Nat'l Aid Life Ass'n v. Clinton

• Decision Date: 20 December 1935
• Docket Number: Case Number: 24910
• Citation: 55 P.2d 781,1935 OK 1216,176 Okla. 372
• Parties: NATIONAL AID LIFE ASS'N v. CLINTON.
• Court: Oklahoma Supreme Court

1935 OK 1216

55 P.2d 781

176 Okla. 372

NATIONAL AID LIFE ASS'N v. CLINTON.

Case Number: 24910

Supreme Court of Oklahoma

Decided: December 20, 1935

Syllabus

¶0 1. INSURANCE--ACTION ON LIFE POLICY--Insurer Estopped to Defend on Ground of False Answers Inserted in Application by Insurance Agent.

When an insured, in making application for a contract of insurance, reveals to, the agent of the insurance company the correct answers to questions contained in the application, and the agent, who, acting within the scope of his authority or in the course of his employment, fills out the application blank, and. unknown to the insured and in the absence of circumstances which should arouse his suspicion, inserts in the application incorrect answers to the questions contained therein, the knowledge of the agent is imputed to the insurance company. If such company thereafter enters into a contract of insurance upon the application and collects premiums on such contract, it is estopped from asserting as a defense to a claim arising under the policy that the answers contained in the written application were incorrect. The result is the same regardless of the ability of the insured to read and write and regardless of the presence of restrictive provisions in the application limiting the authority of the agent.

2. ESTOPPEL--Sufficiency of Pleading to Entitle Pleader to Benefits of Law.

If the facts constituting an estoppel are sufficiently pleaded, the pleader is entitled to the benefit of the law arising therefrom.

3. INSURANCE--Policy not Invalidated by Misstatement of Fact not Strictly Material.

A misstatement of fact not strictly material in an application for insurance upon which a policy has been issued in which the statements contained are warranties as distinguished front representations does not enable the insurance company to avoid the policy when the application expressly limits the misstatements of fact which will avoid the contract to misstatements of material matters.

4. APPEAL AND ERROR--REVIEW--Assignment of Error Unsupported by Authority.

An assignment of error unsupported by authority will not be considered in this court unless it is apparent without further research that the assignment is well taken.

Appeal from District Court, Garfield County; O. C. Wybrant, Judge.

Action by George W. Clinton against the National Aid Life Association. Judgment for plaintiff, and defendant appeals. Affirmed.

McKeever, Elam, Stewart & McKeever and Snyder, Owen & Lybrand, for plaintiff in error.

Otjen & Carter, for defendant in error.

BUSBY, J.

¶1 On October 27, 1932, George W. Clinton, as plaintiff, on consideration of a jury, recovered judgment in the district court of Garfield county, Okla., against the National Aid Life Association, as defendant, upon a $ 1,000 life insurance benefit certificate issued upon the life of his wife, Amanda C. Clinton, who had died in June of 1930.

¶2 The insurance company presents the case for review, appearing herein as plaintiff in error. We shall refer to the parties in the order of their appearance in the trial court.

¶3 The principal question presented in this appeal is: Does the insertion in a signed written application for insurance by the insurance company's agent of false answers to questions correctly answered by the insured excuse the company from liability on the policy? Particular phases of this general question which are herein involved will be subsequently mentioned and considered.

¶4 Since this is a law case which was tried to a jury resulting in a verdict and judgment in favor of the plaintiff, the evidence of the plaintiff, if competent and material, will be treated as true for the purpose of this appeal, and reference to conflicts in the evidence will, in most instances, be avoided in this opinion.

¶5 On the 13th day of December, 1924, an agent of the defendant company went to the home of the plaintiff and his then living wife for the purpose of selling insurance. In addition to Mrs. Clinton there were present at the time the plaintiff and Elizabeth Clinton, daughter of the plaintiff.

