Sellwood v. Equitable Life Ins. Co. of Iowa
| Decision Date | 06 April 1950 |
| Docket Number | No. 35032,35032 |
| Citation | 230 Minn. 529,42 N.W.2d 346 |
| Parties | SELLWOOD v. EQUITABLE LIFE INS. CO. OF IOWA. |
| Court | Minnesota Supreme Court |
Syllabus by the Court.
1. Statements by the insured concerning his insurability in an application for reinstatement of a life insurance policy lapsed for nonpayment of premium, not endorsed upon or attached to the policy, may be used as a defense by the insurer in an action to recover upon the policy under statutory and policy provisions to the effect that the policy constitutes the entire contract between the parties; that, absent fraud, any statements of the insured shall constitute representations and not warranties; and that no such statements shall avoid the policy unless they are contained in a Written application and a copy of the application shall be endorsed upon or attached to the policy When issued.
2. Where life insurance has become incontestable by lapse of the time specified in the policy, reinstatement of the policy may be shown to have been procured by the insured by false statements in the application therefor as to whether he had suffered injury or disease or consulted a physician within the time therein stated.
3. Declarations of the insured as to his opinion concerning his health are not admissible to show the immateriality of the insured's false statements in an application for reinstatement of the policy as to whether he had suffered any disease or injury or had consulted a physician since the date of his last application for insurance or examination therefor by the company.
4. Where the objection to a tender made by check went to the amount tendered and not the fact that it was by check, the creditor may not afterward object to the tender upon the ground that the medium of the tender was a check rather than money.
Martin Friedman, Duluth, for appellant.
Holmes, Mayall, Reavill & Neimeyer, Duluth, for respondent.
This is an action to recover upon a life insurance policy which was reinstated after it had lapsed for nonpayment of premium. Decision below was for defendant upon the ground that the insured made false statements in the application for reinstatement concerning his insurability. Plaintiff appeals.
The questions for decision are:
(1) Whether statements by the insured concerning his insurability in an application for reinstatement of a life insurance policy lapsed for nonpayment of premium, not endorsed upon or attached to the policy, may be used as a defense by the insurer in an action to recover upon the policy under statutory and policy provisions to the effect that the policy constitutes the entire contract between the parties; that, absent fraud, any statements of the insured shall constitute representations and not warranties; and that no such statements shall avoid the policy unless they are contained in a Written application and a copy of the application shall be endorsed upon or attached to the policy When issued;
(2) Whether, where life insurance has become incontestable by lapse of the time specified in the policy, reinstatement of the policy may be shown to have been procured by the insured by false statements in the application therefor as to whether he had suffered injury or disease or consulted a physician within the time therein stated;
(3) Whether declarations of the insured as to his opinion concerning his health are admissible to show the immateriality of the insured's false statements in an application for reinstatement of the policy as to whether he had suffered any disease or injury or had consulted a physician since the date of his last application for insurance or examination therefor by the company; and
(4) Whether, where the objection to a tender made by check went to the amount tendered and not the fact that it was by check, the creditor may afterward object to the tender upon the ground that the medium of the tender was a check rather than money.
On April 6, 1942, defendant insured John W. Sellwood by a policy of endowment life insurance for $3,300 payable to plaintiff if she survived him. By the terms of the policy, premiums were payable annually on April 6, but by the terms of an 'Extention Agreement For Payment Of Annual Premium In Monthly Installments,' the second and subsequent annual premiums were payable in monthly installments on the last day of each month, subject to a stipulation therein that failure to pay such installments when due or within ten days thereafter should cause the policy 'to immediately cease and determine.' Insured did not pay the monthly installment due on November 30, 1946, or within ten days thereafter. Seventeen days after the installment payment was due--seven days after the policy had lapsed for nonpayment of premium-insured Applied in writing by an instrument entitled for reinstatement, Representing therein that he had not suffered any disease or injury or consulted a physician or practitioner since the date of his last application for insurance or examination in the company. The application for reinstatement was made under a policy provision, which, so far as here material, gave the insured the right to be reinstated 'upon receipt of evidence satisfactory to the Company of the insurability of the Insured' and the payment of all premium arrears with interest. These the insured paid.
The defense was that the reinstatement of the policy was procured by false representations, in that, while the insured represented that he had not consulted a physician after the policy had been issued, the fact was that he had done so during the period from February 17 to 26, 1946. The evidence showed that during such period the insured consulted two physicians at a hospital where he was a patient and at the office of one of the physicians. Upon objection by plaintiff, defendant was not permitted to show the nature of the illness or disease for which insured consulted the physicians. Questions by plaintiff's counsel put to her and another witness as to insured's 'opinion' concerning his physical condition during the year 1946 were excluded upon defendant's objection as hearsay and as incompetent, irrelevant, and immaterial.
The policy, in accordance with statute, see, M.S.A. §§ 61.27, 61.30 (4, 10), contained provisions: (a) That the policy, together with the application therefor, constituted the entire contract between the parties; that all statements made by the insured, in the absence of fraud, should be deemed representations and not warranties; and that no statement should avoid the policy or be used in defense to a claim thereunder unless it was contained in the written application and a copy of such application was attached to the policy 'when issued'; and (b) that the policy should be incontestable after it had been in force for a period of two years from the date of issue, except for nonpayment of premiums.
After plaintiff furnished proofs of claim under the policy, defendant denied liability thereunder, except for the amount of $635.36, for which, if it was not liable for the face of the policy, it admittedly was liable. Defendant sent a check for the amount mentioned to plaintiff, which her attorney returned for the reason that it was not for the face of the policy, which she claimed.
Plaintiff contends: (1) That any statements made by the insured in the application for reinstatement could not be used by defendant as a defense, for the reasons that under the statutes and the policy only statements made in an application attached to the policy may be used in defense thereof (and then only within the contestable period), and that the application for reinstatement was not so attached; (2) that the policy became incontestable after the expiration of two years from its date, and that, because that is true, the reinstatement thereof was without contestability by the company upon the grounds here asserted; (3) that, even if the statements of the insured in the application for reinstatement could be used in defense of this action, the declarations of the insured as to his opinion concerning his health would have been evidence that he was in good health, or at least that he believed that he was; and (4) that no valid tender of the amount due plaintiff was made by defendant, for the reason that a check, not money, was tendered.
Defendant contends: (1) That the statutory and policy provisions in question require only the original application to be attached to the policy and not one for reinstatement after lapse for nonpayment of premiums, and that such intention is manifested by the words requiring the application to be attached to the policy 'when issued'; (2) that, while the policy had become by the expiration of two years from its date incontestable as to defenses existing at the time it was issued and while thereafter statements in the original application for the policy itself could not be used in defense of an action brought on the policy, the reinstatement of the policy was contestable for false statements in procuring it; (3) that the deceased's declarations concerning his opinions as to his health were hearsay and, as such, inadmissible; and (4) that under the circumstances the tender of the check was a good tender.
1. Reinstatement of a life insurance policy after lapse or forfeiture for nonpayment of premiums by performance of the conditions specified in the policy continues in force the original policy and is not the issuance of a new one. Brown v. State Automobile Ins. Ass'n, Des Moines, Iowa, 216 Minn. 329, 12 N.W.2d 712; Robbins v. New York Life Ins. Co.,195 Minn. 205, 262 N.W. 210, 872. The authorities are in conflict as to whether an application for reinstatement is required to be attached to the policy and whether the failure to do so precludes the insurer from setting up as a defense misrepresentations of the...
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