Mutual Ben. Life Ins. Co. v. Robison

• Citation: 54 F. 580
• Parties: MUTUAL BEN. LIFE INS. CO. v. ROBISON.
• Decision Date: 21 March 1893
• Court: United States District Courts. 8th Circuit. Northern District of Iowa

54 F. 580

MUTUAL BEN. LIFE INS. CO. v. ROBISON.

United States Circuit Court, N.D. Iowa, Eastern Division.

March 21, 1893

Henderson Hurd, Daniels & Kiesel, for plaintiff.

Utt Bros. & Michel, for defendant.

WOOLSON District Judge.

The plaintiff, a corporation organized under the laws of the state of New Jersey, and being a purely mutual insurance society or corporation, has brought this action, in equity to cancel four policies of insurance, of $5,000 each, which were by plaintiff issued to, and which are held by defendant, who is a resident and citizen of the state of Iowa. The evidence shows that on March 17, 1890, the defendant signed a written application to the plaintiff company for $20,000 life insurance upon his own life, and that, as requested by him, the plaintiff company duly issued to him, and on his own life, four policies of life insurance in the plaintiff company, each policy being dated March 24 1890, and the same being numbered, respectively, Nos. 157,618, 157,619, 157,620, and 157,621, of said plaintiff company; that, at the date of said application, defendant was, and for over 30 years theretofore had been, a resident of the city of Dubuque, Iowa; that, at said date, one T. F. McAvoy was the general agent for the state of Iowa of the plaintiff company, and Charles J. Brayton was the agent at Dubuque of said company; that, prior to said date, said agent Brayton and defendant had interviews on the subject of defendant's taking out insurance in said plaintiff company; that, at that date, the plaintiff had two local medical examiners in its employ at said city; and that said Brayton had informed defendant that the medical examination, required of all applicants for insurance, might be made by either of these two examiners; and that defendant elected to have the same made by Dr. G. M. Staples, one of said medical examiners, and who for many years had been the family physician of the defendant.

On said March 17, 1890, defendant presented himself before Dr. Staples for such medical examination, which was had, and the results thereof were entered upon one of the company's blanks, which had been furnished for that purpose by Agent Brayton. Said examination having been completed, defendant subscribed said application at the several places thereupon required. Said medical examiner and said Agent Brayton and said State Agent McAvoy signed it also; and, said state agent having forwarded it to the home office of the plaintiff company, the four policies above described were issued, and were forwarded to plaintiff to said state agent, who, in turn, sent same to said Agent Brayton, at Dubuque, who collected from defendant the premiums therefor, and thereupon delivered said policies at Dubuque to defendant. Shortly before the second payment of premium, or premium falling due in March, 1891, became due, the plaintiff company has received information, as its officers believed, that certain answers by defendant subscribed in said application were untrue; and thereupon plaintiff tendered back to defendant the premium received, with interest, and refused to receive said second premium or payment, (which defendant tendered,) and brought this action to cancel said policies. The answers whose untruthfulness plaintiff urges as the grounds for such cancellation are two:

'Have you ever had * * * spitting of blood? ' Answer: 'No.'

'For what have you sought medical advice during the past seven years? (b) Dates? (c) Duration? (d) Physicians consulted? ' Answer: 'Debility from overwork. (b) February, 1888. (c) 10 days. (d) G. M. Staples.'

A third ground was alleged in petition, relating to varicose veins; but this ground was abandoned, no evidence relating thereto was taken, and counsel stated the same was not pressed.

The claim of the plaintiff is that by the terms of the application which defendant signed, as well as by the face of the policies, such answers are made warranties whose untruthfulness avoids the contract of insurance, and entitle plaintiff to a decree of cancellation. The phraseology of the application does not materially differ on this point from that in general use by life insurance companies:

'I hereby agree that the answers given herewith to the questions of the agent and examiner, which I declare and warrant to be true, shall be the basis of my contract with the company.'

So that, if these answers are not true, and plaintiff is entitled herein to urge their falsity, a decree canceling said policies should be entered.

