New York Life Ins. Co. v. Zivitz, 6 Div. 900.

• Decision Date: 22 October 1942
• Docket Number: 6 Div. 900.
• Citation: 243 Ala. 379,10 So.2d 276
• Parties: NEW YORK LIFE INS. CO. v. ZIVITZ.
• Court: Alabama Supreme Court

10 So.2d 276

243 Ala. 379

NEW YORK LIFE INS. CO. v. ZIVITZ.

6 Div. 900.

Supreme Court of Alabama

October 22, 1942

Stokely, Scrivner, Dominick & Smith, of Birmingham, for appellant.

Leader, Hill & Tenenbaum and Jas. L. Permutt all of Birmingham, for appellee.

LAWSON, Justice.

Appellee was named beneficiary in a policy insuring the life of her son, Charles Zivitz, who died September 15, 1939, and brought this suit to recover thereon. There was verdict and judgment for plaintiff, from which defendant appeals.

The cause of action was stated by the plaintiff in one count which was in Code form, and the pleadings thereto were in short by consent, the general issue, with leave to give in evidence any matter which, if well pleaded, would be admissible in defense of the action, to have effect as if so pleaded, including a plea of tender in the sum of $30.49; and with like leave to the plaintiff to give in evidence any matter which, if well pleaded, would be admissible in reply to such defensive matter, to have effect as if so pleaded.

The policy and the application therefor, a copy of which is attached thereto, constituted the entire contract between the insurer and insured by the terms of the contract, and the policy further provided that: "All statements made by the Insured shall, in the absence of fraud, be deemed representations and not warranties, and no statement shall avoid this Policy or be used in defense to a claim under it unless it is contained in the written application and a copy of the application is indorsed upon or attached to this Policy when issued."

The sole defense interposed by the defendant was that misrepresentations were made in the written application, in response to which the policy made the basis of this suit was issued, a copy of which application was attached to, and made a part of said policy of insurance, which misrepresentations materially increased the risk of loss under said policy.

It is the contention of the appellee, plaintiff below, that there were no misrepresentations in the application which could have materially increased the risk of loss, if relied upon by the insurer. The appellee also contends that, although there might have been misrepresentations upon which the appellant, the insurer, might have had a right to rely, it did not, in truth and in fact, actually rely thereon to a material extent because the application showed on its face that it was made by an eleven-year- old boy, and that it was for the jury to determine whether or not reliance was had on the contents of the application.

Misrepresentations made in an application for insurance will not defeat or void a policy of insurance unless it appears that: (1) The representations were false; (2) they were made either with the actual intent to deceive, or unless the matter misrepresented increased the risk of loss; and (3) the insurer relied upon them to his prejudice. Sovereign Camp, W. O. W., v. Moore, 232 Ala. 463, 168 So. 577; Metropolitan Life Ins. Co. v. Chambers, 226 Ala. 192, 146 So. 524.

The application for the insurance was signed on March 13, 1939. The policy was issued on March 21, 1939, with a provision therein to the effect that it was issued in consideration of the application therefor, a copy of which was attached to and made a part of the contract of insurance. The contract itself shows that the application was an inducement to the issuance of the policy of insurance. There is nothing in the evidence to indicate otherwise, unless it can be said that the mere fact that the application shows on its face that it was signed by a minor refutes the statement in the policy that it was issued in consideration of the application. We do not think this to be so. Misrepresentations need not be the sole inducement to the contract, nor the chief influence leading to action. It is enough if, as a contributory influence, they operate upon the mind and conduct of the other party to any material extent. Reliance Life Ins. Co. v. Sneed, 217 Ala. 669, 117 So. 307; Metropolitan Life Ins. Co. v. Dixon, 226 Ala. 603, 148 So. 121.

It has been held in several Rhode Island cases that an infant is not bound by his warranties in an application for life insurance, and that a beneficiary who has made no statements and did not procure the policy with knowledge of the falsity of the matters warranted is not precluded or estopped from recovering on the policy upon the minor's death. O'Rourke v. John Hancock Mutual Life Ins. Co., 23 R.I. 457, 50 A. 834, 57 L.R.A. 496, 91 Am.St.Rep. 643; Keenan v. John Hancock Mutual Life Ins. Co., 50 R.I. 158, 146 A. 401; Monast v. Manhattan Life Ins. Co., 32 R.I. 557, 79 A. 932.

