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 thereupon made for the direction of a verdict in favor of the defendant, upon the same grounds, which were also denied by the court, and an exception was taken thereto. The .main question in the case which we shall discuss arose over .the validity of these exceptions.

It was assumed, both by the trial court and by the general

Parties to an insurance contract must 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, must be construed and enforced, like all other contracts, according to the expressed understanding and intent of the parties making them. If an insurance policy, in plain and unambiguous language, makes the observance of an apparently immaterial requirement the condition of a valid contract, neither courts nor juries have the right to disregard it, or to construct, by implication or otherwise, a new contract in the place of that deliberately made by the parties. Appleby v. Astor Fire Ins. Co., 54 N. Y., 253 ; Foot v. Ætna Ins. Co., 61 id., 571; Graham v. Fireman's Ins. Co., 87 id., 69; Armour v. Transatlantic Fire Ins. Co., supra.

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 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. 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.” 2 Pars. Cont., 494. In Parkhurst v. Smith (Willes, 332), Willes, J., says: “I admit that, though the intent of the parties be ever so clear, it cannot take place contrary to the rules of law, nor can we put words in a

In view of the fact that these principles have beep, 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 objectional 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. Answer. Real estate and grain dealer. B. Is this business his own, or does he work for other persons, and in what capacity? A. His own. 0. In what occupation has he been engaged during the past ten years? A. Real estate and grain dealer.

An application, dated August 28, 1878, containing the questions and answers stated, was signed by Walton Dwight in his character of 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 respects 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 at Binghampton 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 in 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 promises. 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 in passing upon the appeal to that court; That the answer given by Dwight to the questions relating to the sale of liquor was incorrect was admitted by both tribunals. That Dwight did not misconceive the .meaning and intent of the question conclusively appeared from repeated answers made by him to other companies within three weeks prior to this time to similar questions in applications for other insurance, in which he stated that he had kept a hotel for three years in which liquor was sold in packages.

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

The question called for no opinion, and was capable of á precise, definite, and categorical answer. It was intentionally framed in broad and comprehensive terms, apparently to avoid every evasion of its object, but was nevertheless expressed in clear and unambiguous language. If an intention to enquire concerning the conduct of the regular or principal business of the assured could be implied from the use of the words “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 making it, and required an answer as to whether the applicant was or had been engaged in or connected with the manufacture or sale of

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 a fact material for it to know in determining the propriety of entering into the proposed contract, and by the party who had assented to the proposition that such information should invalidate any contract made. If the fair import of the language used indicates that the interrogator 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 of language. We are unable to see any ground upon 'which the ruling of the trial court can be supported. The case of Moulor v. American IAfe Ins. Company ( 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 then under consideration were 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 instruction^ were erroneous, and the exception well taken. This decision undoubtedly accords with the well settled doctrine on the subject, but is not authority upon the question here presented. See Armour v. Transatlantic Fire Ins. Co., supra.

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 when extrinsic evidence raises some doubt over the identity of the subject-matter, or of the claimants thereunder. Addison, 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 the holding 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 often conflicting opinions of juries. The theory upon which the trial court submitted the case to the jury is implied from the circumstances pointed out in the charge for its consideration. Its attention was directed to the fact that Dwight kept no bar, and did not sell liquor to people generally, but only to

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 affirmatively, 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 been 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, for the reasons stated, of the opinion that upon this branch, the case presented no question for the jury, and the court erred in denying the motion for a nonsuit. Lomer v. Meeker, 25 N. Y., 361 ; Appleby v. Astor Fire Ins. Co., supra; Glacius v. Black, supra.

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 complaints. 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 acceptation was negatived by his repeated sworn declarations to the contrary, and the proof of circumstances of the most convincing character. The

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 declaration, 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 case 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 employed. He had never resided at Chicago, the alleged theater of his dealings in grain, and had never been there except for a short period in the spring and summer of 1878, during which he was a bankrupt, hopelessly in debt, and precluded much of the time by sickness from engaging in any business. The plaintiffs did not produce the slightest proof of any such occupation, and the only evidence referring to it was Dwight’s statements, made in a gasconading manner, to one of the defendant’s witnesses in June, 1878, and incidentally appearing in evidence, in which he said “that he had been to Chicago, and just returned; that he went there to make some money, and went into partnership with a couple of brothers who had money, but no experience, and he .wanted to operate in grain. In two transactions he cleared $30,000, and was taken sick, and his partners thought he made money so easy they could do the same, and while he was sick, they, on their operations, lost the $30,000 he had made, so that left him without a dollar. ” This declaration was obviously not made to inform any one as to his business, but apparently with the object of exalting his own sagacity and shrewdness; and, if it could be considered any evidence of his calling, was of the most inconclusive character, and showed that the business, whatever it was, had been abandoned in June, 1878, and never after resumed. It falls far short of being sufficient

