New York Life Ins. Co. v. Horton

• Decision Date: 24 February 1938
• Docket Number: 8 Div. 810.
• Parties: NEW YORK LIFE INS. CO. v. HORTON.
• Court: Alabama Supreme Court

180 So. 277

235 Ala. 626

NEW YORK LIFE INS. CO. v. HORTON.

8 Div. 810.

Supreme Court of Alabama

February 24, 1938

Rehearing Denied April 21, 1938.

Appeal from Circuit Court, Colbert County; Chas. P. Almon, Judge.

Action on a policy of life insurance by Ruth S. Horton against the New York Life Insurance Company. From a judgment for plaintiff, defendant appeals.

Reversed and remanded.

A. H Carmichael, of Tuscumbia, and Stokely, Scrivner, Diminick &amp Smith, of Birmingham, for appellant.

J. Foy Guin, of Russellville, for appellee.

KNIGHT Justice.

Suit upon a policy of insurance, and the appeal is from a judgment in favor of the plaintiff.

The plaintiff stated her cause of action in one count, 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 $129.91; 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 appellant on June 2, 1927, issued to James M. Horton, its policy of insurance on the life of said Horton, with the plaintiff, his wife, as the beneficiary therein. Originally, the face amount of the policy was $5,000, but at a later date, by agreement, the face amount was reduced to $2,500.

As originally written, the policy provided for the payment of the premiums on an annual basis, such premiums being due and payable on June 2d, in each year. The payment of premiums was subsequently changed to a quarterly basis, so that thereafter the payment became due and payable on June 2d, September 2d, December 2d, and March 2d, in each year.

It is without dispute in the evidence that the insured permitted his policy to lapse on two occasions for nonpayment of the quarterly premiums. The premium due on September 2, 1935, was not paid on that day, nor was it paid within the grace period, and as a result thereof the policy lapsed. The premium due on December 2, 1935, was not paid on that date, nor within the grace period, and the policy again lapsed.

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 the 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 policy contained, among other provisions, the following provision as to reinstatement:

"Reinstatement.--This policy may be reinstated at any time within five years after any default, upon written application by the insured and presentation at the Home Office of evidence of insurability satisfactory to the Company and upon payment of overdue premiums with five percent interest thereon from their due date. Any indebtedness to the Company at date of default must be paid or reinstated with interest thereon in accordance with the loan provisions of the policy."

The first ground of defense to the suit is based upon the application for reinstatement executed by the insured under date of October 24, 1935, and which was approved on behalf of the company on October 30, 1935, by G. E. Shields, cashier of the Birmingham branch office of the appellant.

The second ground of defense to the action is based upon the application for reinstatement executed by the insured under date of February 15, 1936, and the reinstatement was made on February 19, 1936, Mr. Shields acting for and on behalf of the insurer.

The second application for reinstatement is in the following language:

"Theodore A. Toering, Exhibit No. 2. Ap.

Application to the New York Life

Insurance Company

Home Office:

51 Madison Avenue, Madison Square, New York, N. Y.

For Reinstatement of Policy No. 9876779 Amount, $2,500.

I hereby apply for the reinstatement of the above numbered Policy which lapsed for non-payment of premium due on the 2nd day of December, 1935, and, for the purpose of inducing the Company to reinstate said Policy, I make the representations contained in my answers to the following questions:

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1. Are you now, to the best of your knowledge and belief, Ans.

in the same condition of health as you were when this Yes.

Policy was issued? (If not, give details.)

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2. Within the past two years have you had any illnesses, diseases or Ans.

bodily injuries or

have you consulted or been treated by any physician or No.

physicians? (If so, give full details, including nature, date, and

duration of each illness, disease or injury, the name of each

physician, and the date of and reasons for consultation or

treatment.)

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3. Has any Company or Insurer, within the past two years, examined you Ans.

either on, or in anticipation of, an ap"

plication for life insurance, or for the reinstatement of life No.

insurance, WITHOUT

issuing or reinstating such insurance? (if so, give name of each

Company or Insurer.)

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If the evidence of my insurability is satisfactory to the Company and it has received all sums the Policy requires to be paid for reinstatement, then, and not until then, said Policy shall be deemed reinstated. If said Policy is not so reinstated, I agree to accept return of all sums paid in connection with this application, without interest.

I hereby certify that the foregoing answers are full, complete and true, and agree that the Company believing them to be true shall rely and act thereon.

Dated at Moulton, Ala. this 15th day of Feb. 1936.

Witness Clyde H. Kimbrough

Address T. V. A. Camp, Ala. -11-Martin, Ala.

Signature of Insured James M. Horton

My Post-Office address is Moulton, Ala.

Approved by G. E. Shields, Cashier,

On the ______ day of Bir-Feb 19 1936, 19_____

Received

Birmingham Branch

Feb 19 1936

N.Y. Life Ins. Co.

Ans'd ______."

We do not set out application on which the first reinstatement was had on October 30, 1935, as it is, with exception of dates in substantially the same language as is the second application, and in this opinion we deal largely with the second application.

It is to be noted that in each of his applications for reinstatement the insured stated that, to the best of his knowledge and belief, he was in the same condition of health as he was when the policy was first issued, and that within the past two years he had not had any illness, disease, or bodily injuries, or had not consulted or been treated by any physician or physicians.

It is also to be noted that in his application for the second reinstatement the insured admitted that the policy of insurance had lapsed for nonpayment of premium due on December 2, 1935.

It was the contention of the defendant--appellant--that the insured's statements made in his application for reinstatement on February 15, 1936, were false in a number of material particulars, but the chief or real contention was that the insured misrepresented the condition of his health. It was the defendant's contention that at the time of making the second application for reinstatement the insured was suffering from an incurable malady, to wit, Hodgkins disease, which not only tended to, but did in fact, cause the death of the insured sooner than if he had been free of such disease, and, therefore, the matter misrepresented increased the risk of loss under said policy.

It is insisted by appellant that under the evidence it was entitled to the affirmative charge, and that the court committed error in refusing the charge, which was duly and timely, requested. This is really the only question here argued. The appellant frankly admitted upon the argument of the case that a reversal upon any other point would be of no practical benefit.

The appellee contends that the evidence conclusively establishes that the insured did not know at the time he made the representations contained in either of his applications that he was afflicted with any serious illness, if in fact he was so affected, and that there is no evidence in the case which would justify an inference that in making his statements he had an actual intent to deceive the appellant, and that, therefore, the plaintiff, not the defendant, was entitled to the affirmative charge.

It is true that the misrepresentations relied upon in this case were made, if made at all, in the application for reinstatement of the policy, after it had lapsed, but in the case of Mutual Life Insurance Co. v. Allen, 166 Ala. 159, 51 So. 877, we held that section 4579 of the Code of 1907, now section 8371 of the Code of 1923, as amended by Gen.Acts 1935, p. 194, was broad enough to include any contract or agreement as to the policy, whether it relates to the original policy, or to a renewal, revivor, or reinstatement of the same. Such has been our uniform holding since the Allen Case, supra, was decided.

Section 8364 of the Code provides:

"No written or oral misrepresentation, or warranty therein made, in the negotiation of a

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