Northwestern Life Assur. Co. v. Tietze

• Decision Date: 02 April 1901
• Parties: NORTHWESTERN LIFE ASSUR. CO. v. TIETZE.
• Court: Colorado Court of Appeals

64 P. 773

16 Colo.App. 205

NORTHWESTERN LIFE ASSUR. CO. v. TIETZE.

Court of Appeals of Colorado

April 2, 1901

Appeal from district court, Arapahoe county.

Action by Max Tietze against the Northwestern Life Assurance Company on a policy. From a judgment in favor of plaintiff, defendant appeals. Reversed.

Tyson S. Dines and O.L. Dines, for appellant.

A.P Rittenhouse and W.T. Jenison, for appellee.

WILSON, J.

On February 15, 1895, the Northwestern Masonic Aid Association to whose rights the defendant corporation succeeded, and whose obligations it assumed, issued a policy of insurance upon the life of Mrs. Pauline Tietze, then wife of the plaintiff, who was the beneficiary in the policy. On February 15, 1896, the assured failing to make a payment then due, the policy lapsed, but in a few days thereafter the assured was reinstated in the company, upon compliance with its by-laws. On the 15th day of August, 1896, the assured again failed to make the payment due on that date, but on the 18th day of August following was again reinstated. On May 12, 1897, Mrs Tietze, then being in good standing with the company, died. The defendant refusing to pay the amount specified in the policy, this suit was brought to enforce payment. The defense was that the insured had, in her original application for insurance, and in her several applications for reinstatement made false statements as to her health, of such character as to annul and void the policy. The proximate cause of death seems to have been pneumonia, but the defendant claims that at the time of the original application for insurance, and at each of the subsequent times when the assured applied for and received reinstatement, and particularly so between the dates of her first and second reinstatements, she was afflicted with consumption; the fact of which was well known to her and to the plaintiff at the time when she made such applications. Another ground relied upon to defeat the policy was that many times prior to the date of the original application, and particularly during the year 1894, immediately preceding it, the assured had been confined to her house from sickness, and for which she had at various times called and consulted physicians; all of which, it is claimed, she had denied in her application. What is claimed to have been the original application was printed and written upon three pages of one sheet of four pages. At the head of the first page was printed, "Woman's Application for Membership." Following this was the formal application, stating the amount of insurance and the plan. Following this was printed, in large type, "Form A." Immediately succeeding this, and underneath it, were numerous printed questions, which were filled out and answered, and the whole signed by the applicant. At the head of the second page was printed, "To the Medical Examiner." Under this were printed two lines of instructions to the medical examiner, and then followed, printed in large type, "Form B. Questions to be answered by the applicant. The answer to be written by the medical examiner or applicant in all cases." Then followed a large number of questions as to the assured's ancestry; what diseases, if any, they had suffered or died from; and also what diseases, if any, the applicant had ever had. Following this, on the third page, was printed in large type what was entitled "Agreement." That portion of this agreement which bears upon, or is material to, the determination of this case, and also printed under the above caption, is as follows: "I, the undersigned, hereby agree that each and all of the foregoing statements and answers in forms A and B, whether written by me or not, are full and complete answers to the questions propounded, and are material, and are warranted to be true, and that the foregoing application, and this agreement, are hereby made part of any policy that may be issued pursuant thereto." This agreement was signed by the applicant. Then followed a certificate by the medical examiner to the effect that the applicant had answered all questions, explained all diseases, and signed the agreement, and also that the general appearance of the applicant at that time was healthy, and giving some facts as to the pulse rate, respiration, measurement of chest, etc. The application was dated January 23, 1895.

We agree with counsel for the defendant that forms A and B constitute the application, and that the answers and statements made in each are part of it. Form B contained questions and answers which were, it is obvious, most material to the risk, and which the company must consider before it would undertake to issue a policy. It seems, also, beyond dispute that such was the understanding and intent of the parties. In the agreement printed on the third page, and which the assured signed, all which preceded it, being the statements and answers in both forms A and B, she specifically referred to as "the foregoing application." It made no distinction between the two.

The material and decisive questions raised and discussed by counsel are whether the agreement signed by the applicant was a part of the policy which was the contract of insurance; whether the statements contained in the application were warranties or representations; and, in either case, what was their effect. These questions are so closely allied that they may be considered at one and the same time, without a separate discussion of each. That the so-called "agreement" was not, and was not intended to be, nor considered as, a part of the application is clearly evidenced by a mere inspection of it. In the first sentence of it, which we have quoted, it refers to the application and the agreement as separate and distinct instruments, the language being: "The foregoing application and this agreement are hereby made part of any policy," etc. Under no rule of legal or grammatical construction of which we are aware could it be said that under this statement the two were intended to be considered only as one, or that the agreement should be embraced in, and become a part of, the application. The only language in the policy which has any bearing upon the questions under consideration is as follows: "In consideration of the application for membership in this association, which is made a part of this contract, and of the advance payment of twenty-three and 24/100 dollars on the delivery hereof, and like advance payments to be made on or before," etc. Here it will be seen that in this, which is the contract, and only contract, of insurance, there is no reference whatever to the agreement. This, therefore, was not, and did not become, a part of the policy.

With reference to what are warranties and what are representations in an application for a policy of life insurance, and what is the force and effect of each, it will be found, upon an inspection of the authorities, that the courts of various states, under the hypnotism of learned counsel, have indulged in many hair-splitting distinctions, many of which do not, in our opinion, bear the test of sound reasoning or good common sense. There are, however, certain fundamental principles upon which the authorities are practically agreed. One is that warranties are not to be created or extended by construction; they must arise, if at all, from the fair interpretation and clear intendment of the words used by the parties. They are not favored, and, if there be any doubt as to the character of the statement, it should be held to have only the force of a representation, according to the general rule. Campbell v. Insurance Co., 98 Mass. 391; May, Ins. §§ 159-164, citing a large number of authorities. It is also an inflexible rule...