Dwight v. Germania Life Insurance

At the close of the evidence on the trial the defendant moved for a dismissal of the complaint upon the ground, among others, that the uncontradicted evidence showed that the answers made by the assured, to certain questions in the application for insurance were false and untrue, and constituted a breach of warranty which avoided the contract. The trial court denied the motion and the defendant excepted. A further motion was then made for the direction of a verdict in favor of the defendant upon the same grounds, which was also denied by the court, and an exception taken thereto.

The main question discussed arises over the validity of these exceptions. It was assumed both by the trial court and by the General Term that by the terms of the policy the assured warranted the truth of the several answers referred to, and that, therefore, compliance with such warranty was a condition of the validity of the contract of insurance. This determination of the courts below was properly acquiesced in by the counsel for the respondents -upon the arguinent before us, as it could not have been successfully questioned.

It must, therefore, be assumed in the further consideration of this case, that any substantial deviation from the truth in the answers so given, was material to the risk, and constituted a ' breach of the terms of the contract, rendering the policy based upon such answers void. (Armour v. Transatlantic Fire Ins. Co., 90 N. Y. 450 .)

Parties to an insurance contract have the right to insert such lawful stipulations and conditions therein, as they may mutually agree upon, or which they may consider necessary and proper to protect their interests, and which, when made,

Such contracts are open to construction like all other contracts needing interpretation, but are subject to it only when upon the face of the instrument it appears that its meaning is doubtful or its language ambiguous or uncertain. (May on Ins., § 172.) An elementary writer says: “ Indeed the very idea and purpose of construction imply a previous uncertainty as to the meaning of a contract, for when this is clear and unambiguous there is no room for construction and nothing for construction to do.” (2 Pars, on Cont. 500.) The same author says: “ That courts cannot adopt a construction of any legal instrument which shall do violence to the rules of language or the rules of law,” and quotes the language of Lord Chief Baron Eyre in Gibson v. Minet (1 H. Bl. 569), that “all latitude of construction must submit to this restriction, namely, that the words may have the sense which by construction is put upon them.” (Id. 494.) Í In Parkhurst v. Smith (Willes, 332) Willes, J., says: “ I admit that though the intent of the parties be never so clear it cannot take place contrary to the rules of law, nor can we put words in a deed which are not there, nor put a construction on the words of a deed directly contrary to the plain sense of them.” Addison on Contracts (p. 165), lays down the rule that “ the judgment of the court in expounding a deed must be simply declaratory of what is in the deed. It has to ascertain, not what the party intended, as contra-distinguished from what the words express, but what is the meaning of the words he has used,” and “ when the words of any written

In considering the language of an insurance contract, the words of a promise are to be regarded as those of the promisor while those of a representation upon which the promise is founded are the words of the promisee, and are to be taken most strongly against the pnrty using them. (May on Ins., § 175.) In view of the fact that these principles have.been plainly disregarded by the courts below, we have thought it proper to refer more extensively to elementary authors than would otherwise have been deemed necessary. Their application will be seen by an examination of the situation of the case at the time the objectionable rulings were made.

Among the facts which the defendant deemed it important to know before entering into a contract of insurance with the. deceased, was his previous business and occupation. The materiality of truthful information in relation thereto was impressed upon the applicant by specific inquiries, and the requirement that truthful answers thereto should be made the condition of a valid contract. With the view of eliciting the information desired a series of questions was proposed to the deceased embracing not only an inquiry as to his general business and occupation, but special inquiries as to certain particular trades and employments. Among those which we deem it important to refer to in this case were the following :

“ A. For the party whose life is proposed to be assured, state the business carefully specified?” Ans. “Real estate and grain dealer.” “ B. Is this business his own or does he work for other persons and in what capacity ? ” Ans. “ His own.”

An application dated August 28, 1878, containing the questions and answers stated, was signed by Walton Dwight in his character of an applicant for insurance, and also in that of the assured, and was delivered by him to the defendant. In pursuance of the request contained therein, the defendant, on August 28, 1878, delivered to the applicant the policy in suit, containing among others these provisions: “ This policy is issued, and the same is accepted by the said assured upon the following express conditions and agreements: That the same shall cease and be null and void and of no effect * * * if the representations made in the application for this policy, upon the faith of which this contract is made, shall be found in any respect untrue.”

Dwight died November 15, 1878, immediately before the payment of a second quarterly premium became due; and'this action was commenced in April, 1879, about seven months after the delivery of the policy.

Upon the trial it appeared that Dwight was engaged in the business of keeping hotel in Binghamton from May, 1874, until March, 1877, and that during that period he regularly and systematically sold wines and liquors in bottles of various sizes, bearing the name of his hotel blown into the glass, to such of his guests as desired them. He kept a wine or liquor room in which was stored a large supply of wines and liquors, and each year while so engaged he applied, paid for and received from the representatives of both the State and National governments licenses and permits authorizing him to carry on the business of selling beer, wine and liquors at retail to be drank upon his |iremises. It also appeared that he kept no bar and did not sell to persons who were not his guests. These facts were undisputed. Their absolute truth was assumed by the trial judge in charging the jury, and by the General Term

Upon denying the motion for a nonsuit the trial court refused to pass upon the question as to whether the facts constituted a breach of warranty or not, but left it to the jury to say whether the sales of liquor proved to have been made were sales at all, within the intent and meaning of the contract. In this we think that the court erred, no question arising upon the evidence which authorized its reference to the jury. Tf.' there was any room for doubt in respect to the true meaning and intent of the inquiry answered by the deceased, it presented a question of law for the court to determine, and not one for the jury. (Lamer v. Meeker, 25 N. Y. 361 ; Glacius v. Black, 67 id. 563.) But we are of the opinion that no such doubt existed in the case.

