General Accident, Fire & Life Assur. Corporation v. Jordan

• Decision Date: 18 April 1935
• Docket Number: 7 Div. 249
• Citation: 230 Ala. 407,161 So. 240
• Court: Alabama Supreme Court
• Parties: GENERAL ACCIDENT, FIRE & LIFE ASSUR. CORPORATION, Ltd., v. JORDAN.

161 So. 240

230 Ala. 407

GENERAL ACCIDENT, FIRE & LIFE ASSUR. CORPORATION, Ltd., v. JORDAN.

7 Div. 249

Supreme Court of Alabama

April 18, 1935

Rehearing Withdrawn May 22, 1935

Appeal from Circuit Court, Talladega County; R.B. Carr, Judge.

Action on a policy of accident insurance by J.E. Jordan against the General Accident, Fire & Life Assurance Corporation, Limited. From a judgment for plaintiff, defendant appeals.

Reversed and remanded.

Knox Dixon, Dixon & Allen, of Talladega, for appellant.

Harrison & Stringer, of Talladega, for appellee.

FOSTER Justice.

This is a suit on a policy of accident insurance.

The defendant interposed many special pleas, in most of which the defense relied on was some misrepresentation in the application made a part of the insurance contract. The court overruled demurrers to them all, except plea No. 40, and sustained demurrer to that plea.

Appellant defendant, argues in respect to that plea (No. 40) that it is one showing confidential relations between them, in that appellee, plaintiff, was then an agent of defendant, of large experience in such matters, and that the agency created a higher degree of duty to disclose to defendant every matter which was material for defendant to know in passing upon the desirability of the risk, and that he knew what was considered material by defendant, and did not make a full and fair disclosure of all such facts, and made misrepresentations in his application which may not have been with the actual intent to deceive or increase the risk of loss, but which he was under the duty of a confidant to disclose and represent truly, thereby lulled the defendant, in dealing with his agent, into security and the issuance of the policy without the investigation which would have been made had he not been thus related.

This plea showed that the application contained a clause whereby appellant agreed that the falsity of a statement shall bar a recovery if made with intent to deceive or materially affects either the acceptance of the risk or the hazard assumed.

Giving plea 40 the construction which appellant's counsel have done in argument, we think it is subject to demurrer. If it alleges that such misrepresentations increased the risk of loss, or were made with the intent to deceive, as it so appears to us, since it adopts that part of plea No. 39, it was sufficiently covered in that plea on which issue was joined. We do not think the answer to the question by which plaintiff agreed that the falsity of any statement in his application shall bar a recovery if it is made with the intent to deceive, "or materially affects either the acceptance of the risk, or the hazard assumed by the corporation," has the effect of enlarging or in any manner changing the principle declared in section 8364, Code. Without the intent to deceive it is not enough that the misrepresentation shall be material in determining whether the policy shall be issued, and cannot be made so by contract, but it must go to the extent of increasing the risk of loss. In that respect our statute differs from that of Virginia considered in Union Indemnity Co. v. Dodd (C.C.A.) 21 F. (2d) 709, 55 A.L.R. 735, note page 742. We think that there was no prejudicial error in sustaining demurrer to plea No. 40.

The pleas (all except 40) were held good on demurrer. That means that the court ruled that they set up misrepresentations intrinsically material in passing on the application; and alleged that the insurer relied and acted on the statements contained in the application, and that they were made, as alleged in some, with the intent to deceive, and in others, that they increased the risk of loss.

Appellant insists that it was due to have its general affirmative charge given to the jury, or in the alternative that its motion for a new trial should have been granted. While the court, as a matter of law, may pass on the materiality of a misrepresentation, and sometimes also whether it increased the risk of loss, the general rule is that the question of intent is an inference of fact, and it is submitted to the jury when reasonable men may draw different conclusions. New York Life Ins. Co. v. Torrance, 228 Ala. 286, 153 So. 463. Likewise, whether it increased the risk of loss is for the jury if it is a reasonably debatable question. Brotherhood, etc., v. Riggins, 214 Ala. 79, 107 So. 44; Sov. Camp, W.O.W., v. Gibbs, 217 Ala. 108, 114 So. 915; Nat. Life & Accident Ins. Co. v. Baker, 226 Ala. 501, 147 So. 427.

