Northwestern Mut. Life Ins. Co. v. Woods

• Decision Date: 09 February 1895
• Citation: 39 P. 189,54 Kan. 663
• Parties: THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY v. MARY M. WOODS
• Court: Kansas Supreme Court

39 P. 189

54 Kan. 663

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY v. MARY M. WOODS

Supreme Court of Kansas

February 9, 1895

Error from Pawnee District Court.

THIS action was brought by Mary M. Woods on a policy of insurance issued by the defendant on the life of Charles H. Woods, her husband, who died at Hutchinson, on March 15, 1888. The execution of the policy and the fact of the death of the assured were admitted, but the answer of the defendant alleges that the policy was based on an application made by the deceased, in which certain untruthful statements were made by him, as follows:

"Ques. 19. How long since you consulted any physician? For what disease? Give name and residence of such physician. Ans. Three years ago; typhoid fever; good recovery; Doctor Batinff, Ashtabula, Ohio."

"Q 25. Is there anything, or has there ever been anything, in your physical condition, family, or personal history, or habits, tending to shorten your life, which is not distinctly set forth above? A. No."

The policy contained the following provisions:

"Third. If any statement made in the application for this policy shall be found incorrect, this policy shall be void Provided, That if the age has been given correctly, and death shall occur later than three years from the date hereof, and if this policy shall not have been declared void by the company prior to such death, the liability of the company shall not after such death be disputed on account of such statement, except in case of fraud."

The application and policy bear date August 17, 1886. The answer alleges that the said Charles H. Woods had, on January 1 1886, contracted a severe cold, which settled on his lungs that he gradually grew worse from said date until his death, March 15, 1888, which resulted from consumption, caused by said cold. It is also alleged that at the time of the execution of said policy said Charles H. Woods was sick with catarrh and consumption, and continued so until his death. As a further defense, the answer states that on the 15th day of May, 1888, the defendant settled said loss with the plaintiff, and paid her the sum of $ 71.17; that in consideration thereof she surrendered and canceled the policy. The plaintiff replied, alleging that the policy and the receipt indorsed thereon were obtained from her by the agent of the insurance company through fraud and imposition, and by means of false statements. The plaintiff brought into court and tendered a return of the check which had been given to her at the time of the alleged settlement. The jury rendered a general verdict in favor of the plaintiff for $ 1,151.47. A new trial was denied, and judgment on the verdict rendered for the plaintiff, and for costs. The defendant company brings the case here.

J. B. Johnson, and Keeler & Welch, for plaintiff in error:

It seems to us that the material errors of the district court against the company are palpable and beyond dispute. The chief of these errors in the instructions are:

1. Instructing the jury in effect that, even if the said answer to said question 19 was false, its falsity could not constitute a defense for the company unless such answer was also willfully false.

2. Instructing the jury in effect that, even if Woods, in his application for insurance, falsely stated that he had not been recently treated by a physician, when in fact he had been recently under such treatment, yet such false statement could not be used to avoid the policy unless he died from a continuance of the identical disease or diseases for which he had been so treated.

3. Instructing the jury so that it might conclude that it could not find a verdict for the defendant for any reasons unless it found Woods's answer to said question 19 to be willfully false, and that he died from a continuance of the disease or diseases for which Doctor Malcolm had treated him.

4. Instructing the jury in effect that if said question 19 was answered truly, it was immaterial whether said question 25 was answered truly or not.

5. Instructing the jury in effect that the settlement was not binding upon Mrs. Woods unless when she made it she was "fully apprised of her rights."

6. Refusing to instruct the jury that, if the said answer to said question 19 was false, then Mrs. Woods could not recover.

7. Refusing to instruct the jury that the application was made a part of the contract of insurance, and that the answers in the application were by Mr. and Mrs. Woods warranted to be true.

8. Refusing to instruct the jury that, by the terms of the policy of insurance, it was void if any of the answers in the application were untrue.

"A warranty in the law of insurance is a statement or stipulation inserted or referred to in and made a part of the policy upon the truth or performance of which upon the part of the insured the validity of the contract depends." "The effect of a warranty is to make void the policy, if the statements made are not literally true, . . . without regard to their actual materiality, the willfulness of the falsity or unobservance, or the cause of loss."