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 fife, 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, probably for the purpose of its improvement. The evidence given to establish the falsity of the representations in question consisted largely of the sworn statements of Dwight made between December, 1877, and March, 1878, in bankruptcy proceedings, in which he testified, among other things : “I think I opened the Dwight House in May, 1874. I furnished part of it then, and ran it partly as a hotel, and rented part of it in the spring of 1875.” :£ The only business I had was the Dwight House business and livery. The other business was my wife’s business, although I had always kept it as my own account.” 151 kept no open bar. Liquors were sold in packages. I should think I had some two or three thousand dollars’ worth of those when I opened the house. The stock was larger then than at any time afterwards. That included liquors I took out of my private house— some six or seven hundred dollars’ worth of liquors that were not invoiced. I kept wines, liquors and cigars all through my business.” ££I say the Dwight House was the only business I had as a regular business. ” Question. When did tho Dwight House open? Answer. It opened in 1874, the 26th day of May, I think. Q. And closed when ? A. It closed the 8th day of March, 1877. Q. I understand you made your settlement on your wife about when ? A. It was done in the latter part of June or July, 1868. Q. From that time, dowm to the time of the commencement of the Dwight House business, had you any business of your own ? A. I had not—not further than my lawsuits, general living, and the like of that. I had no business of my own.”

In addition to this explicit evidence of the untruthfulness of his representations, it appears from an examination of the application made by him for insurance during the month of August, 1578, that his representations as to his business and occupation were quite contradictory and misleading. On July 31, 1878, in his first application, he describes himself as a general dealer in gram and produce; and his place of business as being mostly in Chicago. ■In subsequent applications he quite uniformly describes

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. allusions 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 of 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 to be' correct, 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 plaintiff 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 of its incorrectness, 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 beset aside by the court as contrary to the evidence, then it is the duty of the court to direct a verdict People v. Cook, 8 N. Y., 67 , Wilds v. Hudson R. R. R. Co., 24 id., 433; Appleby v. Astor Ins, Co., supra; Kelsey v. Northern light Oil Co., 45 N Y., 509 ; Cagger v Lansing, 64 id., 427; Neuendorff v World Mutual Ins. Co., 69 id., 392

It was said in Bautec v. N. Y. and H. R. R. R. Co. ( 59 N. Y, 356 ), by Judge Alien, that “it is not enough to.

In Hyatt v. Johnston ( 91 Pa. St., 200 ), Justice Sterrett’ says: “Since the scintilla doctrine has been exploded both in England and in this country, the prehminary question of law for the court is not whether there is literally no evidence, or a mere scintilla, but whether there is any that ought reasonably to satisfy the jury that the fact sought to be proved is established;” citing Ryder v. Wombwell (L. R., 4 Exch., 39).

The rule held by the supreme court of the United States is expressed by Mr. Justice Clifford in Improvement Co. v. Munson ( 14 Wall., 442 ) as follows: “Uor are judges any longer required to submit a question to a jury merely because some evidence has been introduced by the party having the burden of proof, unless the evidence be of such a character that it would warrant the jury in finding a verdict in favor of that party. Formerly it was held that, if there was what was called a scintilla of evidence in support of a case, the judge was bound to leave it to the jury; but recent decisions, of high authority, have established a more reasonable rule, that in every case, before the evidence is left to the jury, there is a preliminary question for the judge, not whether there is literally no evidence but whether there is any upon which a jury can- properly proceed to find a verdict for the party producing it, upon whom the onus of proof rests. To the same effect are Pleasants v. Fant ( 22 Wall., 120 ); Commissioners, etc., v. Clark ( 94 U. S., 284 ); Griggs v. Houston (104 id., 553); Bagley v. Cleveland Rolling Mill ( 21 Fed. Rep., 159 ); Wittkowsky v. Wasson ( 71 N. C., 451 ).

We think this a case where the conclusive character of the proof required the application of the rule, and that the court should have intervened to prevent a verdict upon evidence so insufficient to support it.

Many other questions arose under the various defenses presented upon the trial, which would, if it were necessary to the decision to 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 and carried into effect by Dwight originated in a design to cheat and defraud the insurers, and the further

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

All concur, except Danforth,-J., dissenting, Miller, J., not voting, and Finch, J., taking no part.