The contract was in writing subscribed by the parties, and they expressed their agreement in clear, unambiguous and intelligible language. Its import and meaning was not obscured by reference to the situation and circumstances, surrounding the transaction, or by the consideration of other parts of the same instrument. On the contrary an examination of the context and associated questions make more certain and definite its object and intent. The assured had been previously interrogated as to his general business and employment, and it is to be assumed had given such answers in respect thereto, as satisfied the object of the inquirer. He was then specially requested to state whether he was then, or had been, engaged in or connected with the manufacture or sale of any beer, wine, or other intoxicating liquors. The information called for was made material, not only by the express agreement of the par

The question called for no opinion, and was capable of a precise, definite and categorical answer. It was intentionally framed in broad and comprehensive terms apparently to avoid any evasion of its object; but was, nevertheless, expressed in clear and unambiguous language. If an intention to inquire concerning the conduct of the regular or principal business of the assured could be implied from the use of the word “ engaged,” an idea that such was the only meaning of the question was negatived by the further words “ or connected with the manufacture or sale of any beer,” etc., which pointed unmistakably to every transaction of the kind described, however limited its character, or remote his connection with it, might have been.

The motive prompting the question was reasonable, natural and proper, and apparent even to the most careless reader. The inquiry could not have referred to the general business employment of the insured, because inquiries on that subject had previously been exhausted, and the question had no office to perform in that respect. It carried upon its face the object which the insurer had in asking it, and required an answer as to whether the applicant was, or had been, engaged in or connected with the manufacture or sale of liquors, etc., not in a limited or restricted capacity or employment, but in any and every way in which such acts could have been performed.

The question itself assumes that persons engaged in or connected with the manufacture or sale of liquors in any manner were more hazardous subjects for insurance than those occupied in more reputable employments, and that the- insurer would regard such employment as an objection to the proposed contract.

The extent to which the employment affected the character of the applicant, or his value as a risk, was a question solely for the insurer. The defendant had a right to a full and frank disclosure of any and all facts bearing upon the subject, and this confessedly it did not obtain. It was misinformed as to the precise fact which had been agreed upon as material

If the fair import of the language used, indicates that the interrogatory intended to include within its scope and meaning single transactions or incidental occupations, neither courts nor juries have authority to say that such transactions may properly be disregarded in the answer made. The defendant must be deemed to have meant what it said, and its express language embraces all transactions, and its express contract has made every transaction of the kind referred to material to the risk.

The legal effect of this contract can be avoided only by making a new one for the parties, or denying any significance to language. We are unable to see any ground upon which'the ruling of the trial court can be supported. The case of Moulor v. Am. Life Ins. Co. ( 111 U. S. 335 ) has been cited as tending to support the ruling. The question there arose under an exception to so much of the charge of the trial judge, as stated that if the answers to certain questions in the application under consideration wore untrue, the policy was void, whether the assured knew them to be so or not. The court held that a consideration of the language of the whole policy rendered it doubtful whether it was intended to warrant the absolute truth of the answers in question, without regard to the good faith of the assured in making them, and, therefore, held as a question of law that the instructions were erroneous and the exception well taken. This decision undoubtedly accords with the well-settled doctrine on the subject, but is not an authority upon the question here presented. (See Armour v. Transatlantic Fire Ins. Co., supra.)

When the tends and language of a contract am ascertained its meaning and intent present questions of law only, and it is the duty of the court and not of the jury to determine and declare what that is. Parsons on Contracts (vol. 2, p. 492) says, that the first rule in the construction of contracts is, “ that what a contract means is a question of law. It is the

It would seem from the authorities hereinbefore referred to that no questions affecting the interpretation of contracts can properly be submitted to a jury except those arising upon conflicting evidence as to the terms of the agreement, or where extrinsic evidence raises some doubt over the identity of the subject-matter, or of the claimants thereunder. (Add. on "Cont. 165.)

Instead of following the plain rule laid down in the authorities cited, the trial court assumed the existence of an ambiguity and referred the legal questions involved in the construction, of the contract to the jury for their speculations. The logical effect of such a disposition was a rule that contracts expressed in the same language and executed under the same circumstances might legally be held valid in one locality and invalid in another, according to the capricious and

The defendant was further prejudiced before the jury by the reference in the charge to the claim made by the plaintiff that the question was incapable of a truthful affirmative or negative answer, for it was said if he had answered it affirmativély, it would have been an admission of his connection with the manufacture of liquor, which concededly was not true, and it was implied therefrom that his only safe answer was a negative one. This circumstance was pointed out to the jury as having a bearing upon the question, and it was impliedly authorized to find that the question was equivocal, because not capable of a direct and positive answer. The reference was obviously misleading and erroneous, for the interrogatory being in the alternative, could truthfully have beén answered in the negative only in case the assured had been engaged in neither of the occupations referred to, and would have been answered truthfully in the affirmative, if he had been connected with either.

