Opinion
No. 29364.
May 4, 1931. Suggestion of Error Overruled June 1, 1931.
INSURANCE. Insurer's failure to deliver copy of application with life policy held not to preclude reliance on express conditions appearing in policy itself ( Code 1930, section 5174).
Life insurance policy in question was complete in itself and purported to contain in plain language all the terms, conditions, and stipulations of the contract. Both application and policy contained representations or stipulations in reference to the same subject-matter. Insurer in suit on policy offered to show breach of express conditions and warranties contained in policy. Evidence offered would also have had effect of denying or showing falsity of representations contained in application which was not delivered with policy.
APPEAL from circuit court of Adams county; HON. R.L. CARHAN, Judge.
Wells, Jones, Wells Lipscomb and W.R. Newman, Jr., all of Jackson, for appellant.
It is admitted by the defendant that a copy of the insured's application was not delivered to the insured with the policy, but it is our contention that due to the wording of the policy involved in this suit the appellant had a perfect right to offer evidence to substantiate and prove its special pleas even though a copy of the application was not attached to the policy. Section 5174 of the Code of 1930 in substance states that upon a failure to attach copy of the application to the policy the life insurance company shall not be permitted in any court of this state to deny that any of the statements in said application are true. It will be noted from the special pleas filed in this case that there is no attempt on the part of the appellant to show that any statements in the application for the insurance are untrue. The special pleas referred to in no instance mention the application, nor is the application mentioned at any other place on behalf of the appellant. It was not introduced into evidence by the appellant and was not made a part of this record by the appellant.
The provisions of the policy are clear and unambiguous. It states on its face that it constitutes the entire agreement between the parties and makes no reference to the application and does not endeavor to incorporate the application in the policy or make it a part of the contract. The policy is a contract in its entirety. This policy of insurance is not like most life insurance policies which do refer to the application and which do attempt to incorporate the application in the policy and which do not contain the conditions as set forth in this policy.
Failure to deliver copy of application with life policy did not preclude reliance on express condition appearing in the policy itself.
Kirkpatrick v. London Guarantee Accident Company, Ltd., 115 N.W. 1107; Connell v. Metropolitan Life Insurance Co., 16 Pa. Sup. Ct. Rep. 520; Panopoulos v. Metropolitan Life Insurance Company, 96 Sup. Ct. Rep. 325.
For other cases to the effect that where the application is not attached to the contract where the statute requires such attachment, holding that the contract and case is to be treated as if no application existed.
Lenox v. Greenwich Insurance Co., 165 Pa. St. Rep. 575; Norriston Title, etc., v. Hancock Ins. Co., 132 Pa. 385; Hebb v. Ins. Co., 138 Pa. 174; Morriss v. Mutual Life Ins. Co., 183 Pa. 563; Moore v. Bestline, 23 Pa. Sup. Ct. 6; Southern Life Ins. Co. v. Webber, 209 S.W. 716; Washington Fire Relief Ass'n v. Albro et ux. (Wash.), 226 P. 264; 14 R.C.L. 886; Metropolitan Life Ins. Co. v. Chappell, 269 S.W. 21.
The statute up for construction in this case is in derogation of the common law and should be strictly construed.
Goodman v. Lang (Miss.), 130 So. 50; Dibell v. Dandridge, 51 Miss. 55; Hollman v. Bennett et al., 44 Miss. 320; Edwards v. Gaulding, 38 Miss. 118.
Kennedy Geisenberger, of Natchez, for appellee.
While the Mississippi statute, section 5174, Code of 1930, applies to all policies of life insurance, the same is not true of the Iowa and Pennsylvania statutes. Therefore, it necessarily follows that the cases interpreting and construing the statutes of those states, and laying down rules of law thereunder, are not authorities upon the construction of our statute, and this, of course, applies with equal force to the cases from other jurisdictions cited in appellant's brief which follow the holding of the Iowa and Pennsylvania cases.
The purpose of the statute, section 5174, is not, as appellant claims, the same as the statute requiring proffert to be made of certain documents; if it was, then it could have been incorporated in the same section of the code dealing with proffert. Proffert has to do with evidence and rules thereon, but this section of our code, has been held by our court to be not one laying down a rule of evidence or procedure, but to be a rule of substantive law.
Sovereign Camp of Woodmen of the World v. Farmer, 77 So. 655; Hartford Accident and Indemnity Co. v. Natchez Investment Co. et al., 119 So. 366.
Each and every word of section 5174 having been written into the policy of insurance issued by appellant, it would do violence to both the law and to common sense to consider for one moment that the so-called warranties and conditions precedent, contained in said policy, so far as they relate to the diseases and ailments mentioned in the application, can have any force or effect whatsoever as against the rights of the plaintiff to a judgment in this case, for the very plain and simple reason that the contract would be worse than ambiguous — it would be one whose terms were altogether contradictory, and one in which each succeeding provision denies the one preceding.
