Sovereign Camp, W.O.W. v. Moore

• Decision Date: 28 May 1936
• Docket Number: 1 Div. 897
• Parties: SOVEREIGN CAMP, W.O.W., v. MOORE.
• Court: Alabama Supreme Court

168 So. 577

232 Ala. 463

SOVEREIGN CAMP, W.O.W., v. MOORE.

1 Div. 897

Supreme Court of Alabama

May 28, 1936

Appeal from Circuit Court, Mobile County; Claude A. Grayson, Judge.

Action on a policy or certificate of life insurance by Ellen V Moore against the Sovereign Camp of the Woodmen of the World. From a judgment for plaintiff, defendant appeals.

Reversed and remanded.

Lyons Chamberlain & Courtney, of Mobile, for appellant.

Wm. J Young, of Mobile, for appellee.

BOULDIN Justice.

Action on a fraternal insurance policy to recover death benefit.

A statement in the written application for such policy that the applicant is in good health, which statement is made a part of the contract, expressly stipulated to be a warranty, which, if untrue, shall render the policy null and void, is a warranty that the applicant is not then afflicted with a serious disease which will increase the risk of loss.

A plea setting up such contract provisions and alleging a breach thereof, in that the applicant was, at the time, afflicted with a named disease which could and did in fact cause death sooner than if he had been free from such disease, and therefore, the risk of loss was increased, is a good plea. Sovereign Camp, W.O.W., v. Hutchinson, 214 Ala. 540, 543, 108 So. 520; Brotherhood of Railway & Steamship Clerks v. Riggins, 214 Ala. 79, 107 So. 44; Reliance Life Ins. Co. v. Sneed, 217 Ala. 669, 117 So. 307; National Life & Accident Ins. Co. v. Winbush, 215 Ala. 349, 110 So. 571; Independent Life Ins. Co. v. Carroll, 219 Ala. 79, 121 So. 88; Heralds of Liberty v. Collins, 216 Ala. 1, 110 So. 283; Sovereign Camp, W.O.W., v. Gibbs, 217 Ala. 108, 114 So. 915; Empire Life Insurance Co. v. Gee, 171 Ala. 435, 55 So. 166; Mutual Life Insurance Company v. Allen, 174 Ala. 511, 56 So. 568; Metropolitan Life Ins. Co. v. Goodman, 196 Ala. 304, 71 So. 409; Massachusetts Mut. L.I. Co. v. Crenshaw, 195 Ala. 263, 70 So. 768; Independent Life Ins. Co. v. Carroll, 222 Ala. 34, 130 So. 402; General Accident, Fire & Life Assur. Corporation, Ltd., v. Jordan, 230 Ala. 407, 161 So. 240; National Life & Accident Ins. Co. v. Baker, 226 Ala. 501, 147 So. 427; Metropolitan Life Ins. Co. v. Chambers, 226 Ala. 192, 193, 146 So. 524; Independent Life Ins. Co. of America v. Butler, 221 Ala. 501, 129 So. 466; Life Ins. Co. of Virginia v. Newell, 223 Ala. 401, 137 So. 16; Mutual Life Ins. Co. of New York v. Mandelbaum, 207 Ala. 234, 92 So. 440, 29 A.L.R. 649; Travelers' Ins. Co. v. Whitman, 202 Ala. 388, 80 So. 470; 3 Joyce on Insurance, § 1942.

Amended plea No. 2 conformed to all the principles above announced, naming Bright's disease as the ailment with which the insured was afflicted.

The trial court erred in sustaining demurrer thereto.

In pleadings and rulings thereon, as well as briefs filed here, it appears that the distinction between a misrepresentation and warranty in an insurance contract, and what must be alleged and proven when either is relied upon to avoid the contract, were matters of controversy.

A fundamental difference between a warranty and a misrepresentation affecting insurance contracts, the same as all others, is that a warranty is contractual, enters into and becomes a part of the contract, while a misrepresentation is anterior to and an inducement to the making of the contract.

Formerly there was controversy and doubt as to when statements concerning the risk in life insurance should be deemed warranties or misrepresentations.

To clarify this, and put the insured in possession of the entire contract, the contents of insurance contracts generally are now defined by statute. Code,§ 8371; see note to Michie's Code.

A later statute now defines what shall constitute the contract in fraternal life insurance. Code, § 8452; Sovereign Camp, W.O.W., v. Brownrigg, 231 Ala. 162, 163 So. 786.

To further protect the insured against immaterial matters either by stipulations declaring all representations material or giving them the form of warranties, another statute was enacted, reading: "No written or oral misrepresentation, or warranty therein made, in the negotiation of a contract or policy of insurance, or in the application therefor or proof of loss thereunder, shall defeat or void the policy, or prevent its attaching, unless such misrepresentation is made with actual intent to deceive, or unless the matter misrepresented increase the risk of loss." Section 8364, Code.

A like statute now applies to fraternal insurance. Code, § 8507.

These statutes do not abrogate the fundamental distinction between a misrepresentation and a warranty, but mention both. The statutes do, however, ordain that neither a misrepresentation nor a warranty shall avoid the policy, unless the misrepresentation, whether given the form of a warranty or not, was made "with actual intent to deceive"...