Urwan v. Nw. Nat. Life Ins. Co.

• Decision Date: 23 June 1905
• Citation: 125 Wis. 349,103 N.W. 1102
• Parties: URWAN v. NORTHWESTERN NAT. LIFE INS. CO.
• Court: Wisconsin Supreme Court

125 Wis. 349

103 N.W. 1102

URWAN

v.NORTHWESTERN NAT. LIFE INS. CO.

Supreme Court of Wisconsin.

June 23, 1905.

Appeal from Circuit Court, Oconto County; Samuel D. Hastings, Judge.

Action by Frank A. Urwan against the Northwestern National Life Insurance Company. From a judgment in favor of plaintiff, defendant appeals. Affirmed.

This is an action to recover $159.55 paid by the plaintiff to the defendant February 5, 1903, as the first annual premium for a policy of insurance upon the plaintiff's life of $5,000, on the 20-payment life plan, to be issued by the defendant under the circumstances hereinafter named, with interest thereon from the day named. The complaint alleges in effect that, in making the application and paying the premium mentioned, the plaintiff was induced by the defendant by false and fraudulent representations made by the defendant to the plaintiff, and upon which the plaintiff relied, to wit: The defendant represented and guarantied to the plaintiff that by such application he would, if the same should be granted and the policy issued, thereby become a member of the defendant's state board of special agents in Wisconsin for 20 years, if his policy continued so long in force, and represented and guarantied to the plaintiff that his duties as a member of such board would consist solely in doing the things therein alleged and represented, and guarantied to the plaintiff that he would not and could not, under the defendant's rules, be removed from his position on the board except for cause, and after notice and hearing, and represented and guarantied to the plaintiff that, for his services as such member as therein set forth, he would receive as compensation the several amounts therein stated, which amounts were fixed and absolute, and depended upon no contingency, and represented and guarantied to the plaintiff that the premium upon his policy was fixed and unchangeable in amount, with no right under the law for the defendant to levy any assessment on the plaintiff or on any of its policy holders, or to reduce the amount payable to the plaintiff upon settlement under the policy; that such guaranties and representations were false and fraudulent in this: that the contract tendered by the defendant to the plaintiff differed in several respects, as therein stated, from the one so represented and guarantied (particularly as to the duties to be performed by the plaintiff, and as to his removal without notice or hearing, and as to his compensation being unfixed and dependent upon contingencies); that the defendant had the legal right to levy assessments upon the plaintiff and other policy holders; that the premium on the plaintiff's policy was not fixed and unchangeable; that the defendant had the right to reduce or scale down the amount to be paid to the plaintiff upon settlement under the policy--all of which facts were known to the defendant at the time and unknown to the plaintiff; that the plaintiff believed and depended upon such false and fraudulent representations and guaranties in making such application and paying such premium, and the same were a material consideration to plaintiff in making the contract; that the defendant knew that they were false and fraudulent, and that the plaintiff believed and depended upon them as material to the contract; that February 14, 1903, the plaintiff received by mail the policy of insurance so contracted for, and the contract referred to, as a member of the defendant's state board of special agents, which contract the plaintiff never signed, for the reason that after making such application he discovered that such representations and guaranties were false and fraudulent, as above stated, and as learned from such proposed written contract, and so refused to accept of such proposed contract and policy, and immediately notified the defendant of such nonacceptance, and held the same subject to the defendant's order, and offered to return the same, and demanded repayment of the premium so paid, all of which the defendant refused. The defendant answered by way of admissions, denials, and counter allegations to the effect that the written application should be the only basis for issuing the policy, and the same was issued thereon; that at the time of making such application the plaintiff also made application in writing to be appointed one of the defendant's special board agents, and he was thereupon duly appointed as such, without any consideration therefor.