While the penalties of the statute may be somewhat severe, nevertheless, their necessity was made clearly apparent before they were at last passed into law. And it is so easy for the insurance companies to comply with the statute and escape the effects of noncompliance, that it is hard to conceive why they will ignore it. In the case at bar, for instance, they require the application, receive it, had it at their home office. It would have been only a matter of putting it in the folder with the policy itself and delivering it to the insured to avoid any such questions, as are now before this court, from arising.
In the case of New York Life Ins. Co. v. Rosso, 154 Miss. 196, 122 So. 382, the court held that by failure to deliver to the insured a copy of an amendment to his application the insurance company was estopped and precluded from denying the truthfulness of the allegations therein contained and this holding was made by our court in the face of the fact that the original application was endorsed on the policy and made a part of it, and, by its terms, defeated recovery by the insured if he was then suffering from any of the excepted diseases or had made any material misstatements therein.
The appellee, Clarence Scott, administrator of the estate of Hattie Scott, deceased, instituted this suit in the circuit court of Adams county against the appellant, Metropolitan Life Insurance Company, seeking to recover on a policy of life insurance for five hundred dollars issued to the said Hattie Scott, and payable, in the event of death of the insured prior to the date of the maturity of the endowment, to the executor or administrator of the insured. Upon the trial of the cause there was a verdict and judgment in favor of the appellee, which was entered in pursuance of a peremptory instruction so directing, and from this judgment this appeal was prosecuted.
The policy of insurance was issued by the appellant on the 1st day of October, 1929, and the insured died on the 23d day of December, 1929. The policy, the original of which was filed as an exhibit to the declaration, provided, among other things, that "if, (1) the insured is not alive or is not in sound health on the date hereof; or if (2) before the date hereof, the insured has been rejected for insurance by this or by any other company, order or association, or has, within two years before the date hereof, been attended by a physician for any serious disease or complaint, or, before said date, has had any pulmonary disease, or chronic bronchitis or cancer, or disease of the heart, liver or kidneys, unless such rejection, medical attention or previous disease is specifically recited in the `Space for Indorsements' on page 4 in a waiver signed by the secretary or an assistant secretary; or if (3) any policy on the life of the insured hereunder has been previously issued by this company and is in force at the date hereof, unless the number of such prior policy has been endorsed by the company in the `Space for Endorsements' on page 4 hereof (it being expressly agreed that the company shall not, in the absence of such endorsement, be assumed or held to know or to have known of the existence of such prior policy, and that the issuance of this policy shall not be deemed a waiver of such last mentioned condition), then, in any such case, the company may declare this policy void and the liability of the company in the case of any such declaration or in the case of any claim under this policy, shall be limited to the return of premiums paid on the policy, except in the case of fraud, in which case all premiums will be forfeited to the company."
To the declaration the appellant filed a plea of the general issue and three special pleas, setting up as a defense to the policy that the company agreed to pay the face amount of the insurance "subject to the conditions below and on page 2 hereof, each of which is hereby made a part of this contract, and contracted by the insured and every person entitled to claim hereunder to be a part hereof," and that under the heading of "Conditions" on page 2 of said policy contract are found the provisions quoted above, and particularly set forth that on the date of the policy the insured was not in sound health, that within two years before the date of the policy she had been attended by a physician for a serious disease or complaint, and that on or before the date of the policy the insured had serious pulmonary diseases and diseases of the kidneys and liver, to-wit, interstitial nephritis, or Bright's Disease, grippe, and acidosis. These several pleas further averred that there were no waivers whatever of said conditions indorsed on the policy and that, on account of the breaches of the above-quoted conditions, the appellant had exercised its contract right to declare the policy sued on void, and had offered to return to appellee the premiums paid on said policy, and tendered into court with said pleas the amount of said premiums, and all costs incurred to the date of such tender.
To these special pleas the appellee filed replications averring, in substance, that he ought not to be barred of recovery by reason of anything set up in said pleas, because the said appellant required the insured, Hattie Scott, to sign a written application and make answers to questions therein contained; that the answers of said insured to these questions show that at the time she made such application she was in sound health, and was not suffering from any of the diseases or complaints mentioned in said pleas, and that she had not been under the care of a physician within two years. It further set up that neither the original nor a copy of said application was delivered to the insured with the contract of insurance issued to her by appellant, and that, under and by virtue of the provisions of section 5174, Code of 1930, the appellant cannot now deny in any court of this state that any of the statements contained in said application are true.
