Rauen v. The Prudential Ins. Co. of America

• Decision Date: 15 February 1906
• Citation: 106 N.W. 198,129 Iowa 725
• Parties: MATHIAS RAUEN, Administrator of the estate of M. RAUEN, Deceased, Appellee, v. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, Appellant
• Court: Iowa Supreme Court

106 N.W. 198

129 Iowa 725

MATHIAS RAUEN, Administrator of the estate of M. RAUEN, Deceased, Appellee, v. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, Appellant

Supreme Court of Iowa, Des Moines

February 15, 1906

Appeal from Mitchell District Court.--HON. CLIFFORD P. SMITH, Judge.

Affirmed.

G. E Marsh, for appellant.

Eaton & Salisbury, for appellee.

OPINION

THE opinion states the case.--Affirmed.

WEAVER, J.

On May 7, 1902, one Matthias Rauen, a resident of Mitchell county, Iowa died testate. At the date of his death said Rauen held a policy of insurance in the defendant company in the sum of $ 1,000, payable to his executor. By the terms of his will the testator devised to his wife a life tenancy in all his real estate, and, subject to the payment of his debts therefrom, gave her absolutely all his personal property. Matthias Rauen, son of the testator, was named as the executor of the instrument. Soon after the death of the testator, his widow, Marry Rauen, was appointed temporary administratrix to collect and preserve the property of the estate pending the probate of the will, and acted in that capacity until October following, when the will was probated, and the executor named therein took charge of the estate. Some time after the appointment of the administratrix she notified the defendant company of her husband's death and furnished the required proofs. Thereafter she was visited by an agent of the company, and some correspondence ensued, culminating in a refusal to pay the claim on the ground that the company was relieved from all liability on the policy because, in his application therefore, the deceased had made false representations and warranties as to his medical history and condition of health. This refusal was accompanied by an offer to return to Mrs. Rauen the amount of the premium paid on the policy, $ 47.99, upon her execution of a receipt tendered by defendant for her signature. Acting, so far as it appears, without legal advice, Mrs. Rauen executed and returned the receipt to the defendant, and received and cashed its check for the amount above mentioned. The check was made payable to "Mary Rauen, Special Administratrix," and is expressed as being "in full for all claims under policy No. 331, 808." The receipt was indorsed upon or attached to the policy, and is in the following form: "Newark, N.J., July 23, 1902. Received from the Prudential Insurance Company of America Forty-seven and ninety-nine one hundredths dollars ($ 47.99), in full for all claims under the within policy terminated by death. Maria Rauen, Special Administratrix." This transaction was never reported to the court, nor in any manner authorized or approved by it.

After the probate of the will and the appointment of plaintiff as executor, this action was begun to recover the amount of the policy. To this the defendant appeared and answered, admitting the issuance of the policy and payment of the premium thereon, and alleging in several counts, by way of defense, that the policy in suit was issued to the deceased upon his written application and medical examination, in which he made material representations as to his physical condition and health, which representations were expressly warranted to be true and made part of the contract between the parties, and that the policy was issued in reliance thereon; that said representations and warranties were not true; that the deceased was then suffering with the disease from which he afterward died; and that by reason of said fraud and the failure of said warranties the plaintiff has no right of action on the policy. The answer concedes that no copy of the application or medical examination was ever attached to the policy as required by the insurance statutes of Iowa but says that the policy was issued and delivered in the State of Minnesota, and it is to be construed and enforced as a Minnesota contract. It also alleges that the only statute in the latter State in any manner corresponding with the Iowa statute upon this subject is section 71, chapter 175, page 430, of the General Laws of Minnesota for 1895, which provides that "every policy which contains a reference to the application of the insured either as a part of the policy or as having any bearing thereon, must have attached thereto a correct copy of the application."

By way of further and distinct answer the defendant pleads the transaction had with the widow, by which she surrendered and receipted the policy, as a complete and valid settlement of the claim sued upon. To that part of the answer which pleads the alleged fraud and misrepresentation of the insured in applying for the policy, the plaintiff demurred, because no copy of the application was attached to said policy. To the count pleading the alleged settlement the plaintiff replied, alleging want of power or authority in the special administratrix to bind the estate of her husband by such an agreement, and, further, that said agreement was without consideration and the same was procured by fraud and mistake. The court sustained the demurrer, and upon trial of the issue of fact found the plaintiff entitled to recover. The defendant appeals.

I. The provision of our own Code (section 1819) is that wherever the policy of life insurance makes the application a part of the contract, or in any manner refers to such application, a copy thereof must be attached thereto or indorsed upon the policy, an omission so to do, while not invalidating the policy, shall serve to preclude the insurance company from pleading, alleging, or proving such application or representations or the falsity thereof.

