers warranties, and another treating them as representations,--the court holds (1) that the answers are not absolute warranties, but in the nature of representations, or, if warranties, only of an honest belief of their truth; (2) that any untrue statement or suppression of fact material to the risk will vitiate the policy, and thus bar a recovery, whether intentional or within the knowledge of the party or not; (3) that such statement of an immaterial fact, though untrue, will not avoid the policy unless the party knew it was false, or was negligently ignorant of it; and (4) that the inquiries as to the symptoms of disease were not intended to be absolutely material unless they had existed in such appreciable form as would affect soundness of health, or have a tendency to shorten life.

The complaint in this case was filed October 30, 1884, and claimed of the defendant the sum of "five thousand dollars, with interest thereon, to-wit, from the ninth day of August, 1884, due by a policy of life insurance whereby the defendant did, on the third day of December, 1882, insure the life of William David Connor in the said sum of five thousand dollars, for the sole use and benefit of Dora E. Connor, the wife of the assured, and his children, said children being William T. Connor and Walter M. Connor, minors under the age of fourteen years; and by said policy defendant undertook and agreed to pay said sum of five thousand dollars to the said beneficiaries within ninety days after due proof of the death of the assured; and the plaintiff avers that the said Dora E Connor died during the life-time of said William E. Connor and that the said children were her only heirs at law, and that she left no will; that plaintiff is the duly qualified administrator of the estate of said Dora E. Connor; that the said assured, William David Connor, died, to-wit, in the month of December, 1883; that due proof and notice of the death of said William D. Connor has been made; and that the plaintiff is the lawfully qualified guardian of the said minors William T. Connor and Walter M. Connor." The further sum of $1,000 was claimed in a separate count, being due under an agreement between the assured and the company for the investment of dividends due him in increasing the amount of the policy.

The said defendant pleaded (1) the general issue. (2) That, at the time of said application for insurance, said W. D. Connor was required to answer various questions in reference to his present and past condition of health and disease, and, among other questions, he was asked in writing, as a part of said application: "Has the party [said W. D. Connor] had or been affected since childhood with fits or convulsions?" To this inquiry the said W. D. Connor replied in writing, "No," which answer defendant avers was untrue; and it now shows and alleges that said W. D. Connor, at the time said answer was made, and for many years prior thereto, had been afflicted with fits or convulsions. Defendant further says that it was expressly stipulated in said application that the declarations and statements contained in said written application shall be the basis of the contract of insurance, and that, if any fraudulent or untrue allegation be contained therein, or in the proposal, all money which shall have been paid on account of said insurance shall be forfeited to the company, and the policy shall be void. Respondent further says that it is expressly stipulated in said policy, the foundation of his action, that if the said declaration, or any part thereof, made by or for said insured in the application for this policy, and bearing date the third day of December, 1872, and upon the faith of which this policy is made, shall be found in any respect untrue, then and in such case this policy shall be null and void. Defendant now alleges that said answer to said inquiry was untrue, and by reason thereof the said policy became and is null and void. (3) The same allegations are made, and conclusions sought to be drawn from the following question and answer in said application: "Has the party [W. D. Connor] ever been seriously ill? If so, when, of what complaint, and who was the medical attendant?" To this question the said W. D. Connor replied in writing, "No," meaning that he had never been seriously ill, which answer defendant avers was untrue, and it now shows and alleges that said W. D. Connor was seriously ill in this: that he had fits or convulsions when he was of the age or 17 of 18 years. (4) The same allegations are made and conclusions sought to be drawn from the following question and answer in said application: "Has the party [said W. D. Connor] ever had or been afflicted since childhood with any serious disease?" To this question the said W. D. Connor replied in writing, "No," which answer defendant avers was untrue; and it now shows and alleges that said W. D. Connor has since his childhood been afflicted with fits or convulsions, which is a serious disease. (5) That said W. D. Connor did declare and state in said proposal for insurance he had not withheld any material circumstance or information touching the past or present state of health or habits of life of said W. D. Connor with which the officers and directors of the Alabama Gold Life Insurance Company should be made acquainted. Said written application further stated and provided that it was the basis of the contract between him and the beneficiaries in said policy and said company, and that if any fraudulent or untrue allegations be contained therein, or in the proposal, all moneys which shall be paid on account of such insurance shall be forfeited to the company, and the policy shall be void. Said policy sued on also expressly stipulates and provides that if said declaration, or any part thereof, made by or for said insured in the application for this policy, and bearing date December 3, 1872, and upon the faith of which this policy is made, shall be found in any respect untrue, then, in such case, the policy shall be null and void. Said defendant further says that said declaration and statement in said written application was untrue, in this: that the said W. D. Connor did withhold from the officers and directors of defendant a material circumstance and information touching the past state of health of said W. D. Connor, in this: that the said W. D. Connor was, when he was of the age of 17 or 18 years, afflicted with fits or convulsions, which fact he withheld from the officers and directors of said defendant when he made said application for insurance, and which was material information, and which withholding, by the terms of said application and policy, rendered said policy null and void. The said cause was tried May 28, 1880, and resulted in a verdict for the plaintiff for $5,800, from which this appeal is prosecuted.

On the trial of said cause, the plaintiff introduced in evidence the policy sued on. Said policy was, in part, as follows "The Alabama Gold Life Insurance Company of Mobile. This policy of insurance witnesseth, that the Alabama Gold Life Insurance Company, in consideration of the representations made to them in the application for this policy of insurance, and of the annual premium, *** do assure the life of William David Connor *** for the sole use and benefit of Dora Connor, wife of the insured, and his children, in the amount of five thousand dollars; *** and it is also understood and agreed by the within assured to be the true intent and meaning hereof that if the declaration, or any part thereof, made by or for the said insured in the application for this policy, and bearing date the third day of December, 1872, and...