To these several replications appellant first filed demurrers which were overruled; thereupon it filed rejoinders, which, in substance, averred that it ought not to be precluded from setting up and proving the facts stated in its several special pleas by reason of the application for insurance not having been attached to the policy of insurance, because the policy of insurance sued on constitutes the entire contract between the appellant and the insured, and said application for insurance is not made a part of the contract for insurance, but the policy itself sets up that it is the entire agreement between the appellant and the insured, and consequently there was no necessity for attaching said application to the policy or delivering a copy to the insured in order for it to be able to set up and prove the defenses to said policy of insurance set forth in its special pleas; that it is not setting up or relying upon misrepresentations in the application for the policy of the insurance, but is relying solely and wholly upon breaches of the conditions precedent to the policy taking effect as contained in the policy itself, irrespective of the application, the conditions hereinbefore quoted being again set forth at length. Demurrers to these rejoinders were overruled, and thereupon the cause proceeded to trial.
There was testimony offered tending to support the pleadings of respective parties, and, at the conclusion thereof, the court excluded all the testimony offered by the appellant to support the defenses set up in the several special pleas, on the ground that a copy of the application, was not delivered with the policy, and that consequently, by reason of the provisions of section 5174, Code of 1930, the appellant was not permitted to deny any of the statements in said application.
This ruling of the court, as well as its rulings on the demurrers to the replications to the appellant's second and third special pleas, presents for decision the question of whether or not evidence may be offered to show a breach of express conditions and warranties contained in a policy of insurance when the establishment of such a breach would have the effect of denying or showing the falsity of representations contained in an application for insurance, which was in no way referred to in the policy and was not attached to the policy or delivered to the insured.
Section 5174, Code of 1930, reads as follows: "All life insurance companies doing business in the state of Mississippi shall deliver to the insured with the policy, certificate or contract of insurance in any form a copy of the insured's application, and in default thereof said life insurance company shall not be permitted in any court of this state to deny that any of the statements in said application are true."
The contention of the appellee in the lower court and on this appeal is that, since the insured represented in the application that she was of sound health and had not within two years been attended by a physician for any serious disease or complaint, and that on or before the date of the policy she had not had any of the enumerated diseases, the appellant will not be permitted to show a breach of conditions or warranties in the policy relating to the same subject-matter, for the reason that no copy of the application was delivered to the insured with the policy.
The appellant by its pleadings did not rely upon the falsity of any statements or the breach of any warranty found in the application itself, but relied exclusively upon the terms of the policy as the basis of the defenses interposed, and it contends that the existence of an application not incorporated into or attached to the policy by reference, and not delivered to the insured with the policy, does not preclude it from relying on breaches of conditions or warranties contained in the policy itself.
One evident purpose of the statute requiring the delivery to the insured of a copy of the application is to exclude or eliminate from the contract an application, a copy of which is not delivered to the insured with the policy, and to render ineffective any defenses or attempted defenses based upon anything contained in such application, but it does not follow that a failure to incorporate in or attach to the policy a copy of the application will preclude the company from relying on any defenses available to it under the terms of the policy. In the policy here involved there is no language or provision indicating a purpose or attempt on the part of the appellant company to make anything found in the application a part of the contract. The policy was complete in itself, and purports to contain in plain language all the terms, conditions, and stipulations of the contract, and we do not think the company is precluded from relying on the express conditions and stipulations appearing on the face of the policy, by reason of the fact that the application contained representations or stipulations in reference to the same subject-matter. When the company chose to ignore the statements and representations appearing in the application, and incorporated in the policy in plain terms the conditions and stipulations upon which its validity should rest, and the policy was accepted by the insured as constituting a contract, it had the right to make any defenses it might have under the terms of the policy, without reference to such application. In support of the views above expressed, we refer to the case of Kirkpatrick v. London Guarantee Accident Co., Ltd., 139 Iowa, 370, 115 N.W. 1107, 19 L.R.A. (N.S.) 102, and authorities there cited, wherein the supreme court of Iowa had under consideration a statute which, in effect, is practically the same as section 5174, Code of 1930, and in a well-reasoned opinion reached a conclusion in accord with the views above expressed.
It follows from the views herein expressed that the appellant's demurrers to the replications to the second and third special pleas should have been sustained, and that the court below committed error in excluding the evidence tending to support the averments of the several special pleas. In addition to the averments of the replication to the first special plea in reference to the application and the failure of the appellant to deliver a copy thereof to the insured, this replication contained a traverse of the averments of the plea, and the general demurrer to this replication was properly overruled. For the errors indicated above, however, the judgment of the court below will be reversed, and the cause remanded.
Reversed and remanded.