Kelly v. Life Ins. Clearing Co.

• Decision Date: 13 January 1897
• Citation: 21 So. 361,113 Ala. 453
• Parties: KELLY v. LIFE INSURANCE CLEARING CO. [1]
• Court: Alabama Supreme Court

21 So. 361

113 Ala. 453

KELLY v. LIFE INSURANCE CLEARING CO. ^[1]

Supreme Court of Alabama

January 13, 1897

Appeal from city court of Montgomery; John G. Winter, Judge.

Action by E. Anna Kelly against the Life Insurance Clearing Company on two policies of life insurance. Judgment on a verdict directed for defendant, and plaintiff appeals. Affirmed.

This was an action brought by the appellant, E. Anna Kelly against the appellee, the Life Insurance Clearing Company, to recover $10,000, alleged to be due on two policies of insurance, Nos. 2,741, 2,742, each in the sum of $5,000 whereby the defendant on July 6, 1893, insured the life of Marshall B. Kelly, who died on June 24, 1894. The two policies of life insurance sued on contain, each, the stipulation, that it is "accepted by the insured upon the express declaration and warranty by him made to said company, and conclusively evidenced by the acceptance hereof that he has not now and has never had, any ailment, complaint or disease, except the following: "Vertigo two years ago; la grippe, 1891 ***; that he has not, within five years consulted or been prescribed for by any physician for any ailment or disease," except for vertigo and la grippe at the times stated above. The policy contains, also, a statement of insured's age, and that his parents, brothers and sisters had been exempt from specified diseases. These recited declarations are followed by the provision: "It is expressly agreed that, if the above declaration and warranty shall be found untrue in any respect, or if there shall be any breach thereof whatever, then this policy shall be ipso facto null and void, and all payments made hereon shall be forfeited to said company." The policies were each signed by the president of the company, and attested by its assistant secretary. On the margin of each policy appears the following provision, viz.: "This policy shall not take effect until the first premium thereon shall have been paid to the company, or to some person authorized by the company to receive it, while the said insured is in good health, and in accordance with the health certificate and premium receipt accompanying the same," which was also signed by the president of the company. The application for insurance was made on the 29th July, 1893, to the Penn Mutual Life Insurance Company. In this application, among other things, the question was asked the insured: "Have you ever applied to any company or agent for insurance, without receiving a policy of the exact kind and amount applied for, or are there any negotiations for insurance now pending? (If so, state fully particulars);" and the applicant answered, "No." The application, in each instance, was for an ordinary life policy of $5,000, with premiums payable annually, such as were issued to the assured by the defendant company. This application was followed by an agreement, as a part of the application, signed by the applicant, in which he warranted and agreed that certain things in respect to his habits and health were true; containing also an agreement against suicide, whether sane or insane, and that he would not, without the consent of the company, visit the torrid zone, or personally engage in certain pursuits supposed to be hazardous, on penalty of avoiding the policy. The concluding warranty and agreement was "and that the statement and answers to the printed questions above, together with this declaration, as well as those made to the company's medical examiner, shall constitute the application and be the basis of this contract." The health certificate proved and introduced was as follows: "The Life Insurance Clearing Company of St. Paul, Minn. Health certificate concerning policies Nos. 2,741 & 42. To be signed by the insured, if true, on acceptance of said policy. All the blanks must be filled before policy is delivered. Whereas, the Life Insurance Clearing Company, has issued upon my life the above-numbered policy of insurance, I hereby certify, declare and warrant, in consideration of the delivery to me of said policy, that I am now in as good health, as when examined for admission to the Penn Mutual Life Insurance Co. of Philadelphia, Pa. That I have not, since said date, been sick, or afflicted with any disease requiring the attention of a physician, or met with any bodily injury impairing my health; that my habits are sober and temperate, and that I am now in good health. It is further warranted that the statements herein are, and that the statements in the original application were, when made, in all respects true, otherwise the insurance will be void." Dated 20th July, 1893.

The defendant, on the branch of the case to which the court confines its decision, filed three pleas, the first of which, after stating matters of inducement, set up, "that the policies mentioned in said complaint were issued by it upon the original written application made by the insured, Marshall B. Kelly, to the Penn Mutual Insurance Company; that said application was signed by said insured to certain questions therein propounded to him; that among other matters, in reply to a question therein, asking said insured, if he had ever applied to any company or agent without receiving a policy of the exact kind and amount applied for, or if there were any negotiations for insurance then pending, the answer no, is stated in said application; and defendants say, that at the time, and contemporaneously with the delivery of said policy of insurance mentioned in said complaint, and as a part of the contract of insurance, the said Marshall B. Kelly signed and delivered to it a written health certificate, and it was stated in said certificate, that it was made concerning said policies, and that it was stated on the margin of each of said policies, that it should not take effect until the first premium thereon had been paid to the company, while the said insured was in good health, and in accordance with the health certificate and premium receipt accompanying the same. That in said health certificate, among other matters, it was warranted by the said insured, that the statements in said original application for insurance were, when made, in all respects true, and that otherwise said insurance should be void; and the defendant says that said answer made in said original application to the said question propounded therein, as to any application having been made by the insured to any company or agent, without receiving a policy of the exact kind and amount applied for, was untrue in this, that the said insured, Marshall B. Kelly, before said application and his answer to said question propounded therein, had made application to the New York Life Insurance Company for insurance, without receiving any policy from said company." The second plea was like the first, except that it stated, that said application to said New York Life Insurance Company has been made and rejected, on May 11, 1893. The third plea was, also, like the first, except it stated, that the application to said company had been made, on the 25th of April, 1893, and that negotiations were pending at the time of the application on which the policies were issued.

The plaintiff demurred to these pleas, on grounds in substance, as stated by her counsel in his brief, as follows: "That the pleas did not allege that the policies were issued on the faith of any statement in the health certificate; that the fact of the rejection of the insured by the New York Life Insurance Company was material, or would have deterred defendant from issuing the policies, had this rejection been known; that any of the statements in said certificate were relied on in issuing the policies; that the policies were issued in consideration of any statement in said certificate; that the statements in said certificate and said application were parts of the contract of insurance; that there was any stipulation in said policies that they should become void by reason of the falsity of any statement in said certificate or application; that the untrue answers were any violation of any of the conditions of the policies; or that the alleged misrepresentations was a matter relied on by the defendant in issuing said policies, *** and that the said pleas were no answer to the second count of the complaint."

The court overruled the demurrers to said pleas, and the plaintiff replied to them, in substance as stated by plaintiff's counsel: (1) "Replication No. 1 sets out the health certificate in full, and then avers that the statements contained therein, and the statements in the application were representations, and not warranties which constituted any part of the consideration upon which the policies were issued." (3) "The third replication is to pleas 1, 2 and 3, and avers that the insured applied to the New York Life Insurance Company about April 25, 1893 paid the premium, and having heard nothing from said application for more than a month, he demanded and had his money returned to him, and afterwards applied to the Penn Mutual Insurance Co., and, at the time of this last application, had no notice, knowledge or information that his application to the New York Life Insurance Company had been rejected or was still pending." (8) "The eighth replication was to pleas 1, 2 and 3, and avers, that it was the principal business of defendant to take risks, which had been rejected by other companies, and that the statements in the said pleas alleged to be untrue, were immaterial." (9) She denies that the insured made any of the warranties set forth in either of the pleas 1, 2, 3, (4, 5 and 10). (10) "Further replication to pleas 1, 2, 3 (4, 5 and 10), plaintiff says that the insured made the statements therein contained, but each and all of said statements were mere...