If, therefore, in an action brought in our courts, the Iowa statute is to govern as to such matters of pleading and proof, the demurrer was properly sustained. So, also, if the Iowa statute be held not applicable, and the rights of the parties in this respect are to be measured by the Minnesota statute, and this latter statute is to be construed as having like legal effect with our own, the ruling was correct. Some members of the court would affirm the ruling sustaining the demurrer, on the theory that our statute pertains solely to matters of remedy and procedure, and not to the validity or substance of the contract, and therefore applies to all actions upon life insurance policies brought in this jurisdiction. Nelson v. Insurance Co., 110 Iowa 600, 81 N.W. 807; Jones v. Insurance Co., 110 Iowa 75, 81 N.W. 188; Burk v. Putman, 113 Iowa 232, 84 N.W. 1053; Allerton v. Monona Co. 111 Iowa 560, 82 N.W. 922; Wormley v. Hamburg, 40 Iowa 22; McLane v. Bonn, 70 Iowa 752, 30 N.W. 478; Wood v. Brolliar, 40 Iowa 591; Parsons v. Carey, 28 Iowa 431; Railroad Co. v. Dey, 82 Iowa 312; Williams v. Haines, 27 Iowa 251; Kossuth Co. v. Wallace, 60 Iowa 508, 15 N.W. 305; Ballard v. Ridgley, Morris 27; Inghram v. Dooley, Morris, 29; Stanhilber v. Insurance Co., 76 Wis. 285 (45 N.W. 221); Hebb v. Insurance Co., 138 Pa. 174 (20 A. 837); Insurance Co. v. Owen, 10 Colo.App. 131 (50 P. 210); Railroad Co. v. McCann, 54 Ohio St. 10 (42 N.E. 768, 31 L.R.A. 651, 56 Am. St. Rep. 695); Emery v. Burbank, 163 Mass. 326 (39 N.E. 1026, 28 L.R.A. 57, 47 Am. St. Rep. 456); Bair v. Railroad, 3 H. L. Cases, 1; Downer v. Chesebrough, 36 Conn. 39 (4 Am. Rep. 29); Association v. Musser, 120 Pa. 384 (14 A. 155); Norristown Title, Trust & Safe Deposit Co. v. Insurance Co., 132 Pa. 385 (19 A. 270); Hunziker v. Lodge, 25 Ky. L. Rep. 1510 (78 S.W. 201); Fant v. Miller, 58 Va. 47, 17 Gratt. 47; Corbin v. Bank, 87 Va. 661 (13 S.E. 98, 24 Am. St. Rep. 673); Insurance Co. v. Pollard, 94 Va. 146 (26 S.E. 421, 36 L.R.A. 271, 64 Am. St. Rep. 715); Hunt v. Jones, 12 R.I. 265 (34 Am. Rep. 635); Railroad v. Barron, 83 Ill. 365; Dorr Cattle Co. v. Bank, 127 Iowa 153, 98 N.W. 918; Heaton v. Eldridge, 56 Ohio St. 87 (46 N.E. 638, 36 L.R.A. 817, 60 Am. St. Rep. 737); Lenroux v. Brown, 2 C. B. 801; Southwick v. Southwick, 49 N.Y. 510; Howard v. Moot, 64 N.Y. 262; Rich v. Flanders, 39 N.H. 304; Kingley v. Cousins, 47 Me. 91; Edwards v. Dixon, 53 Ga. 334; O. Waterworks v. Oshkosh, 109 Wis. 208, 85 N.W. 376 (85 N.W. 376, 95 Am. St. Rep. 870); Von Baumbach v. Bade, 9 Wis. 559 (76 Am. Dec. 283); Curtis v. Whitney, 80 U.S. 68 (20 L.Ed. 513); Fong Yue Ting v. U.S., 149 U.S. 698 (13 S.Ct. 1016, 37 L.Ed. 905); Mack v. De Graff, 57 Ohio St. 463 (49 N.E. 697, 63 Am. St. Rep. 729); Helton v. Railroad, 97 Ala. 275 (12 So. 276); Cooley's Constitutional Limitations (5th Ed.) pp. 329, 349, 443; Story's Conflict of Laws, section 342; Sutherland's Statutory Construction, section 478.

We find it unnecessary, however, to now decide the question here suggested, as in our judgment the ruling of the trial court upon the demurrer may well be upheld, even on the appellant's theory that statutes of the nature of Code section 1819, go to the substance and legal effect of the contract of insurance, rather than the remedy, and that the policy sued upon must be treated as a Minnesota contract. The statute of Minnesota pleaded and relied upon by the appellant, and above quoted requires that each policy of insurance which contains a reference to the application of the insured, "whether as a part of the policy or as having any bearing thereon," must have attached thereto a correct copy of the application. In our judgment the effect of this provision is to exclude or eliminate from the contract all reference to an application a copy of which is not attached to the policy, and to render ineffective all defenses based upon anything contained in such application. To hold otherwise is to rob the statute of all effective force and make its enactment meaningless. We are therefore disposed to hold that, if the application be not attached in obedience to the statute, the policy...