The subject of representations and warranties made by infants in insurance applications is discussed generally in Couch's Cyclopedia of Insurance Law, Vol. 4, § 823, in the following language: "§ 823. Representations and warranties by infant.-Applying the theory that, since an infant may repudiate his contracts, representations and warranties by an infant are not binding upon him during infancy, it has been held in Rhode Island that while, as a general rule, the defense of infancy is a personal privilege, still, if the contract purports to have been made with a minor, a beneficiary who has made no statements, and did not procure the policy with knowledge of the falsity of the matters warranted, is not precluded or estopped from recovering on the policy upon the minor's death. Notwithstanding this decision, we fail to comprehend why a warranty by an infant constitutes, when false, no defense to an action by the beneficiary to recover upon the policy in a case of this character. And, as a matter of fact, support in insurance law for a contrary conclusion is found in a Kansas case, in which the court, in holding that a beneficiary cannot disaffirm a warranty on the ground that the applicant was a minor, and at the same time enforce the policy, expressly disapproved the Rhode Island decision. And, in New Jersey, it has been expressly held that a false and fraudulent representation as to a material fact, made by an infant over fifteen years of age in procuring life insurance, constitutes a defense good as against the beneficiary, the insured having died before attaining majority."

The case of Metropolitan Life Ins. Co. v. Brubaker, 78 Kan. 146, 96 P. 62, 65, 18 L.R.A.,N.S., 362, 130 Am.St.Rep. 356, 16 Ann.Cas. 267, expressly disapproves the Rhode Island rule. It is there said: "The insured was a minor when the contract was made and at the time of his death. In the case of O'Rourke v. John Hancock Life Ins. Co., 23 R.I. 457, 50 A. 834, 57 L.R.A. 496, 91 Am.St.Rep. 643, the court held a minor is not bound by the warranties contained in a contract for life insurance, but that the policy is nevertheless enforceable against the insurer. In this state a minor is bound, not only by contracts for necessaries, but also by all other contracts, unless he disaffirms them within a reasonable time after he attains his majority. If he disaffirm, he must restore to the other party all money or property received by him, by virtue of the contract, and remaining within his control. Gen.St.1901, § 4183. This contract was not disaffirmed by the minor. It is binding upon him until disaffirmed, and the court knows of no one who can exercise the right to disaffirm except the minor. But if the plaintiff be allowed to represent the minor, the same consequences must follow as if the minor had acted. The contract of insurance is an entirety, and the statute gives the minor no right to disaffirm provisions which he finds burdensome, and to enforce those which are to his advantage. If any material portion of the contract be disaffirmed, unexecuted provisions fall. The warranty is an integral part of the contract. It is an indispensable condition of liability on the part of the insurer. If the warranty be disaffirmed, liability on the contract must necessarily be destroyed. The contract cannot be disaffirmed, and then money be taken from the company by virtue of the contract, when the return of such money, if it were in the minor's hands, would be a necessary element of disaffirmance. The Rhode Island case is disapproved."

To like effect is the case of Prudential Ins. Co. of America v. Ordonoff, 122 Pa. Super. 485, 186 A. 391.

We prefer the rule laid down in the Kansas and Pennsylvania cases and we, therefore, hold that where the evidence shows that a contract of insurance was issued in consideration of the application therefor, the mere fact that the application was signed by an infant is not evidence of the fact that the application was not relied on by the insurer as an inducement to the issuance of the contract.

We believe, however, that the evidence in this case, in all events, precludes the beneficiary from relying on the fact that the representations were made by an infant, even under the Rhode Island rule.

On March 13, 1939, Dr. Greene Smith, a medical examiner on the approved list of the insurer, called at the drug store operated by Nathan Zivitz, the father of the insured. He there made a physical examination of insured and asked those questions contained in Part II of the Application for Insurance, some of which questions are hereafter set out. There is very little in the evidence to indicate that any of the questions were answered by the insured, although his father stated that he (the insured) might have answered one or two of them. It is clear to us from the evidence that the questions were answered by Mr. and Mrs. Zivitz, who were both present during the examination. However, after the examiner had recorded the answers made by Mr. and Mrs. Zivitz to the questions, the application was signed by Charles Zivitz, the insured, who, under the...