Sun Life Assur. Co. of Canada v. Allen
Decision Date | 29 January 1935 |
Docket Number | No. 100.,100. |
Citation | 259 N.W. 281,270 Mich. 272 |
Parties | SUN LIFE ASSUR. CO. OF CANADA v. ALLEN et al. |
Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Suit by the Sun Life Assurance Company of Canada against Abe Allen and others, individually and as copartners doing business under the firm name of the Hand Baking Company, in which defendants filed a cross-bill. From a decree granting plaintiff the relief sought and dismissing the cross-bill, defendants appeal.
Affirmed.Appeal from Circuit Court, Wayne County, in Chancery; Lester S. Moll, judge.
Argued before the Entire Bench.
Samuel Shimans, of Detroit (Joseph B. Beckenstein and John Sklar, both of Detroit, of counsel), for appellants.
Walters, Carmichael & Head, of Detroit, for appellee.
Sun Life Assurance Company of Canada on October 5, 1925, wrote insurance on the lives of Abe Allen and Lukash Cap in the sum of $25,000, payable to Hand Baking Company, a copartnership, as beneficiary, and on January 6, 1926, issued a second policy on the same lives in the sum of $12,500, payable to the same beneficiary. Lukash Cap died August 2, 1927, the cause given in the certificate of death as ‘hemorrhage following ruptured gastric ulcer; contributory; medical.’ The death occurred within seventeen hours after he was ‘wrestling’ or ‘struggling’ with Elson, in which encounter Elson ‘squeezed to the bench’ his insured partner Cap.
Both policies contained the following provision:
The certificate of copartnership of defendant company which bore the date of August 30, 1924, was not filed until September 15, 1925, that being the day following the one upon which the application for the first policy was executed by Cap and Elson. This certificate names the copartners as Charles Elson, Rubin Goodstein, Abraham Allen, and Lukash Cap. Cap signed both the certificate and application by his mark.
The mortality among the partners of Charles Elson was rather high. Federowitz, a partner, died March 21, 1922, at the age of thirty-three, of either lobar pneumonia or delirium tremens, with $27,500 of life insurance payable to Elson, Goodstein, and Allen, for which application had been made on February 25, 1921. Stanislaus Bogacki, another partner, died at the age of forty-four from a cause given in his death certificate as ‘fall down stairs in home, fracture of skull, alcoholism,’ with $15,000 of insurance payable to the firm, the policy having been issued only three months after the death of Federowitz. Bogacki lived less than three years after his policy was issued. The record is silent as to Allen and Goodstein; all we know is they did not appear as witnesses in the instant case.
After the death of Cap, plaintiff refused to pay the amount of the policies, tendered repayment of the premiums, with interest, and demanded a return of all policies held by defendants. This tender and demand being refused, the insurance company filed a bill in equity on January 3, 1928, praying cancellation, alleging fraud and false representations, and upon filing a bond in the sum of $40,000, secured an injunction restraining actions at law on the policies. Defendants answered and by cross-bill prayed that the policies be declared valid and that plaintiff be ordered to pay the full amount claimed to be due. During the trial plaintiff withdrew from its bill all policies of insurance except those on the joint lives of Cap and Allen. Defendants appeal from a decree which granted plaintiff the relief sought and which dismissed defendants' cross-bill.
