Selby v. Mutual Life Ins. Co. of New York
| Decision Date | 18 March 1895 |
| Docket Number | 387. |
| Parties | SELBY v. MUTUAL LIFE INS. CO. OF NEW YORK. |
| Court | United States Circuit Court, District of Washington, Northern Division |
Fred H Peterson and L. C. Gilman, for plaintiff.
Strudwick & Peters, for defendant.
The answer in this cause contains no denial of the allegations of the complaint, except the allegations that the plaintiff's husband in his lifetime fully complied with all the requirements, and performed all the conditions, of his contract with the defendant. A mere general denial of such a general statement raises no issue, and, according to the rules of pleading, all the facts well pleaded in the complaint are admitted. I can find no fatal defect in the plaintiff's case as set forth in her complaint; therefore she is entitled to a judgment on the pleadings for the full amount demanded, unless the affirmative allegations of the answer are sufficient, if true, to avoid liability on the policies. The sum and substance of said affirmative defense is this: The husband of plaintiff, in his application for the insurance, warranted certain statements of fact concerning himself; the policies sued on were issued in consideration of said warranty, and the warranty is a part of the contract there was a breach of the warranty, for certain specified statements made in said application were untrue. It is not alleged that the defendant has returned or tendered a return of the premiums; fraud is not charged, and it is not alleged that the defendant has been damaged by breach of the warranty, nor that it made an agreement which it would not have consented to if the truth had been given in said application. And it is not alleged that by any stipulation in the application, or in the policies, or otherwise, the parties agreed or consented that a breach of the warranty should ipso facto nullify the policies, or entitle the defendant to claim a forfeiture of the premiums paid. In fact, the application and policies introduced in evidence on the trial show that no such stipulation is contained therein. The policies, which were the only written evidence of the contract delivered to or retained by the insured, are free from the mass of verbiage found in many forms of life insurance policies, and quite liberal in terms. It is not unlikely that the advantage of policies in such form was urged upon plaintiff's husband, by the defendant's soliciting agent, as an inducement for preferring this company over other life insurance companies, and the particular plan of insurance selected over other plans.
The theory of this defense is that the warranty is like a condition precedent, and that, notwithstanding the receipt and retention by the defendant of the premiums, and the issuance of the policies, and although the parties did not incorporate into their contract a stipulation to that effect a mere breach of the warranty renders the policies void ab initio. A warranty as to any fact, which becomes an integral part of the basis of a contract, differs from a mere representation of such fact in this; it precludes any controversy as to the materiality of such fact,-- whereas a false representation is not ground for avoiding a contract unless the party to whom it is made relies upon it, and is actually induced by it to enter into an agreement or consent to terms disadvantageous to him. Keeping this distinction in view, it is plain that the facts pleaded would be sufficient to entitle the defendant to rescind the contract if, after being apprised of the breach, it had, with reasonable promptness, elected to rescind, instead of retaining whatever profit or advantage the contract afforded. But the same facts would afford no ground for the insured to treat the contract as a nullity. He could not, against the will of the defendant, withdraw his application for insurance, and compel a...
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