¶6 After a preliminary sales talk in which the advantages of the protection afforded by insurance were explained by the agent, Mrs. Clinton was induced to seek a policy or benefit certificate with the defendant company The agent then produced an application blank and preceded to fill in the answers to the interrogatories therein contained. All of the writing on the application except the signature thereon was done by the agent. At the time Mrs. Clinton advised the agent that she had been previously rejected for insurance; that she had had stomach trouble for several years culminating in hospital treatment in 1923 and 1924. That after the hospital treatment she had been pronounced cured and had been in good health as far as she knew since her discharge from the hospital. The agent advised her that the history as given "didn't make any difference" in the insurance he was writing and proceeded to fill out the application. In this application the agent in inserting the answers to interrogatories, among other things, stated in substance that the applicant had never been rejected for life insurance; that she had not had any disease affecting her stomach; and that she had not consulted or been treated by a physician during the two years preceding the application. Mrs. Clinton also correctly gave her height to the agent as 5 feet 8 inches, her weight as 165 pounds and her date of birth March 16, 1879 (making her age 45 at the time the application was written). The agent incorrectly inserted in the application age 44, weight 115, height 5 feet 3 inches.

¶7 During the time the application was being filled out by the agent those present could see the agent writing, but did not observe what he was writing. When the instrument lead been filled out Mrs. Clinton affixed her signature on a line indicated by the agent apparently without making any examination of the contents of the instrument.

¶8 A certificate appended to the application and signed by the agent certified that the questions therein contained had been separately asked and the answers therein contained given by the applicant. It likewise certified that the applicant had been advised that the statements in the application were in the nature of warranties and that an untrue statement of a material fact would avoid the policy. It also certified that in the opinion of the agent the applicant was a desirable risk.

¶9 A benefit certificate (policy) was issued without medical examination on the application on December 19, 1924, and delivered to the insured. A copy of the application was not attached to the policy. Assessments (premiums) were thereafter paid in full until the death of the insured some six years later. During the major portion of this time the insured, according to the testimony of the plaintiff, was apparently enjoying good health. She died from causes similar to those suffered by her in 1923 and 1924.

¶10 The insurance company complains of the admission of tire evidence showing that truthful answers were given by the applicant and incorrect answers inserted in the application by the agent, and asserts that this evidence should have been ignored by the trial court and the jury instructed to return a verdict in favor of the defendant company. Complaint is also made of the submission of the issue to the jury as a question of fact. These complaints present the question previously stated in this opinion. Does the insertion in a signed written application for insurance by the insurance company's agent of false answers to questions correctly answered by the insured excuse the company from liability on the policy ?

¶11 In presenting its case the defendant places reliance upon the United States Supreme Court case of New York Life Insurance Co. v. Fletcher, 117 U.S. 519, 29 L. Ed. 934, 6 S. Ct. 837, and the Oklahoma cases of Deming Investment Co. v. Shawnee Fire Ins. Co., 16 Okla. 1, 83 P. 918 (a case involving waiver in which the principles of estoppel relied upon in this case by the plaintiff were not applied by reason of failure to properly plead the same), and Liverpool, L. & G. Ins. Co. v. T. M. Richardson Lumber Co., 11 Okla. 585, 69 P. 938, a case arising in territorial days and decided by this court upon principles by which we were then governed, but which have since been repudiated or modified. Sea Western National Ins. Co. v. Marsh, 34 Okla. 414, 125 P. 1094; New York Life Ins. Co. v Smith, 133 Okla. 256, 271 P. 1037. We deem it unnecessary to encumber this opinion by reiterating or restating the reasons those decisions are not longer applicable.

¶12 The controlling principles are found in the later decisions of this court. In the case of Security Benefit Ass'n v. Green, 103 Okla. 284, 229 P. 1061, it was said by this court in paragraph 2 of the syllabus:

"The agent. who is acting within the scope or apparent scope of his authority in asking the applicant questions about his health, and in writing down the answers, is presumed to know what his principal desires. The agent who prepares the application for insurance from the answers of the applicant. which he declares to be satisfactory and receives the premium for the insurance, binds his principal by the delivery of the contract of insurance. The insured has the right to believe, under the circumstances, that the contract he is receiving from the company gives him the indemnity for which he has paid his money. The acts of the agent will operate as an estoppel against the principal to plead the erroneous answers as false representations by the insured."

¶13 And in the body of the opinion in the same case we stated:

"If the agent is acting within the scope of his authority in preparing an application for the insured, and deduces erroneous answers from the statements of fact made to him by the applicant, the acts of the agent are binding on the insurance company. In an action by the

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