New England Mut. Life Ins. Co. v. Swain
| Decision Date | 22 March 1905 |
| Parties | NEW ENGLAND MUT. LIFE INS. CO. v. SWAIN. |
| Court | Maryland Court of Appeals |
Appeal from Superior Court of Baltimore City; Pere L. Wickes, Judge.
Action by Isaac O. Swain against the New England Mutual Life Insurance Company, From a judgment in favor of plaintiff defendant appeals. Reversed.
Argued before McSHERRY, C.J., and FOWLER, BOYD, PAGE, PEARCE SCHMUCKER, and JONES, JJ.
Edward Duffy, for appellant.
Edwin T. Dickinson and W. Burns Trundle, for appellee.
On June 1, 1903, Isaac O. Swain sued the insurance company for an alleged fraud of its agent, by means of divers false and fraudulent representations, whereby he was induced to take out a policy of insurance on his life for an annual premium of $429. The declaration contains three counts, in the first of which it is alleged that the plaintiff paid the premium with a promissory note dated August 2, 1897, payable to the order of the defendant six months after date; that on September 5th he received the policy, and during the month of August the agent fraudulently and wrongfully demanded of the plaintiff an additional sum of $429, as and for an additional premium, falsely and fraudulently representing to the plaintiff that it was then due and demandable, and that he had been sent by the defendant to collect it. It then alleges that he, in ignorance that it was not then due and demandable, paid the additional sum of $429, and the agent transmitted it to the defendant. The second count makes the same allegations, excepting it does not refer to the payment of the second premium. The third sufficiently resembles the first to make it unnecessary to refer further to it. Each of the counts concludes with the averment that by reason of the ignorance and inexperience of the plaintiff, and of the false and fraudulent representations of the agent, and the concealment of the fraud by him, the plaintiff was not aware of the fraud, and did not discover, and could not by reasonable diligence have known or discovered, the fraud until some time in July, 1902. The defendant filed the plea of the statute of limitations; one denying that the plaintiff, by reason of his ignorance and inexperience, etc was not aware of the alleged frauds, etc., until July, 1902; another alleging that he was aware of the alleged frauds three years before the institution of the suit; and general issue pleas. By some apparent inadvertence, the defendant pleaded that it did not commit the wrongs alleged, that it never promised, and that it was never indebted; but no point seems to have been raised about that, and issues were finally joined on all the pleas. The trial below resulted in a verdict for the plaintiff in the sum of $600.95, being the amount of one annual premium and interest. A judgment being entered on that verdict, this appeal was taken. Two bills of exception embrace rulings on the admissibility of evidence, and the third includes the prayers, two of which were offered by the plaintiff, which were granted, and seven were offered by the defendant, the sixth and seventh of which were granted, and the others rejected.
The plaintiff is a farmer living in the mountains of Allegany county, about 10 miles from Hancock. He testified that one Eichelberger, an agent of the insurance company, came to his house in July, 1897, and wanted him to take out a $10,000 policy of life insurance; that he said it was a good investment, and would pay 6 per cent. on the money paid in, and he would get $15,000 cash at the end of 20 years, or $20,000 in paid-up insurance; that Eichelberger wrote up the application for a $10,000 policy, and he signed it, and gave his note for the premium, dated August 2, 1897, for $429, payable in six months, to the order of the defendant company; that when it became due he paid it to John R. Lashley, who had purchased it, and then burned it up. The next day Dr. Steigers examined him, and a day or two afterwards Eichelberger returned, when he said the company demanded another payment of $429, and he gave him $366.50 in cash, and five shares of bank stock, valued at $62.50. He said he did not get a receipt from Eichelberger for the note or the last payment, but later he got from the company a receipt, which was offered in evidence. That was countersigned by F.A. Savage, general agent, August 7, 1897, and was a printed form used by the company. It states the amount of the annual premium, has blanks for amount of notes given on account of a first premium, has date at top of "August 1, 1897," and states, "Received of Isaac O. Swain, cash, $429.00." He said he supposed he got the receipt about the 8th of August, and he received the policy by mail about the 6th of September. He testified that he put the policy in a drawer; that he did not read it; that he could not read it; that he could read very little, and could not understand it; can write his name, but cannot read anything to understand it. He received a notice towards the end of the year of another premium being due, and finally, after some correspondence with Mr. Savage, he returned the $10,000 policy to him, and took one for $1,000, which he permitted to lapse at the end of the year.
The plaintiff called Mr. Savage, the general agent, who testified that Eichelberger was the agent of the company in this transaction; that he was furnished with a rate-book, blank applications, and blank printed notes for premiums; that, when an application is signed by an applicant and the medical examiner, the agent sends it to him, and he forwards it to Boston; that the instruction to agents was not to take a note for full amount--applicant must pay at least 25 per cent.--but there is nothing on the notes to show that. He also said that the premium receipt was always issued with the policy; that they are countersigned by him as general agent, and
1. The question was asked Mr. Savage, "What commission did Eichelberger get on first premium?" That was objected to, and, the objection being overruled, that ruling is presented by the first bill of exceptions. It is said that the object was to show an inducement on the part of the agent to procure insurance, as reflecting upon the question whether he made these alleged fraudulent representations. As the reply of the witness was that the agent received 50 per cent. of the first premium, it might, in a case of this kind, reflect to some extent upon the probabilities of the agent making the statements. It is true that one man might not be influenced by the prospect of securing for himself a large amount, while another would yield to temptation for a small sum; but, in cases of alleged fraud, great latitude is allowed, and it would be proper to prove that the agent had a personal interest in issuing the policy. It was relevant for another reason. The plaintiff was entitled to trace, if he could, the money paid by him into the hands of the company, for, if he could have shown, for example, that the company had received both premiums from Eichelberger, it certainly could have been admissible. The question objected to might very well have led up to such an inquiry. But at any rate, we do not see how it could possibly have injured the appellant, for it would be more likely to help than hurt the company, before a jury, to prove that it only received $214.50 out of the $858 received by Eichelberger.
2. The plaintiff, in order to sustain the issue made as to the statute of limitations, claims that he did not know that he had been defrauded until Mr. Bridges called on him in 1902 to take out some insurance. He then told him that he had had insurance, showed him such papers as he still kept, and explained the matter to Mr. Bridges, who told him he had been defrauded. The plaintiff claims that was the first knowledge he had that Eichelberger had been guilty of fraud. Mr Bridges was called as a witness, and started to give his interview with the plaintiff. The defendant's counsel objected to that, and it was admitted subject to exception. He then gave the details of the interview substantially as the plaintiff had. At the conclusion of the case the defendants moved "to strike out all the testimony of the witness Bridges with reference to the conversation between him and the plaintiff, because the same is irrelevant." The court overruled that motion, which ruling is contained in the second bill of exceptions. Ordinarily, of course, a party cannot offer conversations between himself and another person (other than the opposite party to the cause), but in this instance the object of the testimony was to reflect upon the question--which was a material one, under the pleadings--as to when the plaintiff became aware of what he now claims to be a fraud. As he had sworn that he did not know that he had been defrauded until Bridges told him, it was competent to prove by Bridges that he did have an interview with him on the subject, and what he had done. Some of the statements may not have been admissible, but the motion was to strike out all of the testimony of Bridges with reference to the conversation between him and the plaintiff, which could have been done if any part of it was admissible. The court, in passing on it, stated in the presence of the jury the object of it; and, with that statement, we do not see how the defendant could have been injured. It would be difficult to prove in any other way than by calling the witness the fact that h...
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