Metro. Life Ins. Co. v. Olsen

• Decision Date: 06 November 1923
• Docket Number: No. 1909.,1909.
• Citation: 123 A. 576
• Court: New Hampshire Supreme Court
• Parties: METROPOLITAN LIFE INS. CO. v. OLSEN (two cases). MAYO v. METROPOLITAN LIFE INS. CO. (two cases).

123 A. 576

METROPOLITAN LIFE INS. CO.

v. OLSEN (two cases).

MAYO

v. METROPOLITAN LIFE INS. CO. (two cases).

No. 1909.

Supreme Court of New Hampshire. Hillsborough.

Nov. 6, 1923.

Two bills in equity filed October 25, 1921, asking the cancellation of two policies of insurance upon the life of William R. Mayo issued June 30, 1919, and November 10, 1919, respectively, payable upon the death of Mayo to Florence Mayo, whose relationship to the assured was stated in the application and policy as that of "wife." The prayer of the bills was for decrees canceling the policies upon the ground of fraud in their procurement. The fraud alleged was the statement as to the relationship of the proposed beneficiary. The two cases in which Florence Mayo is plaintiff are suits in assumpsit to enforce the policies; the assured having died July 28, 1920. The writs in these suits were dated September 2, 1920, and entered at the September term, 1920. Counsel for the defendants duly appeared, and the cases were continued from term to term, and upon October 25, 1921, the defendants filed the general issue with a brief statement in the form of a bill in equity praying for a cancellation of the policy.

The cases were heard on the bills in equity by Sawyer, J., who found the following facts. Florence Mayo, named in the policies as the wife of the insured and who was the beneficiary he intended, was not his wife. The insured had a lawful wife living at his decease, Susan Edith Bates Mayo, to whom he was married January 23, 1908, but with whom he had not lived since January, 1910. The insured and Florence lived together in the relation of husband and wife from 1910 until his death, and introduced each other as such to their friends. Florence had a husband one Olsen, living in 1910, from whom she procured a divorce in 1915. The insured twice took steps toward entering a libel for divorce, but did not do so. Mrs. Susan Edith Bates Mayo filed a libel for divorce against him June 9, 1920, for desertion, but he died before the return day. Florence and the insured agreed when they began living together to get divorces and then to marry.

Subject to exception the court found that the relations under which the insured lived with the proposed beneficiary increased the risk insured, and that the defendants would not have issued the policies if they had known the fact.

Whether or not upon the facts the policies or either of them should be canceled is reserved as an important question of law in advance of further proceedings. The evidence containing exceptions taken by the beneficiary is made a part of the case, together with the policies, applications, docket entries, and motions made at the trial.

Branch & Branch, of Manchester (Frederick Branch, of Manchester orally), for Metropolitan Life Ins. Co.

Murchie & Murchie, of Concord and Tuttle, Wyman & Starr, of Manchester (A. Murchie, of Concord, orally), for the beneficiary.

PARSONS, C. J. "Every policy of insurance issued or delivered within this state on or after the first day of January, nineteen hundred and eight, by any life insurance corporation doing business within the state shall contain the entire contract between the parties." Laws 1907, c. 110, § 1. Whether under this statute the parties could agree that another paper not incorporated in the policy should contain a part of the contract so that either could rely upon stipulations therein and whether, if they could not, the attaching of a copy of such a paper to the policy makes the original a part of the policy within the meaning of the statute; and whether, if it does, a paper readable only by the reckless use of good eyes (De Lancey v. Ins. Co., 52 N. H. 581, 590) is a sufficient copy are questions that have not been raised. It may be the policy was not "issued or delivered within this state."

Assuming therefore that the contract between the parties was not in conflict with the law of the state, the main question is, What was the contract they made? In the absence of statutory prohibition, parties to insurance contracts, like parties to other contracts, may incorporate into their contracts such conditions as they see fit, and, unless their stipulations offend the moral sense of the community so that to require them to be carried out would transgress the policy of the state, courts will enforce the contracts as made. Upon the contention that the liability of one party under a contract is discharged by a false statement of the other in the making of the contract, the question is whether the parties agreed that the truth of such statement should be a condition precedent to the liability of the other, then called a warranty, or, if not, was the fact one whose verity was understood to be material to the contract or one not entering into the contract. In the first two cases, the falsity of the statement avoids the contract. In the latter it does not, because its truth is no part of the contract.

"The falsity of a statement which the parties have expressly warranted to be true, or agreed shall constitute a material part of the contract, avoids the policy; while if the parties have not agreed that the statement shall be considered material, the policy is not affected, unless the misstatement is in a matter in fact material to the risk assumed by the insurer." Dwyer v. Ins. Co., 72 N. H. 572, 573, 58 Atl. 502; Boardman v. Ins. Co., 20 N. H. 551, 552.

The contract of the parties, what they agreed upon, is determined by the meaning of the documentary evidence, the policy, and such other papers as the law permits to be used in proof thereof.

"In construing insurance policies courts are governed by the same general rules which are applicable to other written contracts. That is to say, it is the duty of the court to adopt that construction of the policy which, in its judgment, shall best correspond with the intention of the parties, which is to be ascertained from the whole instrument," and the subject-matter of the contract. Stone v. Ins. Co., 69 N. H. 438, 45 Atl. 235.

"The interpretation of an insurance contract, like the interpretation of other contracts, depends upon the intention of the parties ascertained from legally competent evidence. For sound reasons, universally recognized in the administration of justice, the evidence which is admissible upon the question of the meaning or intention of the parties docs not include ordinarily their parol testimony. The point to be determined is, not what they in fact intended * * * to do, but what they in fact expressed as their purpose in the writing presented for interpretation. Goodeno v. Hutchinson, 54 N. H. 159. It is not the province of the court to make contracts for parties, or to allow them to change, modify, or abrogate their agreements by parol proof that they did not intend to bind themselves by the terms they chose to employ as expressive of their intention." Marsh v. Ins. Co., 71 N. H. 253, 254, 51 Atl. 898, 899.

The application in each policy is upon a printed form supplied by the insurer and that for each policy contains the following, the word italicized being inserted with a pen:

"Whom do you designate as beneficiary to receive proceeds in event of your death? (Print.) Florence Mayo. Relationship of proposed beneficiary. Wife. Age, 38. P. O. Address, 56 No. State St., Concord, N. E."

Florence Mayo was not the wife of the assured at the time of the applications. She had been married to one Olsen, from whom she secured a divorce in 1915. The assured had a wife, whom he married in 1908, but with whom he had not lived since 1910. Since 1910 the assured and Florence had lived together as husband and wife under a mutual agreement to marry when they could legally do so, and introduced each other to their friends as husband and wife. The only ground upon which the insurer asks the cancellation of the policies is the statement in the application for each as to the relationship to the assured of the proposed beneficiary. The statement is descriptive of and tends to identify the person whom the assured wished made beneficiary. That he intended the proceeds on his death should be paid to Florence, then known in the community as his wife, is found to be the fact. For the purpose of description and identification the statement was...