Royal Neighbors of Am. v. Wallace

• Court: Supreme Court of Nebraska
• Writing for the Court: PER CURIAM.
• Citation: 66 Neb. 543,92 N.W. 897
• Parties: ROYAL NEIGHBORS OF AMERICA v. WALLACE.
• Decision Date: 03 December 1902

66 Neb. 543
92 N.W. 897

ROYAL NEIGHBORS OF AMERICA
v.
WALLACE.

Supreme Court of Nebraska.

Dec. 3, 1902.

Syllabus by the Court.

1. Certain statements in an application for life insurance, which are made a part of the policy issued, being representations, the validity of the policy depends upon their substantial truth; and it is for the jury to say whether the answers were true or false, and, if false, whether false in some particular material to the risk. But it is not for the jury to say that the answers, though substantially untrue, were nevertheless immaterial; the materiality of the representations having been by the parties concluded and determined by the form of the contract between them.

2. The rule as announced in the second syllabus of the former opinion in this case (Royal Neighbors of America v. Wallace, 89 N. W. 758) modified, but the decision therein given adhered to.

3. Where, in an action upon a life insurance policy, by the instructions of the court the jury are left at liberty to disregard all representations, as immaterial to the risk, it is prejudicial error, requiring the reversal of the case.

4. Where the charge to the jury, given on the court's own motion, contains a misstatement of the law, the question on review will be whether such misstatement misled the jury; and, if it probably did, the judgment will be reversed.

On rehearing. Modified.

For former opinion, see 89 N. W. 758.

[92 N.W. 897]

KIRKPATRICK, C.

A prior opinion written in this case is reported in 89 N. W. 758, wherein the facts are fully set out, and need not be restated herein. In that opinion, in the second paragraph of the syllabus, occurs the following language: “Where representations are of such a character that their materiality is a matter of common knowledge, upon which reasonable minds could not differ, it is error to submit the question of their materiality to the jury.” A motion for rehearing made by defendant in error has been allowed; the question for reconsideration thereby presented being that contained in the syllabus above quoted, all other questions having been eliminated. Defendant in error now contends that the holding of this court that the submission to the jury of the question of the materiality of the representations was reversible error is not well sustained, for several reasons: (1) That such holding is at variance with the prior adjudications of this court; (2) the citations made by this court in support of its conclusion are not in point, because taken from states in which the doctrine of warranties as at common law is adhered to, in which cases the materiality of the statements is not involved; (3) that the submission of the question of materiality of the representations to the jury was, at most, harmless error, because the materiality of the questions is patent to every fair mind, that the jury must be presumed not to have differed from other fair minds, and that there is ample testimony to sustain their verdict, assuming that they regarded the representations as material; and (4) that, in giving the instructions submitting the question of materiality, the court literally followed the averments in the answer of the defendant association, in charging that the answers of the assured were willfully and knowingly untrue, and were as to facts material to the risk. If the submission of this question was error, then it must be conceded to have pervaded the entire charge of the court. Only one instruction out of several need be quoted, the instructions being substantially alike: “(8) You are instructed that the fifth point for your determination arises from the following question and answer in said application, to wit: ‘Have you ever had hemorrhages? Ans. No.’ If you believe from the evidence that this representation was material to the risk; that it was willfully and knowingly false, and intended by the assured to deceive the defendant; and that the defendant relied upon and acted upon said alleged false and fraudulent statement,--then the plaintiff cannot recover, and you should find for the defendant; but if you believe from the evidence that said representation was true, or true to the best of her knowledge and belief, and was not intentionally made to deceive the defendant, or that it was not material to the risk, or that the defendant did not rely upon it in issuing the certificate, then you should find for the plaintiff on this point.”

That the answers to the questions asked of the assured herein were representations, and not warranties, is the law of this case. Before considering the specific contentions of defendant in error made at this hearing, it may be well to examine the question presented, namely, in an action on a life insurance policy, is it error to submit to the jury the question whether the answer made by the assured to a question asked by the company is or is not material to the risk assumed by the insurer? In other words, may the jury be left at liberty to disregard all the testimony with reference to the truth or falsity of a given answer, if to them the question and answer were immaterial to the risk, and conclude that, the answer being immaterial to the risk, it is immaterial whether true or false? Prior decisions of this court have already drawn the plain distinction between a warranty and a representation. Insurance Co. v. Simmons, 49 Neb. 811, 69 N. W. 125. It is the settled law here that statements will not be construed as warranties unless there is no room for another construction. Association v. Shryock, 54 Neb. 250, 74 N. W. 607, 39 L. R. A. 826. Whether a statement is a representation or a warranty is for the court. The question of the materiality of a warranty cannot in any event be either a question for the court or jury, because it is upon the literal truth of

[92 N.W. 898]

a warranty that the validity of the policy depends, without reference to its materiality. Insurance Co. v. Simmons, supra.

The answers in this case being representations, the validity of the policy did not depend upon their literal truth. It was sufficient if they were substantially true; that is, were they true in every particular material to the risk? This question was manifestly one for the jury. It was for them to say whether the answer, if false, was false to a degree or in a sense that materially affected the risk, or, in other words, was it false to such an extent that the insurance company, had it known the absolute truth, would not have assumed the risk? This, we apprehend, is the very distinction between a representation and a warranty. In the case of a warranty it cannot be said that, though literally false, it is substantially true. In the case of a representation, the law clearly contemplates that it shall be viewed liberally, and though false, as a matter of fact, to a degree sufficient to defeat the liability of the company if it were a warranty, it may nevertheless, as a representation, be held to be substantially true. An applicant might, in answer to a question, “How old are you?” say that he was 30; and should the proof show that he was 29, 31, or 36, it would be for the jury to say whether the answer was false in a particular material to the risk. So, likewise, in the case of a negative answer to the question, “Have you ever had hemorrhages or spitting of blood?” where the proof might tend to show that the blood spitting resulted several...