At the very threshold of our investigation, we are met with the opposing claim of the parties as to the state whose laws are to be held applicable to the construction and force of the contract of insurance sought to be canceled. Plaintiff contends that, by the very phraseology of the application which defendant signed, this question is decided against defendant. The application states (and immediately following the quotation above given therefrom) that 'such contract shall at all times and places be held and construed to have been made in the city of Newark, New Jersey. ' Therefore plaintiff, applying the laws of the state of New Jersey, and the construction thereof as given by the supreme court of that state, argues with much force for the decree of cancellation. Defendant contends that the laws of the state of Iowa, and the construction thereof as given by the supreme court of that state, are to be applied. The seeming importance of this contention demands that this point shall be first settled. The underlying principle which plaintiff claims is conclusive of this contention has frequently, in its general scope, been before the supreme court of the United States. Perhaps it has received no clearer consideration than that given in Pritchard v. Norton, 106 U.S. 124, 1 S.Ct. 102. Speaking of this point, as now urged by plaintiff, Mr. Justice Matthews says:

'The law we are in search of which is to decide upon the nature, interpretation, and validity of the engagement in question is that which the parties have, either expressly or presumptively, incorporated into their contract as constituting its obligation. It has never been better described than it was incidentally by Chief Justice Marshall in Wayman v. Southard, 10 Wheat. 48, where he defined it as a principle of universal law: 'The principle that in every, forum a contract is governed by the law with a view to which it is made.' * * * And in Lloyd v. Guibert, L.R. 1 Q.B. 120, in the court of exchequer chamber, it was said that 'it is necessary to consider by what general law the parties intended that the transaction should be governed, or rather by what general law it is just to presume that they have intrusted themselves in the matter.' It is upon this ground that the presumption rests that the contract is to be performed at the place where it is made, and to be governed by its laws, there being nothing in its terms or in the explanatory circumstances of its execution, inconsistent with that intention.'

And plaintiff urges further that since the policies were signed at and issued from the home office of the plaintiff company in New Jersey, and by their terms the premiums thereon are to be paid at that office, and any loss thereon is also to be paid at said New Jersey office, therefore these facts, in connection with the agreement above quoted from the application, compel the decision in favor of its contention. The general principle of law above stated is too well settled to admit of dispute, as to any contract and set of facts to which it applies; but, like all other general principles, it may have its exceptions, and it is not properly applicable to every contract of insurance. At the date of said application for insurance, defendant resided in the state of Iowa. The soliciting from defendant by plaintiff's agent of insurance, the examination of defendant, the propounding of the questions to him, the giving of his answers thereto, and his subscribing such application, all these took place in Iowa. Defendant's entire connection with the application was in Iowa. The policies were sent by plaintiff to its Iowa state agent, were received by him in Iowa, and thence forwarded to the agent at Dubuque, Iowa, who collected at Dubuque, Iowa, from defendant the premiums, and thereupon delivered to defendant, at said Dubuque, the policies. By the very terms of each of the policies, 'this policy does not take effect until the first premium shall have been actually paid;' so that the contracts of insurance now sought to be canceled were not to become, and did not become, effective until the payment had been made in Iowa of the first premium thereon. Wall v. Society, 32 F. 273, in the facts last recited, is with the case at bar. In that case the question was squarely presented, 'Is the contract sued on governed and to be construed by the laws of the state of New York, or by the laws of the state of Missouri? ' Mr. Justice Brewer, (then circuit judge,) on this point says, (page 275:)

'In respect to the first question, these, I think, must be taken as the accepted facts: The defendant is a New York corporation, doing business in the state of Missouri. The insured was a resident and citizen of Missouri, and made his application here, which was forwarded to New York. The application was accepted, the policy fully prepared and signed in that state, and sent to Missouri, and delivered to defendant here. By the terms of the policy all premiums are payable at the defendant's office in New York. If the sum insured should become payable, the payment is to be made at its office in New York. None of the terms of the policy can be modified except by one of the four general officers of the society, and no modification is claimed. Under these...