Murphy v. National Travelers' Benefit Ass'n
| Decision Date | 22 January 1917 |
| Docket Number | 31121 |
| Citation | 161 N.W. 57,179 Iowa 213 |
| Parties | FRANCIS MURPHY, Appellee, v. NATIONAL TRAVELERS BENEFIT ASSOCIATION, Appellant |
| Court | Iowa Supreme Court |
Appeal from Polk District Court.--W. S. AYRES, Judge.
Action at law, in which plaintiff seeks to recover as beneficiary under a certificate of accident insurance issued to one George B. Murphy. There was a trial to a jury. At the close of the testimony, the trial court directed a verdict for plaintiff on plaintiff's motion. Defendant appeals.
Affirmed.
Carr Carr & Evans, and E. K. Maine, for appellant.
Henry & Henry, for appellee.
Plaintiff alleges the corporate capacity of the defendant, the issuance of the certificate, and that plaintiff is the beneficiary named; that on August 20, 1914, the said George B. Murphy met with an accident causing his death. A copy of the certificate is attached to the petition, on the cover of which the following appears:
"
The following provision appears in the certificate of membership:
"This certificate includes the endorsement and attached papers, if any, and contains the entire contract of insurance except only as it may be modified by the association's classification of risks in cases of change of occupation."
On the back of the certificate, which is made a part thereof, is the following:
In said application appears the following:
The certificate also contains the following provisions:
Defendant's answer admits the issuance of the certificate, admits plaintiff is the beneficiary named, and admits that George B. Murphy met with an accident causing his death as alleged. Defendant denies, however, that it is indebted to plaintiff in the sum of $ 2,000, or in any other sum or amount in excess of $ 1,000. The answer alleges that, at the time deceased made the application and at the time of his death, his total annual income did not exceed $ 416, as he well knew; that for the purpose of deceiving and defrauding defendant the said deceased in his application falsely and fraudulently stated, represented and alleged that his total income was at least $ 750 per annum; that defendant issues three classes of accident insurance risks; designated as the "Business Men's Preferred," "General Commercial," and the "Farmers' and Mechanics' Special;" that each of said classes is determined in part by the occupation of the applicant and in part by the annual income received by such applicant; that the "General Commercial" is that in which said deceased obtained the certificate of insurance; that, to entitle him to obtain a certificate in said class, it is essential, under defendant's rules, that he possess an annual income of not less than $ 750; that, in view of the income of deceased, he was not eligible to said class, but to the "Farmers' and Mechanics' Special," which includes farmers, mechanics and persons whose income is less than $ 750; that members eligible to said class are limited to $ 1,000 for death benefits; that defendant relied on the statement of deceased that his annual income was $ 750 and issued the certificate, relying thereon; that, but for such statement, deceased would not have been received as a member in any other class except the "Farmers' and Mechanics' Special," which limits the recovery to $ 1,000; defendant admits that it is indebted to plaintiff in the sum of $ 1,000, which sum is tendered and an offer to confess judgment is made.
In another division of the answer, it is alleged that the statements before set out in the application as to the income of deceased constituted a warranty, which statement and warranty were false and were known to the said deceased to be false; that his income was but $ 416 per annum; that deceased was not eligible to the class in which he was received, but to another, by which death benefits were limited to $ 1,000; that the warranty has been breached by the statements referred to, which it is alleged were false and untrue; and that, therefore, the certificate has no binding effect upon this defendant, and defendant denies that it is indebted to plaintiff in any sum whatever.
Plaintiff's motion for a directed verdict was upon the following grounds:
"(1) The defendant has failed to prove or to offer any evidence upon which the jury could find that the applicant for this insurance falsely stated or fraudulently, or either, his total annual income; (2) that the question of the amount of his income, total annual income, is wholly immaterial to the right of the recovery of the benefits provided in the contract in the event of the death of the applicant; (3) that the contract evidenced by the certificate, on its face and by its terms, makes no reference whatever to any classification of risks and makes no reference whatever to any by-laws, rules or regulations of the company, and there is no evidence of any knowledge whatever on the part of the applicant that there were any by-laws, rules and regulations that have any effect whatever or any relation whatever as to the question of his total annual income."
The motion was sustained, and a verdict directed for plaintiff for $ 2,000, with interest, or a total of $ 2,120, upon which judgment was entered, with costs.
1. To sustain its contention that the statement before referred to as to the income of the insured is a warranty, appellant cites Cooley's Briefs on the Law of Insurance, Vol. 3, page 1935, and Nelson v. Nederland Life Ins. Co., 110 Iowa 600; while appellee contends that statements in an application for insurance will be considered representations whenever there is room for doubt, and will not be considered warranties unless expressly agreed upon as such by the terms of the policy itself, particularly when they relate to matters of opinion, citing: Alabama, etc., Co. v. Johnson, (Ala.) 2 So. 125; McClain v. Provident Savings Life Assurance Society, 110 F. 80; Royal Neighbors v. Wallace, (Neb.) 89 N.W. 758; Miller v. Mutual Benefit Life Ins. Co., 31 Iowa 216; Moulor v. American Life Ins. Co., 111 U.S. 335 (28 L.Ed. 447, 4 S.Ct. 466); Rogers v. Phenix Insurance Co., (Ind.) 23 N.E. 498; Northwestern Mut. Life Ins. Co. v. Woods, (Kans.) 39 P. 189; Weisguth v. Supreme Tribe of Ben Hur, (Ill.) 112 N.E. 350; Houghton v. Manufacturers' Mut. F. Ins. Co., 8 Metc. (Mass.) 114; Lynchburg Fire Ins. Co. v. West, 76 Va. 575; Merchants, etc., Co. v. Schroeder, 18 Ill.App. 216.
It seems to be well settled that the distinction between warranties and representations in insurance contracts is that a warranty must be true in fact, and, although not fraudulently made and not material to the risk, nevertheless if it is shown to have been false in fact, the contract will be avoided, while a representation will not avoid the policy if the representation is substantially true and made in good faith. It is usually to the advantage of the insurer to consider all statements as warranties, and of the insured to make them representations. Some of the courts state the rule substantially like this: That the courts, being strongly inclined against forfeitures, will construe all the conditions of the contract and the obligations imposed, liberally in favor of the assured and strictly against the insurer; that it requires clear and unequivocal language to create a warranty, and every statement or engagement of the assured will be construed to be a representation, and not a warranty, if it be at all doubtful in meaning, or the contract contain contradictory provisions relating to the subject, or be otherwise reasonably susceptible of such construction. In other words, the courts will lean against that construction of the contract which will impose upon the assured the burden of a warranty, and will neither create nor extend a warranty by construction. That, even though a warranty in name or form be created by the terms of the contract, its effect may be modified by other parts of the policy, or of the application, including the questions and answers. The policy in the...
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