N.Y. Life Ins. Co. v. Stagg

• Decision Date: 12 June 1923
• Docket Number: Case Number: 12897
• Citation: 219 P. 362,95 Okla. 252,1923 OK 373
• Parties: NEW YORK LIFE INSURANCE CO. v. STAGG.
• Court: Oklahoma Supreme Court

1923 OK 373

219 P. 362

95 Okla. 252

NEW YORK LIFE INSURANCE CO. v. STAGG.

Case Number: 12897

Supreme Court of Oklahoma

Decided: June 12, 1923

Syllabus

¶0 1. Insurance -- Life Policy -- Construction--Statements of Insured as Representations and Not Warranties.

Where a life insurance policy provides: "All statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties, and no such statement shall avoid the policy or be used in defense to a claim under it, unless it be contained in the written application and a copy of the application is indorsed upon or attached to this policy when issued," the statements by the insured are to be construed as representations and not warranties in the absence of fraud.

2. Same -- Misrepresentations of Insured as Defense--Burden of Proof.

Where a policy of life insurance provides that all statements made by the insured shall, in the absence of fraud, be construed as representations and not warranties, in order for misrepresentations made by the insured in an application to avail the insurer as a defense it must show, not only that the statements were not true, but that they were willfully false, fraudulent, and misleading, and made in bad faith.

3. Trial--Special Findings--Verdict.

Where the special findings do not embrace and cover all the issues in the case and those returned are not necessarily inconsistent with the general verdict, the fact that the incomplete findings are adverse to the successful party will not prevent a judgment in his favor if the issues and facts included in the general verdict and upon which no special findings are made are sufficient to warrant a recovery.

4. Insurance--Action on Life Policy--Misrepresentations as Defense--Instructions.

In a suit on an insurance policy, where it is contended that a false and fraudulent misrepresentation or concealment of a material fact by the insured has rendered the contract for insurance void, and where the evidence is conflicting or where different inferences may be legitimately drawn from the evidence, the question should be submitted to the jury under instructions which take into account the materiality of the misrepresentation and the fraudulent purpose or intent of the insured to deceive.

Error from District Court, Creek County; Harve L. Melton, Assigned Judge.

Action by Anna Stagg against the New York Life Insurance Company to recover on insurance policies. Judgment for plaintiff, and defendant brings error. Affirmed.

Wilson, Tomerlin & Threlkeld and W. C. Hodges, for plaintiff in error.

Thompson & Smith, for defendant in error.

COCHRAN, J.

¶1 This action was brought by defendant in error against the New York Life Insurance Company, plaintiff in error, to recover upon two policies of insurance issued upon the life of Edward R. Stagg. The parties will hereinafter be referred to as plaintiff and defendant as they appeared in the trial court.

¶2 The defendant in its answer alleged that prior to the issuance of the policies of insurance, Edward R. Stagg made a written application for such insurance, and thereafter submitted himself for an examination before the medical examiner of the defendant company, and made certain answers in writing to the questions propounded by the medical examiner, which answers were made a part of the policies thereafter issued; that the company issued the policies of insurance relying upon the truthfulness of the answers contained in the written application and the written answers to the questions propounded by the medical examiner. Defendant further alleged that the representations made by the assured were false, fraudulent, and untrue, and were made with a fraudulent intent.

¶3 The case was tried to a jury and a verdict returned in favor of the plaintiff. Special interrogatories were submitted to the jury by the court and answered as follows:

"Q. Did Edward R. Stagg represent in his application for insurance that he had never suffered from any ailment or disease of the lungs, among other things? A. Yes. Q. Did Edward R. Stagg, within five years next prior to June 23, 1919, consult any physician for any trouble or disease other than the 'flu'? A. Yes. Q. What other diseases other than the 'flu' did Edward R. Stagg consult a physician for at any time within five years prior to June 23, 1919? A. Dizziness, headache and shortness of breach. Q. What physician other than Dr. C. M. Ament did Edward R. Stagg consult within five years next prior to June 23, 1919? A. Drs. Fish and Sweeney?"

¶4 The defendant filed its motion for judgment on the special findings notwithstanding the verdict, which was overruled, and judgment was entered for the plaintiff, from which the defendant has appealed.

¶5 The defendant first contends that the answers made in the written application and upon the medical examination constituted warranties and not representations, and, the jury having found by its special findings that these answers were untrue, judgment should have been rendered in favor of defendant on the special findings notwithstanding the general verdict in favor of the plaintiff. To support this contention, defendant relies upon the decision of this court in Knights and Ladies of Security v. Grey, 70 Okla. 79, 172 P. 933. This case has no application here unless it is determined that the answers made by the assured were warranties instead of representations. The defendant relies upon the following provision of the policy as supporting the contention that the answers made were warranties, to wit:

"I agree, represent and declare, in behalf of myself and of every person who shall have or claim any interest in any insurance made hereunder, that I have carefully read each and all of the above answers, and that they are each written as made by me, and that each of them is full, complete and true to the best of my knowledge and belief I am a proper subject for life insurance. Each and all of my said statements, representations, and answers contained in the application are made by me to obtain said insurance and I understand and agree that they are each material to the risk and that the company believing them to be true will rely and act upon them."

¶6 The above provision of the policy, however, is to be considered in connection with the following provision of the policy:

"All statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties, and no such statement shall avoid the policy or be used in defense to a claim under it, unless it be contained in the written application and a copy of the application is indorsed upon or attached to this policy when issued."

¶7 This court has held that a provision substantially the same as the one just quoted constitutes the answers representations and not warranties. In Reserve Loan Life Ins. Co. v. Isom, 70 Okla. 277, 173 P. 841, the provision of the policy was as follows:

"This policy and the application herefor (a copy of which application is attached hereto) shall constitute the entire contract between the parties hereto. All statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties"

--and the court in construing that provision said:

"The policy itself construes the statements made by the insured in his application as representations and not warranties."

¶8 Such being the holding of this court, the doctrine announced in Knights and Ladies of Security v. Grey, supra, and the cases therein cited, is not applicable, but the rule announced in the cases involving falsity of representations made in procuring the issuance of a policy controls. This rule is announced in Reserve Loan Life Ins. Co. v. Isom. supra, in the following language in the syllabus:

"Where a policy of life insurance provides that all statements made by the insured shall, in the absence of fraud, be construed as representations and not warranties, in order for misrepresentations made by the insured in an application to avail the insurer as a defense it must show, not only that the statements were not true, but that they were willfully false, fraudulent, and misleading, and made in bad faith."

¶9 In the case of Continental Casualty Co. v. Owen, 38 Okla. 107, 131 P. 1084, the court had under consideration the effect of statements made in an application where such statements were held to be representations and not warranties under the provisions of section 3467, Rev. Laws 1910. The policy in that case was issued without a medical examination, and, therefore, by the terms of section 3467, the statements made were, in...