Manhattan Life Ins. Co. v. P.J. Willis & Bro.

• Decision Date: 23 January 1894
• Docket Number: 172.
• Citation: 60 F. 236
• Parties: MANHATTAN LIFE INS. CO. v. P. J. WILLIS & BRO. et al.
• Court: U.S. Court of Appeals — Fifth Circuit

60 F. 236

MANHATTAN LIFE INS. CO. v. P. J. WILLIS & BRO. et al.

No. 172.

United States Court of Appeals, Fifth Circuit.

January 23, 1894

P. J Willis & Bro., a West Virginia corporation, sued in the district court of Galveston county, state of Texas, the Manhattan Life Insurance Company, a New York corporation, and the administrator of Andrew Peyton, deceased, a resident of Falls county, Texas, on a policy of the Manhattan Company on the life of Andrew Peyton. P. J. Willis & Bro. alleged that the policy had been assigned to it as collateral, and that the debt (open account) did not amount to the face of the policy. The administrator of Andrew Peyton answered that the amount claimed by the plaintiff as due by the estate was correct, and joined in the pleadings of the plaintiff as against the Manhattan, and asked judgment for the amount above the debt due the plaintiff. The Manhattan Company answered by a general denial, and specially that the statements in the application by Peyton for the policy were by its terms and the policy, warranties, and that clause No 11 of application was falsely answered. The allegation of answer setting out the clause is as follows: 'That in and by said application and clause 11, therein contained, a requirement and question was propounded to, and to be answered by, the said Andrew Peyton, in terms and substance as follows, to wit: '(11) If any proposition or negotiation or examination for life insurance' (meaning on the life of said Andrew Peyton) 'has been made in this' (meaning this defendant) 'or any other company or association, on which a policy has not been issued, state when and in what company,'--and following said requirement and question a blank space was left in said application, to be filled with the answer of the said Andrew Peyton to the said requirement and question. That in said blank space the said Andrew Peyton made no other or further answer or reply beyond a simple check mark, as follows, to wit, /, indicating, and by the said Andrew Peyton intended and by this defendant understood, to indicate, in answer to said requirement and question, that no proposition or negotiation or examination for life insurance on the life of said Andrew Peyton had been made in this defendant company, or in any other company or association, on which a policy had not been issued, and the said requirement and question was not otherwise noticed or answered by said Andrew Peyton in said application.' The Manhattan Company alleged, in this connection, that applications to three other companies were pending at the time Andrew Peyton signed this application. The Manhattan Company further alleged that the insured stated he was in sound health, when he knew he was not in sound mental or physical condition. The Manhattan Company removed the cause to the United States circuit court, eastern district of Texas, on the ground of diverse citizenship, and alleged in the petition for removal as follows: 'That the matter in dispute in said cause exceeds, exclusive of interest and costs, the sum and value of two thousand dollars, and, so far as this defendant is concerned therein, the controversy in said suit is wholly between citizens of different states,--that is to say, between the said P. J. Willis & Bro. and S. Peyton, on the one part, as claiming from this defendant the amount of ten thousand dollars on account of the policy of insurance sued on, and the penalty for nonpayment of said sum, and this defendant, the Manhattan Life Insurance Company, on the other part, as resisting the enforcement of said claim,--and said controversy can be fully determined as between said P. J. Willis & Bro. and S. Peyton, as parties of the one part, and this defendant, as party of the other part.' The plaintiff, Willis & Bro., filed in the United States circuit court a supplemental petition, excepting to the answer of the company on the ground that it showed that question No. 11 was not answered, and that the issuance of policy was a waiver of answer; that the answer does not allege that Peyton had been refused by any company when he applied to the Manhattan; and that this was the gist of question No. 11, and so understood by Peyton and the agent who filled out the application. The supplemental petition, by way of rebuttal to the Manhattan Company's answer, alleged that Charles Vidor, who made the application for Peyton, was agent for that purpose for the Manhattan, and was also agent for, and made out applications to, the other three companies for Peyton, at the same time he applied to the Manhattan Company, is estopped by Vidor's agency; that Vidor, the agent, and Peyton understood No. 11 to mean whether any company had refused Peyton; that the company is estopped by the issuance of the policy to say it did not waive question No. 11. Peyton's administrator amended, adopting all the pleadings of Willis & Bro., and praying for judgment for the part of the policy not claimed by Willis & Bro. The Manhattan Company answered to the pleadings of Peyton's administrator by general demurrer and general denial. The case went to trial in this state of the pleading, and without objection to the right of Peyton, administrator, though nominally a defendant, to recover, if the merits warranted. On the trial, the court sustained the Manhattan's exceptions to so much of the supplemental petition of Willis & Bro. as set up agency of Vidor, and an estoppel thereby, and overruled all other exceptions of both parties.

The plaintiff offered in evidence the policy sued on. The Manhattan Company objected on the ground that the suit was on a policy payable on condition of death, and the policy showed it was only payable on condition of truth of statements in application. The court overruled the exception, and the policy was put in evidence. It was agreed by the Manhattan Company that the assignment of this policy was made by Peyton to P. J. Willis & Bro. on the policy on February 16, 1891 consideration named as $1, and might be admitted in evidence, and it was admitted by the Manhattan Company that proof of death had been duly made. The administrator and Willis & Bro. agreed on their respective amounts of the proceeds of the policy and Willis & Bro. and Peyton's administrator, and the same went in evidence without objection. The Manhattan Company, defendant, then offered in evidence the application, admitted by Willis & Bro. and Peyton's administrator to be the original application, on which the policy sued on was issued. The Manhattan Company stated the ground on which it offered the application to be to show that applicant check-marked question No. 11 in the application, and thereby meant no, and that this was a false answer in that. This application to the Manhattan Company was made January 28, 1891, and depositions were offered to show that on January 22, 1891, applicant had made application to the Mutual Life, which was declined February 16, 1891, and that on January 28, 1891, the applicant also made application to the Equitable Life, on which a policy was issued February 4, 1891, but was recalled on February 9, and canceled. In connection with the application of Andrew Peyton to the Manhattan Company, there were offered, 'for the purposes aforesaid, and none other,' the depositions of a number of New York officers of various life insurance companies. To the introduction on this ground of the application and depositions Willis & Bro. and Peyton's administrator excepted, on the ground that the application showed the question No. 11 had not been answered, and that any evidence as to the question No. 11 was irrelevant. The court sustained the objection. The court instructed the jury to find against the Manhattan Company the full amount of the policy, and interest at 6 per cent., and for the Willis & Bro. corporation the...