This error was further aggravated by the refusal of the court, upon request, to charge that the question could be truthfully answered in the affirmative if he had been connected with the sale of liquor. This refusal was clearly erroneous, and the exception taken thereto was well taken.

We are also of the opinion that the answers of the assured to the questions relating to his business and occupation, were evasive and untrue, and upon the whole evidence required the dismissal of the complaint. There was not only an absence of satisfactory evidence in the case that he had ever been engaged in the business of a real estate or grain dealer, for himself in the ordinary acceptation of those terms, but such an occupation was negatived by his repeated sworn declarations to the contrary, and the proof of circumstances of the most convincing character. The evidence upon these questions is substantially all to the same effect, and presents a case so preponderating in character that a verdict against it could not be allowed to stand. The case, therefore, presented a question of law as to whether the business engaged in by the deceased constituted him a dealer in real estate and grain, within the ordinary meaning of those terms.

Undoubtedly 'the onus of showing the falsity of the representations made by Dwight in respect to his business and occupation rested affirmatively upon the defendant, but when it had produced his sworn declarations, made but a few months previous to the representations, expressly negativing their truth, and the story of his life had been testified to, showing his constant employment in other occupations, it had overcome the presumption of truth existing in favor of the representations and made a casé calling for affirmative evidence to overthrow it. The plaintiffs, although surrounded during the trial with relatives and friends of Dwight, who were acquainted with his history and appeared as witnesses, and detailed his former occupation and employment, gave no such evidence. There is not a scintilla of direct evidence that Dwight had ever been in business as a grain dealer, and the circumstances of his life as disclosed by the proof show that he could not have been so

There is no evidence that during the ten years previous to the application, Dwight owned, bought, sold or dealt in real estate. It did appear that, at some period of 'his life, he had owned scattered parcels of wild land in three or four different States; but previous to the ten years referred to in the inquiry he had caused this property, so far as it had any appreciable value, to be conveyed to his wife, and it was thereafter owned by her and generally employed as security for borrowing money • upon, presumably for the purposes of its improvement. The evidence given to establish the falsity of the representations in

On July 31, 1878, in his first application, he describes himself as a general dealer in grain and produce, and his place of business as being mostly in Chicago. In subsequent applications he quite uniformly describes himself as a real estate and grain dealer, but occasionally varies the description by statements that “it was formerly real estate.” “Heal estate and grain dealer always.” “Formerly same, speculator, army, hotel-

The history of his life, as related by himself, shows that from 1868 to 1878 the only business or occupation, pursued by him in his own name was that of a hotel-keeper. All allusion to this business is suppressed in the application in question. From 1868 to 1874 he was engaged in building upon and improving about thirteen acres of land in Binghamton, and if this afforded any justification for his description of business as a real estate dealer, the conceded ownership of such property by his wife, rendered the declaration that such business was “ his own ” untrue.

The trial court, in charging the jury, stated that Dwight’s sworn declarations as to his business and occupation did not constitute an estoppel against the plaintiffs as to the truth of such statements. This may be admitted without invalidating their force as evidence of the facts stated. They did constitute evidence of such facts, and in the absence of countervailing evidence, became conclusive upon Dwight’s representatives as to such facts.

It is quite clear that these answers gave no information as to the actual employment and business of Dwight to the defendant, and would have been quite as correct and satisfactory if he had represented himself to be a geologist or professor of elocution.

We think it was clearly the duty of the trial court upon this evidence to have directed a verdict for the defendant.

It is claimed by the plaintiffs that if there is a scintilla of evidence in support of a proposition, or if the evidence against it does not amount to a demonstration, that a question is raised which must be left to the jury. We do not so understand the rule. If the. proof of a fact is so preponderating that a verdict against it would be set aside by the court

Many other questions arose under the various defenses presented upon the trial which would, if it were necessary to the decision of this appeal, be instructive and interesting to examine and discuss ; but in the view we have taken it would be a work of supererogation to do so.

The questions arising over the defense that the whole scheme of insurance conceived by Dwight originated in a design to cheat and defraud the insurers; and the further allegation that Dwight’s answer to the question, whether he ever had the disease of spitting blood, are among the most prominent of those presented upon the argument.

The circumstances of the case are quite extraordinary and unnatural, and might well give rise to various and conflicting theories and conjectures in the effort .to account for its strange and abnormal features ; but in view of the fact that a new trial must be ordered upon other grounds, it would serve no useful purpose to attempt to determine the questions raised thereby.

The judgments of the courts below are, therefore, reversed, and a new trial ordered, with costs to abide the event.

All concur, except Danforth, <T., dissenting, Milleb, J., not voting, and, Finch, J., taking no part.

Judgment reversed.