Sternaman v. Metro. Life Ins. Co.

• Decision Date: 25 February 1902
• Citation: 62 N.E. 763,170 N.Y. 13
• Parties: STERNAMAN v. METROPOLITAN LIFE INS. CO.
• Court: New York Court of Appeals Court of Appeals

170 N.Y. 13

62 N.E. 763

STERNAMAN

v.METROPOLITAN LIFE INS. CO.

Court of Appeals of New York.

Feb. 25, 1902.

Appeal from supreme court, appellate division, Fourth department.

Action by Olive A. Sternaman against the Metropolitan Life Insurance Company. From a judgment of the appellate division (63 N. Y. Supp. 674) affirming a judgment in favor of defendant entered on a verdict directed by the court, plaintiff appeals. Reversed.

This action was brought to recover the sum of $1,000, alleged to be due on a public of insurance issued by the defendant to the plaintiff, as beneficiary, upon the life of her husband, George H. Sternaman. The policy recites that the promise to insure was made in consideration of the statements contained in the application, all of which are referred to as warranties, and made a part of the contract. The application consists of two parts, A and B. Part A, entitled, ‘Application to the Metropolitan Life Insurance Company,’ consists of questions relating to the age, occupation, family history, etc., of Mr. Sternaman, all of which were truthfully answered. At the close of these questions and answers there appeared the following: ‘It is hereby declared, agreed, and warranted by the undersigned that the answers and statements contained in the foregoing application, and those made to the medical examiner, as recorded in parts A and B of this sheet, together with this declaration, shall be the basis and become part of the contract of insurance with the Metropolitan Life Insurance Company; that they are full and true and are correctly recorded, and that no information or statement not contained in this application and in the statements made to the medical examiner, received or acquired at any time by any person, shall be binding upon the company, or shall modify or alter the declaration and warranties made therein; that the persons who wrote in the answers and statements were and are our agents for the purpose, and not the agents of the company, and that the company is not to be taken to be responsible for its preparation, or for anything contained therein or omitted therefrom; that any false, incorrect, or untrue answer, any suppression or concealment of facts in any of the answers, any violation of the covenants, conditions, or restrictions of the policy, and neglect to pay the premium on or before the date it becomes due, shall render the policy null and void, and forfeit all payments made thereon.’ Part A, dated April 25, 1896, was signed by both Mr. and Mrs. Sternaman, and witnessed by one Godson. Part B, entitled, ‘Statements Made to the Medical Examiner,’ consists of more than 100 questions in fine print, and the answers thereto, written in a blank space so contracted as to admit of an affirmative or negative answer, with little or no opportunity for explanation. They relate to the health, past and present, of the applicant, the diseases he had been afflicted with, and the physicians he had consulted. Among them were the following: ‘Have you ever had loss of consciousness? No. Any personal injury? No. Name and residence of your usual medical attendant? Dr. Frost, Plymouth avenue. When and for what have his services been required? For la grippe. Have you consulted any other physician, and, if so, when, and for what? No.’ Part B closed as follows: ‘I hereby declare that the application to the Metropolitan Life Insurance Company on the reverse of this sheet for an insurance on my life was signed by me, and that I renew and confirm my agreements therein as to the answers given above to the medical examiner, and I hereby declare that said answers are correctly recorded.’ Part B, dated April 27, 1896, was signed by Mr. Sternaman only, and was witnessed by Dr. Langley, the medical examiner.

