Hubbard v. Mutual Reserve Fund Life Ass'n

• Decision Date: 29 March 1900
• Docket Number: 290
• Citation: 100 F. 719
• Parties: HUBBARD v. MUTUAL RESERVE FUND LIFE ASS'N.
• Court: U.S. Court of Appeals — First Circuit

100 F. 719

HUBBARD v. MUTUAL RESERVE FUND LIFE ASS'N.

No. 290

United States Court of Appeals, First Circuit.

March 29, 1900

Lewis S. Dabney and Edward D. Bassett (Edward L. Mitchell, on the brief), for plaintiff in error.

Walter F. Angell (George Burnham, Jr., on the brief), for defendant in error.

Before COLT and PUTNAM, Circuit Judges, and ALDRICH, District Judge.

PUTNAM Circuit Judge.

This is a writ of error, in which the only question pending before us is whether or not, in the court below, the learned judge properly directed a verdict for the defendant in a suit on a life insurance policy. 80 F. 681. The action was brought in the district of Rhode Island. We have not been advised where the contract was made, but, apparently, it was made in that state, and is governed by its laws. However, this is not important, because there is no contention that the policy and application are not governed by the rules of the common law.

The policy issued on March 20, 1891, on an application made on March 12th by the person whose life was insured. The defense is a breach of warranty, in that certain statements made in the application were not true. The application was not attached to the policy, but the policy contained the following: 'In consideration of the answers, statements and agreements contained in the application for this policy of insurance, which are hereby made a part of this contract,' etc. The application, among other things contained the following: 'It is hereby agreed that the answers and statements in this application * * * are warranted to be full, complete, and true; * * * that, if any of the answers or statements made are not full, complete, and true, * * * the policy issued hereon shall be null and void ' The application also stipulated that it, and the answers which it contained, were parts of the policy. Neither the policy nor the application contained any expressions inconsistent with this word 'warranted,' nor with the express agreement that, if the answers and statements were not 'full, complete, and true,' the policy should be null and void. The only questions and answers which we need repeat are the following:

'Has the applicant ever had any illness, local disease, injury, mental or nervous disease or infirmity? Ans. No.

'If yes, state nature, date, duration, and severity of attack.

'How long since you consulted or were attended by a physician? Ans. Not since childhood.

'State name and address of such physician.

'For what disease or ailment?

'Give name and address of each physician who has prescribed for or attended you within past five years, and for what diseases or ailments, and date. Ans. Have had none.

'Have you used externally or internally any patent, proprietary, or other medicines within the past two years? If so, what, and for what diseases? Ans. No.

'Has the applicant been an inmate of any infirmary, sanitarium, retreat, asylum, or hospital? If so, where? When? Duration? For what cause? State expressly each and every case. Ans. No.

'Have any facts regarding your past health or present condition been omitted? Ans. No.'

Blanks were left for answers to the second, fourth, and fifth of the foregoing questions; but the answers to the previous questions left it unnecessary to fill them, and they were not filled.

The issues raised on these questions and answers are whether, under the circumstances, the answers were warranted as true, and have effect under the stipulation that, if they were not true, the policy should be void, and, further, as to the effect of particular words which the answers contain. On the first issue, and also as to the general rules of interpretation of such questions and answers, we need not look beyond the decisions of the supreme court, which has several times thoroughly considered this topic. The plaintiff relies on the line of cases of which Insurance Co. v. Raddin, 120 U.S. 183, 7 Sup.Ct. 500, 30 L.Ed. 644, is one. We believe the earliest of this class is First Nat. Bank of Kansas City v. Hartford Fire Ins. Co., 95 U.S. 673, 24 L.Ed. 563. All contain essential features which are not found at bar. The well-known rule with reference to the interpretation of insurance policies was applied, to the effect that, when they contain contradictory provisions, or are doubtful, the construction favors the insured. For example, in First Nat. Bank of Kansas City v. Hartford Fire Ins. Co., already referred to, it appears in the opinion of Mr. Justice Harlan, speaking in behalf of the court, at page 676, 95 U.S., and page 564, 24 L. Ed., that the application contained the words, 'so far as known to him. ' Moreover, it appears that, while in one part of the application the insured was made to stipulate for a warranty, in another part the word 'representation' was used. So, in the familiar case of Moulor v. Insurance Co., 11 U.S. 335, 4 Sup.Ct. 466, 28 L.Ed. 447, the same peculiarities were found. It is so apparent that the same especial condition of things existed in Insurance Co. v. Raddin, supra, that it is not necessary to analyze the opinion there rendered.

