Johnson v. National Life Insurance Co.
| Decision Date | 28 November 1913 |
| Docket Number | 18,157 - (256) [2] |
| Citation | 144 N.W. 218,123 Minn. 453 |
| Parties | MARY JOHNSON v. NATIONAL LIFE INSURANCE COMPANY |
| Court | Minnesota Supreme Court |
Action in the district court for Swift county to recover $1,000 upon defendant's policy on the life of her son. The answer alleged that the insured falsely and fraudulently answered certain specified questions in the application attached to and make a part of the policy, and that defendant, relying upon the representations, entered into a contract of insurance to its prejudice; that the insured had been affected with pulmonary tuberculosis for six years prior to his decease; that in 1905 he was advised by his physician that he was tubercular, and acting upon his physician's instructions he went to Montana, for the purpose of improving his health; that upon his return to Minnesota he suffered one or two relapses of said disease prior to the issue of the policy. The reply alleged that the insured made true and complete answers to all questions put to him by defendant's agent, and disclosed to the agent all facts known to him in relation to his physical health, former ailments, or former medical advice or treatment, and that, if any of the answers to the questions in the application relied upon by defendant were answered incorrectly by the insured defendant then knew the true answers to the questions, and the answers were made without any intent to defraud defendant or induce it to issue its policy; that at the time of the application the insured was examined by a certain physician appointed by defendant as its medical examiner who, after such examination, made a full report of the results thereof to defendant and that the report truly set forth the actual physical condition of the insured and that the same was used as a basis for the issue of the policy. The case was tried before Qvale, J., who denied defendant's motion for a directed verdict and a jury which returned a verdict in favor of plaintiff. From an order denying its motion for judgment notwithstanding the verdict or for a new trial, defendant appealed. Reversed and new trial granted.
Life insurance -- misrepresentations of insured.
1. In an action on a life insurance policy, it is held, construing section 5, c. 220, Laws 1907, subd. 4, (R.L. Supp. 1909 § 1695-6, subd. 4):
(a) That a material misrepresentation made with intent to deceive and defraud avoids the policy.
(b) That a material misrepresentation, not made with intent to deceive and defraud, does not avoid the policy, unless the matter misrepresented increases the risk of loss; and if it does increase the risk of loss the policy is avoided regardless of the intent with which it was made.
(c) That an immaterial misrepresentation, though made with intent to deceive and defraud, does not avoid the policy.
Material misrepresentation.
2. Whether a misrepresentation is material, and whether it increases the risk of loss, and whether it was made with intent to deceive and defraud, are usually questions of fact for the jury with the burden of proof upon the insurer; but they may be for the court.
Not a question for jury.
3. The record concedes that the insured made an untrue statement in his application which might have been found fraudulently made and material. The court left the question whether he did to the jury. This was error.
Belden & Safford and Irving M. Hudson, for appellant.
John I. Davis and Davis & Michel, for respondent.
This action is brought to recover upon a policy of life insurance issued to the plaintiff's son. The plaintiff is the beneficiary and the verdict was in her favor. The defendant appeals from an order denying its alternative motion for judgment or for a new trial.
The defendant claims that the policy was avoided, as a matter of law, by a misrepresentation to the effect that the deceased had never consulted a physician; that the court erred in leaving to the jury the question whether certain misrepresentations were material and whether they increased the risk of loss and whether they were made with intent to deceive and defraud; and that it erred in leaving to the jury the question whether the deceased made a certain misrepresentation.
1. Subdivision 4, § 5, c. 220, p. 290, Laws 1907, found in R.L. Supp. 1909, § 1695-6, subd. 4, requires the standard life policy to contain, among other provisions, the following:
"A provision that all statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties, and that no such statement shall avoid the policy unless it is contained in a written application and a copy of such application shall be indorsed upon or attached to the policy when issued."
Section 20, c. 175, p. 400, Laws 1895, now section 1623, R.L. 1905, is as follows:
"No oral or written misrepresentation made by the assured, or in his behalf, in the negotiation of insurance, shall be deemed material, or defeat or avoid the policy, or prevent its attaching, unless made with intent to deceive and defraud, or unless the matter misrepresented increases the risk of loss."
Before the revision section 1623 read "with actual intent to deceive and defraud."
The policy in suit is a standard life policy, of the statutory form, contains the provision required by the Laws of 1907, and a copy of the application is attached to the policy.
The effect of the statutes cited is for determination.
A representation is a statement proffered as a basis for an insurance contract. A warranty is a statement or covenant of the contract. Representations must be substantially true. Warranties must be strictly or literally fulfilled.
Our statutes, and statutes like them, were intended to put warranties upon substantially the basis of representations and to do away with defenses made by incorporating conditions and terms in policies, making them by agreement material representations or warranties, and controlling on the right of recovery. As we construe the statute a material misrepresentation, made with intent to deceive and defraud, avoids the policy. A material misrepresentation, not made with intent to deceive or defraud, does not avoid the policy, unless by the misrepresentation the risk of loss is increased. If a material misrepresentation increases the risk of loss the policy is avoided, regardless of the intent with which it was made. An immaterial representation, though made with intent to deceive and defraud, does not avoid the policy.
Several of the states have statutes of like purpose and some are couched in language substantially identical. The cases construing such statutes uniformly hold that the last "or" in section 1623 is used in the alternative. We bow to the authority of the cases and adopt their construction. The following cases indicate the general purpose of such statutes and they are in general harmony with the construction which we adopt: Levie v Metropolitan Life Ins. Co. 163 Mass. 117, 39 N.E. 792; White v. Provident S.L.A. Soc. 163 Mass. 108, 39 N.E. 771, 27 L.R.A. 398; Rainger v. Boston Mut. Life Assn. 167 Mass. 109, 44 N.E. 1088; Dolan v. Mutual Reserve F.L. Assn. 173 Mass. 197, 53 N.E. 398; Empire Life Ins. Co. v. Gee, 171 Ala. 435, 55 So. 166, 60 So. 90; Mutual Life Ins. Co. v. Allen, 174 Ala. 511, 56 So. 568; Insurance Co. v. Stallings, 110 Tenn. 1, 72 S.W. 960; Light v. Ins. Co. 105 Tenn. 480, 58 S.W. 851; Hermany v. Fidelity Mut. Life Assn. 151 Pa. St. 17, 24 A. 1064; Lutz v. Metropolitan Life Ins. Co. 186 Pa. St. 527, 40 A. 1104; Penn Mut. Life Ins. Co. v. Mechanics Sav. Bank, 72 F. 413, 19 C.C.A. 286, 38 L.R.A. 33, 70; Id. 73 F. 653, ...
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