A jury having been waived, and trial had, the court found, as matters of fact, in effect, that the plaintiff was induced to apply for such policy and contract, and pay the $159.55, by the defendant's representations that the plaintiff would, upon receiving the policy, thereby become a member of such board of special agents for 20 years, if the policy continued so long in force; that his duties as such member would consist solely in sending yearly the names of 10 persons who should be, in his judgment, good, insurable risks; that the plaintiff would and could not be removed except for cause, after notice and hearing, and that the plaintiff should receive as compensation therefor the several sums named in the complaint, which amounts were fixed, absolute, and depended upon no contingencies; that the written contract tendered by the defendant to the plaintiff in pursuance of such application did not require the plaintiff, in addition to sending 10 names, as mentioned, to perform all other duties required of him by the defendant, nor that the plaintiff might be removed as such member of the board without notice and hearing; that such written contract did not provide that the plaintiff should receive the fixed and stated sums as compensation as represented by the defendant, but, on the contrary, provided that he should share in a certain fund, the amount of which depends upon the amount of business to be done by the defendant each year, and that such representations that his compensation should be fixed and absolute were false; that such false representations were the inducement which caused the plaintiff to apply for such policy and contract, and pay the $159.55; that the policy and contract were so applied for and the $159.55 so paid February 5, 1903; that, promptly upon the receipt of the policy and contract, the plaintiff declined to accept the same, and promptly offered to return the policy and written contract, and demanded the repayment of the $159.55 so paid, but the defendant refused to accept the policy and contract and repay the money. And as conclusions of law the court found, in effect, that the plaintiff was entitled to judgment against the defendant for $159.55, with interest from February 5, 1903, and costs of suit. From the judgment entered thereon accordingly, the defendant brings this appeal.Burr W. Jones (Brown & Kerr, of counsel), for appellant.

Classon & Classon, for respondent.

CASSODAY, C. J. (after stating the facts).

The plaintiff's written application for insurance was made and signed by him February 5, 1903, and was in the usual form, with answers to questions by the medical examiner and the answers of the medical examiner, with this indorsement upon the margin in red ink: “It is agreed that the company is responsible for no representations not contained in its ratebook and printed matter.” The plaintiff's written application for appointment as one of the defendant's “board of special agents, limited to 400 full, or proportionate number of half members, under its special agent's contract for Wisconsin,” was made at the same time and was dated on the same day as the application for the policy; and it was therein stated, in effect, that the plaintiff understood that he should not be required to take out a policy because of his application, or the issuance to him of such agency contract, and that his compensation was to be for services actually rendered. That application was witnessed by the defendant's local agent, “P. J. Bryan”--the same person to whom the plaintiff paid the $159.55, and who “witnessed and recommended” the plaintiff's application for the policy. The policy and special agent's contract are both signed by the president and secretary of the defendant, and both dated February 11, 1903; being six days after the plaintiff had signed such applications. Such policy and written contract were received by the plaintiff by mail from the defendant February 14, 1903, accompanied by a letter from the defendant's president stating “in explanation” that such contract was “entirely independent of” the plaintiff's policy; that he would “be required to perform the duties set forth in the special contract”; and that he was “thereby advised” that it was “a rule of the company that, should a special agent holding special contract permit his policy to terminate by reason of nonpayment of premium,” it should “be deemed that he” had “ceased to give the company the benefit of his influence and good will,” and had “forfeited all rights under said contract,” and then, by way of postscript, added “that, in order to avail oneself of the privileges of the special contract, the agent must also continue payment of the premium for the full term provided by his policy.” The answer alleges and the defendant claims that the $159.55 here sought to be recovered back was paid by the plaintiff to the defendant exclusively as the first year's premium on the policy, and that that was a transaction entirely separate and independent of the plaintiff's application to be appointed as one of the defendant's board of special agents, mentioned, and which appointment was to be made without consideration. But in order to make such appointment effectual, the plaintiff was bound by the terms of the contract to continue the payment of the premium for the full term of the policy, and he was induced to pay the first year's premium on the policy in order to secure the special agent's contract as well...