These decisions, however, establish two propositions which bear directly on the case at bar. In First Nat. Bank of Kansas City v. Hartford Fire Ins. Co., supra, the opinion of Mr. Justice Harlan, at page 675, 95 U.S., and page 564, 24 L. Ed., states as follows:

'The entire application having been made, by express words, a part of the policy, it is entitled to the same consideration as if it had been inserted at large in that instrument. The policy and application together, therefore, constitute the written agreement of insurance; and, in ascertaining the intention of the parties, full effect must be given to the conditions, clauses, and stipulations contained in both instruments.'

In Insurance Co. v. Raddin, the opinion of Mr. Justice Gray, at page 190, 120 U.S., page 503, 7 Sup. Ct., and page 647, 30 L. Ed., says: 'In the contract before us, the answers in the application are nowhere called warranties or made a part of the contract. ' At page 189, 120 U.S., page 502, 7 Sup. Ct., and page 646, 30 L. Ed., it says: 'But the parties may by their contract make material a fact that would otherwise be immaterial, or make immaterial a fact that would otherwise be material.' It is sufficient to say, therefore, with reference to all the decisions to which we have referred, that the case at bar does not contain the elements which enabled the court to declare that the answers in the application were representations, and not warranties. Moreover, the supreme court has firmly maintained the rule that, under the conditions existing in the case at bar, the answers in an application are to be held as warranties, and has administered the law accordingly. Jeffries v. Insurance Co., 22 Wall. 47, 22 L.Ed. 833; Insurance Co. v. France, 91 U.S. 510, 23 L.Ed. 401. These cases were reaffirmed in Moulor v. Insurance Co., supra, at pages 340, 341, 111 U.S., page 469, 4 Sup. Ct., and page 449, 28 L. Ed., in the following language:

'If, upon a reasonable interpretation, such was the contract, the duty of the court is to enforce it according to its terms; for the law does not forbid parties to a contract for life insurance to stipulate that its validity shall depend upon conditions or contingencies such as the court below decided were embodied in the policy in suit.'

This expression is to be particularly noted with reference to what we may say hereafter in the detailed examination of the case at bar, because, while the opinion applies the rule which we have stated, that in doubtful cases the court must lean in favor of the insured, yet it here affirms that the contract is to have 'a reasonable interpretation.' Therefore the court is not to strain the letter for the purpose of imposing an obligation on the insurer which a fair interpretation would not impose on an obligor in any other contract.

As against the conclusion that in this case the applicant, as well as the plaintiff to whom the policy was made payable, are bound by the law of warranty, the plaintiff in error maintains that some of the questions which the application contained are of such character that it is absurd to conclude that the subject-matter of them could constitute a warranty according to the mutual intention of the parties. This is true as to a few of the questions propounded, but the great majority of them, especially of those which we have quoted, are not of this class. To hold, because there are some exceptional questions and answers of the character referred to, that, therefore, the court should wholly reject an explicit stipulation, would be a rude method of construction, without discrimination. The exceptional questions and answers referred to can easily yield to necessary rules so far as they are concerned, leaving the mass to be controlled by the expressed intention of the parties.

We pass now to the next question, which is as to the general rule of construction to be applied to the particular words used in the questions and answers which form the application. As to this, the rule given us by the supreme court is in some respects more favorable to the assured, and in other respects less favorable, than those applied by the courts of the various states, as they will be found conveniently grouped in the notes to section 31 of Cooke's Law of Life Insurance (1891). The key to this question is in the expression of Mr Justice Harlan, in Moulor v. Insurance Co., supra, at page 340, 111 U.S., page 469, 4 Sup. Ct., and page 449, 28 L. Ed., that the application must be understood to relate to matters which have 'a sensible, appreciable form.' This rule was applied in Connecticut Mut. Life Ins. Co. v. Union Trust Co., 112 U.S. 250, 258, 5...