But that question may sometimes be one for the court. Padgett v. Sov. Camp, W.O.W., 218 Ala. 255, 118 So. 456; Sov. Camp, W.O.W., v. Harris,

228 Ala. 417, 153 So. 870.

Since issue was taken on the pleas, the materiality of the alleged misrepresentations is thereby admitted, but the degree of their materiality and their probable influence upon defendant in passing on the application, known to plaintiff, should affect the question for the jury of whether plaintiff intended to deceive. On that question, as well as whether they increased the risk of loss, we think defendant was not due the affirmative charge, since they were jury questions.

But though there may have been sufficient evidence to submit them to the jury in the first instance, their verdict is subject to review upon a consideration of the motion for a new trial. In considering that motion, we will now refer to the various special pleas and the evidence relating to the controversy made by them.

We do not think it is necessary to state the substance of each plea separately. The issues are:

(1) That a question (No. 12) in the application was misrepresented, in that he stated that his weekly earnings from his occupation exceeded the weekly indemnity under all policies, including that then applied for. The evidence of plaintiff (pages 117 and 398), as we interpret it, showed his earnings to be $300 a month, or approximately $75 a week. That he was repaid for his business expense is not, in our opinion, a part of his earnings. His weekly indemnity under all such policies was approximately $150, or twice as much as his earnings.

(2) That a question (No. 14) as to whether he had been declined for life, accident, or health insurance, or, in alternative, a question (No. 13) as to whether he had made an application for accident or health insurance on which he had not been notified of the company's action, were incorrectly answered.

The evidence on that issue is summarized as follows: Provident Life & Accident Insurance Company, pleas 4, 5, 34, and 35. In 1933 declined because he was agent of the company. In 1925 declined life policy without assigning reason. Jefferson Standard Life Insurance Company, pleas 6, 7, and 41. August 2, 1932, applicant notified matter postponed for him to get away from liquor habit, not further notified. In fact declined. AEtna Life Insurance Company, pleas 8 and 9. In March and April, 1922, application for disability insurance declined and he so informed. Acacia Mutual Life Insurance Company, pleas 10 and 11. July, 1932, applied for life insurance with disability benefits. September, 1932, disability declined, but life offered, not accepted by plaintiff. Massachusetts Mutual Life Insurance Company, pleas 12 and 13. December 12, 1931, applied for new policy for disability benefits, and to add benefits to two existing policies. Company declined new policy but added benefits to the old policies. Continental Casualty Company, pleas 14, 15, 37, and 38. January 7, 1933, made application for life $10,000, with $50 weekly benefits, offered $1,000 life with $50 weekly benefits, declined by plaintiff.

(3) That question No. 14 was also incorrectly answered as to whether any life, accident, or health insurance had been canceled. The evidence showed one canceled on February 4, 1924, and another on September 29, 1916.

(4) That question No. 15 was incorrectly answered as to whether he had received indemnity for injury or illness. The evidence showed the following amounts so received:

From Pacific Mutual Life Insurance Company (page 226 et seq.):

Nov. 24, 1918, for influenza and pneumonia $ 47.86

June 29, 1922, for ptomaine poisoning 12.14

Jan. 10, 1923, for acute indigestion 11.43

Nov. 20, 1923, for infected toe 19.28

Jan. 11, 1924, for influenza 18.57

Apr. 2, 1925, for influenza 8.57

Oct. 14, 1927, for burned with acid 19.28

May 16, 1927, for influenza 36.00

June 18, 1927, for influenza 2.57

Dec. 26, 1928, for injury to left foot 35.00

Oct. 8, 1932, for auto accident 10.00

Nov. 15, 1932, for auto accident 10.00

Nov. 30, 1932, for sickness 4.29

Dec. 21, 1932, for sickness 20.00

-------

$255.10

From North American Accident Insurance Company (page 364):

Dec. 3, 1923, for influenza $36.66

Jan. 18, 1924, for influenza 86.66

--------

$123.32.

(5) That question No. 13 was incorrectly answered, in that instead of having only $140 accident or health insurance then outstanding in other companies, he had the following:

Massachusetts Mutual $110.00

Citizens National 40.00

Mutual Benefit 200.00

New England Mutual 50.00

Pacific Mutual 40.00

-------

$440.00

As answered: 140.00 Excess of $300 over that as represented in the...