Upon the trial the defendant introduced evidence tending to show that some of the answers above quoted, made to the medical examiner, were not literally true. The plaintiff then proved that the application ‘was brought to the house of the insured by Dr. Langley, who was one of the defendant's medical examiners, and was designated and paid by the defendant; that the questions were asked of the deceased, and the answers thereto in the application were filled in by the doctor in his own handwriting; that the doctor took the application away with him after it had been signed by the plaintiff and said insured; and that the application has been in the possession of the defendant ever since. The plaintiff was present and heard the conversation between the doctor and the deceased at the time the application was filled in and signed.’ The plaintiff was then sworn as a witness in her own behalf, but was not allowed to testify to the answers in fact made by her husband to the questions put to him by the medical examiner. The plaintiff's counsel offered to prove by her ‘that in this interview, at this time and place, George H. Sternaman, the insured, told Dr. Langley, the medical examiner of the defendant, that he had suffered from malaria, and was attended by Dr. McFadden, of Buffalo, or, rather, that he went to Dr. McFadden's on several occasions, for malaria, to consult him, but that he was not at any time on that account laid up from work; and that he also doctored with Dr. McFadden, by going to his office, for sore eyes; and also that at the time the beneficiary, the plaintiff here, was sick, and the insured did have sore throat or tonsilitis, and that Dr. Tanner did attend him on three or more occasions at that time, but that he was not seriously ill; and that the deceased also stated to Dr. Langley that on one occasion he had been hurt in a fall from his bicycle, in that the skin from the palm of his hand had been injured, and that he had been attended by Dr. Staples, mentioned in the proofs of loss, for that injury to the hand; and that he had, during the period of his life principally preceding his marriage, had peculiar spells, of which he did not know the name, in which he had partly lost consciousness, and that they were occasioned by any disappointment or reverse or mental pain that he suffered; and that his wife had consulted with Dr. Frost about them at one time, and that Dr. Frost had said that they were not of very much importance; and that one of these different physicians whom he had gone to had said that he had catarrh of the stomach, and that Dr. Langley thereupon examined him and questioned him in regard to catarrh of the stomach, and said that he did not have it; and that, in regard to the other matters (being the malaria, the injury to the hand, and the tonsilitis), Dr. Langley said that they were not of enough importance to insert them in the medical examination, and that these consultations with other physicians were not of so serious a character as to require mentioning; and, further, that all particulars of every consultation with every physician, and every injury to his health, or disease, were fully disclosed to Dr. Langley in this interview, prior to his filling out both parts of the application, and Dr. Langley said that they were none of them of sufficient importance to warrant being inserted; and that Dr. Langley thereupon filled out the application and it was signed. The plaintiff's attorney offered to make proof of each of these facts separately, as well as a whole.’ This testimony was excluded upon the objection of the defendant that it was incompetent, immaterial, and in violation of the contract, and that the plaintiff could not by parol vary the terms of the application and contract. Exceptions were taken to the rulings which excluded this evidence.

The insured died of multiple neuritis,-a disease which apparently had no connection with the answers alleged to be false, although this did not expressly appear. Da Costa, Medical Diagnosis, 128; Lippencott, Medical Dict. 673.

The jury, as directed by the trial judge, rendered a verdict for the defendant; and, the judgment entered thereon having been affirmed by the appellate division (one of the justices dissenting, and another not voting), the plaintiff appealed to this court.

Parker, C. J., and Gray, J., dissenting.

Wallace Thayer, for appellant.

Seward A. Simons, for respondent.

VANN, J. (after stating the facts).

The decision of this appeal turns substantially upon the following question: When an applicant for life insurance makes truthful answers to all questions asked by the medical examiner, who fails to record them as given, and omits an important part, stating that it is unimportant, can the beneficiary show the answers actually given, in order to defeat a forfeiture claimed by the insurer on account of the falsity of the answers as recorded, even if it was agreed in the application that the medical examiner, employed and paid by the insurer only, should not be its agent, but solely the agent of the insured?

The power to contract is not unlimited. While, as a general rule, there is the utmost freedom of action in this regard, some restrictions are placed upon the right by legislation, by public policy, and by the nature of things. Parties cannot make a binding contract in violation of law or of public policy. They cannot in the same instrument agree that a thing exists, and that it does not exist, or provide that one is the agent of the other, and at the same time, and with reference to the same subject, that there is no relation of agency between them. They cannot bind themselves by agreeing that a loan in fact void for usury is not usurious, or that a copartnership which actually exists between them does not exist. They cannot by agreement change the laws of nature or of logic, or create relations, physical, legal, or moral, which cannot be created. In other words, they cannot accomplish the impossible by contract. The parties to the policy in question could agree that the person who filled out part A of the application was the agent of the insured and not of the company. There is a difference in the...