These propositions are fully established by numerous authorities cited in 11 Am. & Eng. Encyc. of Law, p. 291 (n. 1, 4), p. 292 (n. 1, 2, 3, 4), and on p. 293 (n. 2). It seems entirely unnecessary to extend this brief by a review of these authorities. Two of them, to wit, Linz v. Mass. Ins. Co., 8 Mo.App. 363, and Maine Ben. Ass'n v. Park, 16 A. 339, seem to be particularly applicable to the facts of this case.

Houk & Whitelaw, for defendant in error:

The court below, in charging the jury, doubtless proceeded upon the theory that the statements of the assured contained in the policy and in the application were not warranties, but representations, and that in making such statements it was sufficient if the assured exercised honesty and good faith. We think the court proceeded on the correct theory, and that there was therefore no error in the charge, and no error in the refusal of the court to charge the jury as requested by the defendant company. The statement of the agent, in taking the deceased's application, that he did not expect the deceased to tell of any slight cold or little pains, "he did not expect him to recite every slight pain and everything in that line," would clearly indicate that the agent himself only expected and intended that the assured should make his answer honestly and in good faith. The case of Mouler v. Insurance Co., 111 U.S. 335, contains a very able and full discussion of the law of this case. See, also, Jeffries v. Insurance Co., 89 U.S. 833; Insurance Co. v. France, 91 id. 510; National Bank v. Insurance Co., 95 id. 678; Grace v. Insurance Co., 109 id. 934; Insurance Co. v. Rundell, 34 N.E. 588; Insurance Co. v. Pearce, 39 Kan. 405; Protective Union v. Gardner, 41 id. 397.

Under the circumstances, it may be well said that the mind of Mrs. Woods, unless "she was fully apprised of all her rights of recovery," was not able to act, nor left free to decide upon the considerations addressed to it, these considerations including persuasions and false promises of the payment of money to her, and what was, no doubt, of greater importance, covert threats of family disgrace and aspersions upon the memory of the dead.

These things, to say the very least, imply a moral coercion exerted upon Mrs. Woods which made the act of assent not hers, but that of another. In Pomeroy's Equity Jurisprudence, §§ 950 and 951, it is said: "Courts of equity undoubtedly grant relief in many classes of instances where there is no legal duress, and where the wronged party would, perhaps, be remediless at the common law; but these cases properly belong to the head of undue influence." See, also, to the same effect, Story's Equity Jurisprudence, § 250, and McDonald v. Wilson, 2 Cow. 139.

ALLEN J. All the Justices concurring.

OPINION

ALLEN, J.:

It is urged on behalf of the insurance company that the statements contained in the application are warranties, and that, in case such statements were not strictly and literally true, the policy may be avoided. In support of this contention, the cases of Linz v. Insurance Co., 8 Mo.App. 363, and Benefit Association v. Parks, 16 A. 339, are cited. The first case named cites no authorities on this question, and gave it apparently but slight consideration, as the decision turned on a question of evidence. The other case, decided by the supreme court of Maine, was an action brought to annul a policy before the death of the assured. This case can hardly be said to support the contention of the plaintiff in error. On the other hand, we have the decision of the supreme court of the United States in the case of Moulor v. Insurance Co., 111 U.S. 335, which was an action on a policy of insurance which contained the following provision:

"It is hereby declared and warranted, that the above are fair and true answers to the foregoing questions, and it is acknowledged and agreed by the undersigned that this application shall form part of the contract of insurance, and that if there be in any of the answers herein made any untrue or evasive statements, or any misrepresentation or concealment of facts, then any policy granted upon this application shall be null and void."

In the application on which the policy was issued, the seventh question asked was, whether the assured had ever been afflicted with any of the diseases therein named, among which were included scrofula, asthma, and consumption. There was evidence tending to show that, at or prior to the date of the application, the insured was afflicted with said diseases, or some of them. The court held that the statements in the application were not warranties, and that

"It was an erroneous construction of the contract to...