Smith v. Prudential Ins. Co. of Am.

• Citation: 83 N.J.L. 719,85 A. 190
• Parties: SMITH v. PRUDENTIAL INS. CO. OF AMERICA.
• Decision Date: 18 November 1912
• Court: United States State Supreme Court (New Jersey)

85 A. 190

83 N.J.L. 719

SMITH

v. PRUDENTIAL INS. CO. OF AMERICA.

Court of Errors and Appeals of New Jersey.

Nov. 18, 1912.

Error to Supreme Court.

Action by Delphine Smith against the Prudential Insurance Company of America. Judgment for plaintiff, and defendant brings error. Affirmed.

Louis H. Miller, of Millville, and Edward D. Duffield, of Newark, for plaintiff in error. Howard Carrow and William J. Kraft, both of Camden, for defendant in error.

BERGEN, J. This writ was brought to correct alleged errors at the trial of the issues embraced in a Supreme Court record, sent to the Cumberland county circuit court for trial, at which the plaintiff recovered a verdict for the amount due on a life insurance policy, on which the judgment under review was entered in the Supreme Court.

The errors assigned are directed to the charge of the court; to the construction by the court of the policy and the written application therefor, which by its terms is made a part of the contract of insurance; and to rulings on the admission and rejection of testimony. The application contained a number of questions, and answers made to them by the applicant, the correctness of which he affirmed by the following declaration: "I hereby declare that all the statements and answers to the above questions are complete and true to the best of my knowledge and belief, and I agree that the foregoing, together with this declaration, shall constitute the application and become a part of the contract of insurance hereby applied for, and it is further agreed that the policy herein applied for shall be accepted subject to the privileges and provisions therein contained, and the said policy shall not take effect until the same shall be issued and delivered by the company, and the first premium paid thereon in full, while my health is in the same condition as described in this application." This certificate was signed by the applicant July 12, 1909, and on August 12, 1909, he was examined by the physician of the defendant, who reported the applicant to be a first-class risk. The first premium was paid by the insured, and the policy delivered to him on August 20, 1909. He died July 2, 1910.

The first point argued as a ground for reversal is based upon an exception taken to the refusal by the court to charge the following request: "That the burden of proof is upon the plaintiff to show that, at the date of delivery of the policy and payment of the first premium, the insured was in good health." What the court charged was: "The plaintiff in this case does accept the burden of proving to your satisfaction that Mr. Smith was, on the date of the issuance of the policy, in the same condition of health as described in the application blank, but in the application and in the declaration he says, 'The statements and answers to the above questions are complete and true to the best of my knowledge and belief,' so that when he said in the application in answer to the question: 'Q. Are you in good health?' 'A. Good'—he declared that was true to the best of his knowledge and belief. And I charge you, therefore, that all you have to find, in order to make this policy effective against the company, is that he answered truly to the best of his knowledge and belief that he was in good health. In other words, he need not necessarily have been in good health, if he honestly believed he was in good health when this policy was issued and when he made the application and the declaration."

We are of opinion that, the statement regarding condition of health when the application was signed being upon knowledge and belief, all the plaintiff was required to show was that the applicant, when he signed the application, and the policy was delivered to him, had reason to, and did, believe that he was in good health. It is not necessary in this case to consider which of the statements are to be deemed warranties and which not, within the fair meaning of the contract, based upon the bona fide opinion and belief of the applicant, as might be required where the applicant has unqualifiedly certified that all the statements are true, as in Dimick v. Met. Life Ins. Co., 69 N. J. Law, 384, 55 Atl. 291, 62 L. R. A. 774, for in this case all of the statements were certified to be upon knowledge and belief, and it falls within that class of cases illustrated by Anders v. Knights of Honor, 51 N. J. Law, 175, 17 Atl. 119, in which Chief Justice Beasley said, regarding the certification of truth upon knowledge and belief: "It seems to the court that this accepted declaration by the assured that he has answered the questions to the best of his knowledge and belief must be held to exclude the idea that he had undertaken to answer them in a more unqualified manner. If his statement was an engagement that his answers were absolutely true, no reason appears for the presence of this subsequent statement that such answers were but relatively true. In fine, the several parts of this contract will not consist unless upon the theory that the assured warranted, not the absolute truth of his answers, but only their truth to the extent of his knowledge."

The cases which the plaintiff in error has cited on his brief are not applicable to a case where the condition of health at the time of the application and its remaining unchanged until the policy was issued is upon information and belief. In Gallant v. Met. Life Ins. Co., 167 Mass. 79, 44 N. E. 1073, the contract was that no obligation was assumed by the company, unless at the time the policy was issued the insured was alive and in sound health, and it did not appear that the statements of the insured were, by the terms of the contract, limited to knowledge and belief.

So, also, in the case of Barker v. Met. Life Ins. Co., 188 Mass. 542, 74 N. E. 945, the statement of the applicant was "that I further declare, warrant, and agree that the representations and answers made above are strictly correct and wholly true," which was a warranty that they were true, and not that the applicant believed they were true.

In Packard v. Met. Life Ins. Co., 72 N. H. 1, 54 Atl. 287, judgment was rested upon the same sort of a policy. And so examination of all the cases cited show that the condition of health was warranted unqualifiedly, and not upon knowledge and belief.

We are of opinion that the trial court correctly interpreted the legal effect of this contract, and that the question whether, to the knowledge and belief of the applicant, he was in good health, was properly submitted to the jury. On this question there was conflicting testimony, and the verdict of the jury establishes the fact that the applicant, according to the best of his knowledge, believed he was in good health when he made the application and when the policy was issued.

The next point pressed on the argument rests upon the refusal of the court to direct a verdict for the defendant because the insured represented to the defendant that no application for insurance on his life was pending in...