The evidence supports the finding of the trial judge that Cap was a drunkard at the time of the application and continued to be one until his death. Mrs. Krowiak, who had known him since his childhood in Poland, summed up the matter when she testified, ‘He only didn't drink at the time he didn't have anything to buy it with.’ Defendants' chief witness Elson, and the one most interested in the litigation, somewhat reluctantly corroborated the testimony of Mrs. Krowiak and the other disinterested witnesses as to Cap's habits. The testimony of former employees of defendant company precludes any possibility of a lack of defendants' knowledge on this point. They must have known Cap was a drunkard and yet Elson signed an application in which he declared as to the applicant: ‘That the life to be assured is now and usually in sound health; and agrees that this declaration, with the answers to be given by the life to be assured to the medical examiner, shall be the basis of the policy,’ etc. Cap, in answer to the questions of the examiner, represented his health as perfect and in one application stated that his use of wine, spirituous or malt liquors was confined to ‘not over a glass weekly’ and in the other to ‘a glass of beer occasionally.’ The transactions were, in the words of the trial judge, ‘conceived in fraud,’ in that the habits of the insured were misrepresented to the company. The misrepresentations materially affected the result and it is not necessary to show they were intentional. 3 Comp. Laws 1929, § 12444, and Krajewski v. Western & Southern Life Ins. Co., 241 Mich. 396, 217 N. W. 62.
While in equity the scope of the review of findings of fact is quite broad, State v. Venice of America Land Co., 160 Mich. 680, 125 N. W. 770, our examination of the record discloses no reason for reversing the finding of the trial judge that:
The evidence offered warrants the conclusion of the court below that Cap never was a real partner in the Hand Baking Company and that it had no insurable interest in his life. The mere existence of a legal partnership does no establish an insurable interest. As stated in United Security Life Insurance & Trust Co. v. Brown, 270 Pa. 270, 113 A. 446: See, also, Mutual Benefit Ass'n v. Hoyt, 46 Mich. 473,6 N. W. 497;Warnock v. Davis, 104 U. S. 775, 26 L. Ed. 924;Connecticut Mutual Life Ins. Co. v. Luchs, 108 U. S. 498, 2 S. Ct. 949, 27 L. Ed. 800; Wurzburg v. New York Life Ins. Co., 140 Tenn. 59, 203 S. W. 332, L. R. A. 1918E, 566. We have already indicated that the copartnership certificate was not filed until the day after the signing of the first application, and have commented on the absence of testimony by the partners except Elson. We find it impossible to hold that the partnership could have suffered so substantial a loss upon the death of Cap as to prefer his continued services to the insurance money. Everything points to the opposite conclusion. He had nothing to do with the management of the business; he was not an experienced baker; he had been employed in a stone quarry previous to his connection with the firm; his duties, when sufficiently sober, were to sweep the floors and tend the fires; he paid no money for a partnership interest valued at $20,000, but gave a note for $3,000 which was not produced at the trial; he had no interest in the firm real estate; Elson said he drew $50 a week, but this was disproved by the bank records which also failed to show him as a partner. His landlady testified in answer to defendants' question:
‘Didn't he tell you at that time that ‘Now that I am a partner I don't have to go to work; I can work whenever I want to?’'
‘No, he said this to me, ‘That he was not a partner, only a sweeper, and they had him insured only for this reason, to get money after his death.’'
Assuming that Elson was truthful when he said he took Cap in as a partner to avoid labor troubles, that would not be sufficient to show an insurable interest. Nor did Cap by counter signing the application procure the insurance himself; Elson signed the application, and paid the premiums for the copartnership. He was the moving spirit in the transaction and Cap was merely the stupid tool through which the fraud was perpetrated.
Defendants object to evidence introduced by plaintiff as to the insurance and death of Federowitz and Bogacki through which defendants collected large sums of money. They admit, however, that similar acts of misconduct may be shown where, as here, a fraudulent intent is alleged. See Beebe v. Knapp, 28 Mich. 53;Stranahan v. Fire Insurance Co., 242 Mich. 413, 218 N. W. 688, 689; and Bottomley v. U. S., Fed. Cas. No. 1,688, 1 Story, 135. But they argue that Mr. Justice Sharpe laid down the rule in the Stranahan Case that an interval of twenty months between the similar acts was too great. That case is not authority for such a conclusion, but rather for the proposition therein stated that ‘the test seems to be whether the earlier act was sufficiently near in point of time to permit a presumption to arise therefrom that the motive which it is sought to establish then existed.’
Mr. Justice Steere,...
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