Nat'l Life & Accident Ins. Co. v. Nagel

• Decision Date: 06 December 1932
• Docket Number: No. 182.,182.
• Citation: 245 N.W. 540,260 Mich. 635
• Court: Michigan Supreme Court
• Parties: NATIONAL LIFE & ACCIDENT INS. CO., Inc., v. NAGEL.

260 Mich. 635

245 N.W. 540

NATIONAL LIFE & ACCIDENT INS. CO., Inc.,

v.NAGEL.

No. 182.

Supreme Court of Michigan.

Dec. 6, 1932.

Appeal from Circuit Court, Wayne County, in Chancery; John Simpson, Judge.

Suit by the National Life & Accident Insurance Company, Inc., against Helen Nagel, who filed a cross-bill. Decree for defendant, and plaintiff appeals.

Reversed and rendered.

Argued before the Entire Bench.Oxtoby, Robison & Hull, of Detroit, for appellant.

Ernest P. LaJoie, of Detroit, for appellee.

WIEST, J.

Plaintiff's bill to cancel reinstatement of a policy of insurance on the life of Julius Henry Nagel, for breach of warranty of physical condition and false and fraudulent representations relating thereto, was, upon hearing, dismissed, and recovery of the insurance awarded Helen Nagel, beneficiary, under her cross-bill.

The policy was issued in July 1925, reinstated in July, 1927, and in August, 1929, and again in February, 1931. The insured died in a sanitarium August 28, 1931; the cause of his death being chronic pulmonary tuberculosis.

An agent of the insurance company visited the insured at his home in February, 1931, and the insured signed the application for reinstatement. The beneficiary claims that the application was signed in blank, and the trial judge so found.

Be that as it may, the fact is admitted by the beneficiary that the agent asked the insured if he was then in good health, and the insured answered that he was, but ‘was just getting over the flu.’ The insured had been under a doctor's care, but, at the time of reinstatement, neither he nor the doctor was aware of the fact that he had pulmonary tuberculosis. The representation that he was in good health, except that he was just getting over the flu, was not true in fact, but believed by the insured to be true. This representation was in the printed form of the application for reinstatement, with space left for exception, and in this space the agent wrote ‘no exception.’ Had the agent put in the exception that the insured was just getting over the flu, it would not benefit plaintiff.

We find no intentional fraud on the part of the insured. We do find, as a fact, that, when he stated he was in good health, except that he was just getting over the flu, he then had chronic pulmonary tuberculosis. Does that fact command cancellation of the reinstatement of the policy? This depends upon whether the statement regarding his health was a warranty by the insured or a misrepresentation sufficient to void action taken by the insurer on the strength thereof.

The distinction between a warranty and a representation was well pointed out in Eastern Dist. Piece Dye Works, Inc., v. Travelers' Ins. Co., 234 N. Y. 441, 138 N. E. 401, 403, 26 A. L. R. 1505. The statute of New York (Insurance Law [Consol. Laws, c. 28] § 58) provided that: ‘Every policy of insurance issued or delivered * * * by any life insurance corporation doing business within the state shall contain the entire contract between the parties; * * * and all statements purporting to be made by the insured shall in the absence of fraud be deemed representations and not warranties.'

The Michigan statute, Comp. Laws 1929, § 12427, requires a provision in insurance policies that: ‘All statements made by the insured, shall, in the absence of fraud, be...