Price v. Phœnix Mut. Life Ins. Co.

• Decision Date: 01 January 1872
• Citation: 17 Minn. 473
• Parties: DUNBAR PRICE and another, by their Guardian, etc. v. PHŒNIX MUT. LIFE INS. CO.
• Court: Minnesota Supreme Court

17 Minn. 473

DUNBAR PRICE and another, by their Guardian, etc.

v. PHŒNIX MUT. LIFE INS. CO.

Supreme Court of Minnesota.

Appeal by the defendant from an order of the district court, Hennepin county, denying a new trial.

Bigelow & Clark, for appellant.

Cornell & Bradley, for respondents.

BERRY, J.

This is an action upon a life insurance policy upon the life of Richard Price.

By the terms of the policy the defendant promises to pay the sum assured to Anna D. Price, (the wife of said Richard,) upon whose application and for whose benefit in the first instance the policy was issued.

The policy further provides as follows: "In case of the death of said Anna D. Price before the decease of the said Richard Price, the amount of the said insurance shall be payable to their children, for their use, or to their guardian, if under age, within 90 days after due notice and proof of the death of said assured as aforesaid."

Anna D. Price having died before her husband, Richard Price, the said Lizzie D. and Dunbar Price, being their minor children, bring this action by said Elon Dunbar, duly appointed their guardian ad litem, to prosecute the same. The defendant insists that the action should have been brought by the general guardian of said minors. But we are of a different opinion. Admitting that the guardian named in the policy is the general guardian, we think that while the words "payable * * * to their guardian * * * within 90 days," etc., gave the defendant the privilege, and make it his duty, to pay the sum assured to such guardian (if the children are under age) within 90 days, it does not follow that an action brought to recover the sum assured must be brought in the name of such general guardian. The children are the real parties in interest, and therefore the action is under the statute (chapter 66, Gen. St. §§ 26, 30) well brought by them in their own names, they appearing by a guardian ad litem. Even if the general guardian be regarded as a trustee of an express trust, the statute authorizing such trustees to bring actions in their own names is not imperative, but permissive in its terms. Chapter 66, Gen. St. § 28.

This action was brought in the Hennepin county district court, November 9, 1869. The complaint, among other things, alleges that on the tenth day of June, 1867, Anna D. Price, who was then the wife of Richard Price, entered into a contract of insurance with the defendant upon her said husband's life. The complaint sets forth the policy in full. The consideration for the policy is expressed in it to be the representations made to defendant in the application for the policy, and the premium paid and to be paid. The policy contains the following provision: "Provided always, and it is hereby declared to be the true intent and meaning of this policy, and the same is accepted by the assured upon these express conditions, that * * * in case he shall die by the hand of justice, or in consequence of a duel, or of the violation of any law of these states or of the United States, or of any other country which he may be permitted under this policy to visit or reside in, or if any of the declarations or statements made in the application for this policy, upon the faith of which this policy is issued, shall be found in any respect untrue, then, and in every such case, this policy shall be null and void." The complaint further alleges the death of said Anna, September 28, 1867, and the death of said Richard, March 2, 1869; and "that up to March 2, 1869, all the terms, agreements, and stipulations, of said policy of life insurance that were to be performed on the part of said assured had been fully and faithfully performed and complied with;" that proper notices and proofs have been duly made, but the defendant has failed to pay any part of the sum assured. The complaint does not set out the application referred to in the policy, nor state what the "declarations or statements" made in the application and referred to in the policy were.

Defendant's answer admits the making of a contract of insurance with Anna D. Price, and that the policy set out in the complaint contains a part of said contract, but denies that the policy contains the whole contract, and alleges that the application referred to in the policy is part of said contract of insurance.

The answer sets out the application dated June 3, 1867, which was made by the said Richard Price, as agent for said Anna, and consists of certain questions addressed to said Richard, and his answers thereto. Said application contains a stipulation following the questions and answers, and in these words, namely: "It is hereby declared that the above are fair and true answers to the foregoing questions, and it is acknowledged and agreed by the undersigned that this application shall form the basis of the contract for insurance, and that any untrue or fraudulent answers, any suppression of facts, or neglect to pay the premium on or before the day it becomes due, shall and will render the policy null and void, and forfeit all payment made thereon."

