Opinion
May 6, 1908.
Henry W. Pottle, for the appellant.
Philip V. Fennelly, for the respondent.
In June, 1905, the defendant issued to the plaintiff an accident and health insurance policy whereby it agreed to pay the plaintiff for total accident disability forty dollars per month and a less sum for partial disability. The plaintiff on April 10, 1906, fell on a defective sidewalk, fracturing his ankle and sustained other injuries, and has recovered a judgment on the policy by reason of these injuries, and their extent and the amount of the liability of the defendant are not involved if the policy was in force at the time of the disability.
In his application the plaintiff agreed that the statements contained therein were warranties, among which were the following as they are embodied in the policy issued: The applicant agreed to report to the defendant if he took any other accident or health insurance. Then appeared these provisions: "I have no Accident or Health Insurance issued by Stock Companies, Assessment or Fraternal Associations, except as follows: * * * No application ever made by me for Insurance has ever been declined, and no Accident or Health Policy issued to me has been cancelled, or renewal refused, except as herein stated."
On November 15, 1904, the plaintiff had applied to the Prudential Insurance Company of America for a policy on his life, which, as defendant claims, was rejected, and for that reason contends that the policy it issued to the plaintiff never had any vitality.
There is no question in the application which specifically calls upon the plaintiff to disclose whether he has ever been rejected by a life insurance company. The general statement is made that no application for insurance has been declined. This statement follows the declaration that the applicant has no accident insurance, and precedes one in the same clause that no such policy has been canceled or renewal refused, and the plaintiff might well have inferred that the inquiries were directed solely to accident or health insurance. To analyze a little further the scope of the information sought to be obtained by the defendant — it first desired to know if the applicant carried any other accident or health insurance. It also wished to be informed if any accident or health policy had been canceled or refused. In parity with these inquiries it desired to know if any application had ever been declined. No one would be expected to single out the last inquiry as extending to an application for a life policy. The subject-matter of all these inquiries to gain information was only accident or health insurance.
An insurance company which is making every statement, whether material or otherwise, a warranty must be held to a very strict rule when it is endeavoring to avoid payment on its insurance contract because of answers to inquiries or declarations which it has framed. They must be so plain and intelligible that any applicant can readily comprehend them. If any ambiguity exists the construction will obtain most favorable to the insured. ( Dilleber v. Home Life Ins. Co., 69 N.Y. 256, 262 et seq.; Robinson v. Supreme Commandery, 77 App. Div. 215, 218; affd., 177 N.Y. 564.)
The defendant might easily have extended its statements to include the rejection by a life insurance company, and then the warranty, if false, might have avoided the policy. It cannot, however, by an uncertain phrase dependent upon an interpretation favorable to itself deprive the plaintiff of the benefit of a policy for which he has paid and honestly believed was in full force. Literally construed, if the plaintiff's application for a fire insurance policy had been declined the policy in suit would be void from its inception.
While all the statements of the plaintiff are made warranties, it may not be out of place to refer briefly to the evidence of the alleged misstatement in his application. One Harris was the solicitor who obtained the application of the plaintiff for the life insurance policy. The application for the present policy was also procured by Harris. The Prudential Company rejected the application for the life policy on the ground that the applicant was afflicted with valvular disease of the heart, and notice of its rejection was sent to Harris, who informed the wife of the plaintiff that the application had been postponed, and in three months he would "reopen the case." The plaintiff never knew that his application had been declined. There was no intended falsity in the statement that he made. Harris, who supervised these answers, never suggested that the general declaration — no application for insurance had been declined — might comprehend the application for life insurance. It is fair to assume that even the agent or broker never understood that it is so sweeping in its import as is now claimed.
Within ten days after he was injured, the plaintiff notified the defendant of his accident and injuries. By the terms of the policy affirmative proof of the injury must be furnished the company within thirty days "of the termination of disability." The plaintiff was "totally disabled" for three months, and for some time after that was "partially disabled." July 17, 1906, and before the plaintiff's cause of action had accrued, the defendant sent a draft to him for seventeen dollars, the amount of the premiums which he had paid, and advised him the policy was void by reason of the falsity of the alleged warranty already adverted to. Later the plaintiff sent a check for one dollar in payment of his premium, which the defendant also returned. The plaintiff retained both the draft and check, and tendered them to the defendant on the trial. The defendant claims that the sending of the draft and its retention by the plaintiff were a satisfaction and settlement of the claim.
There was no disputed demand. The plaintiff's claim had not yet matured, and the amount to which he would be entitled eventually was not then ascertainable. The defendant was not attempting to compromise a disputed claim, but was repudiating its contract. The draft it sent was not to pay the plaintiff's claim for injuries. It was sent to emphasize its position that the contract was void and no liability existed. The draft was not used and there was no accord and satisfaction. ( Laroe v. Sugar Loaf Dairy Co., 180 N.Y. 367; Eames Vacuum Brake Co. v. Prosser, 157 id. 289; Bowery Bay Building Co. v. Rossiter, MacGovern Co., 113 App. Div. 652.)
The judgment should be affirmed, with costs.
All concurred.
Judgment and order affirmed, with costs.