The answer denies that up to the second of March, 1869, all the terms, agreements, and stipulations of the policy that were to be performed on the part of the assured have been fully and faithfully performed and complied with, and charges that the answers to the following questions in the application were untrue, viz.:

"(7) What is the present state of the party's health? Answer. Good.

"(9) Is the party addicted to the habitual use of spirituous liquors or opium? Answer. No.

"(13) Has the party ever had any of the following diseases, (naming them, and among others,) gout, rheumatism? Answer. Never.

"(18) Has the party had during the last seven years any severe sickness or disease? If so, state the particulars, and the name of the attending physician, or who was consulted and prescribed. Answer. No.

"(25) Name and residence of the family physician of the party, or of one whom the party has usually employed or consulted? Answer. Have none."

The answer further charges that at the time of the making of the application, and the issuing of the policy, said Richard's health was not good, but that he was in bad health and diseased; that he was addicted to the habitual use of spirituous liquors; that before said times he had had gout and rheumatism; that he had had within seven years before said times dyspepsia and chronic gastritis, and that at said times he had a family physician.

Upon the trial before the court and a jury, plaintiffs introduced evidence of the due appointment of the guardian ad litem, and of the making and delivering to defendant of the proof of death, with other notices and certificates required, and also proved by the witness, Andrew Scott, who was boarding in Richard Price's family from September, 1865, to the summer of 1867, that in the summer of 1867 his (Richard Price's) health was good as far as the witness knew. They also proved by Dr. Murphy, one of the defendant's medical examiners, that he knew Richard Price in his life time for three or four years; that he made a particular examination of him at the time of his application, and considered him a healthy, sound man at the time, and passed him as a suitable subject for insurance; that he examined him and found no disorder about him. Plaintiffs also proved by Dr. C. G. Goodrich that Price died of typhoid fever, and after offering some other evidence, not here material, rested their case. Defendant thereupon moved to dismiss the action upon the ground that the complaint does not state, nor the evidence establish, a cause of action.

It is here argued that the court below erred in refusing to grant the motion, because the statements contained in the appliction are warranties, and therefore conditions precedent to plaintiffs' right of recovery which it is necessary for them to aver and prove.

The plaintiffs claim, on the other hand, that these statements are representations. The point thus presented for our consideration is one of prime importance in this case, not only with reference to the question of pleading and burden of proof, but with reference to the further inquiry whether it is essential to plaintiff's recovery that the statements mentioned shall be strictly true, or whether their substantial truth is sufficient.

So far as the questions presented by the case at bar are concerned, it is sufficient to define a warranty in insurance to be a part of the contract evidenced by the policy, and a binding agreement that the facts stated are strictly true. 1 Phil. Ins. (5th Ed.) §§ 754, 756; Flanders, Ins. 204, 205.

A representation in insurance may, for the purpose of this case, be defined to be a statement in regard to a material fact made by the applicant for insurance to the insurer with reference to a proposed contract of insurance. 1 Phil. Ins. § 524 et seq.

As representations simply they are not a part of the contract of insurance. Flanders, Ins. 201, and cases cited; Campbell v. N. E. M. L. I. Co. 98 Mass. 381. And though expressly referred to in the policy so as to become a part of the written contract, they may not become warranties. 1 Phil. Ins. §§ 871, 893. And even if it be made by the very terms of the policy, as in the case at bar, an express condition of the contract of insurance that if such representations are found to be untrue, the policy shall be null and void, they do not necessarily lose their character as representations, and become warranties, though the effect of such express condition may be to make them conclusively material. Campbell v. N. E. M. L. Ins. Co. supra.

It is sufficient if representations be substantially true, while a warranty must be strictly complied with. 1 Phil. Ins. §§ 544, 669, 762, et seq.; Daniels v. Hudson R. F. I. Co. 12 Cush. 423; Chaffee v. Cattaraugus Co. M. F. I. Co. 18 N. Y. 376. A false warranty, therefore, avoids a policy, while a false representation (not fraudulent) does not avoid...