Summary
In Metropolitan Life Ins. Company v. Hall, 152 Miss. 413, 118 So. 826, 827, we announced that "The prima facie presumption is that all persons act honestly.
Summary of this case from Aponaug Mfg. Co. v. CollinsOpinion
No. 27427.
November 19, 1928.
1. FRAUD. Person alleging fraud must prove it by clear and convincing evidence, presumption being that all persons act honestly. Prima-facie presumption is that all persons act honestly, and person alleging fraud must prove it by clear and convincing evidence both in courts of law and in courts of equity.
2. INSURANCE. Evidence as to insurer's fraud in securing contract for insurance held insufficient for submission to jury ( Hemingway's Code 1927, section 5938).
In action to recover insurance premiums paid on a life insurance policy after insurer had notified insured that face value of policy would be reduced to an amount that premium would have purchased at the correct age of insured, in accordance with policy provisions and Hemingway's 1927 Code, section 5938 (Code 1906, section 2676), evidence as to insurer's fraud in securing contract held insufficient for submission to jury.
APPEAL from circuit court of Jones county, Second district, HON. B.F. CARTER, Special Judge.
Wells, Stevens Jones, for appellant.
There is absolutely no testimony whatsoever of any statement, made by the agent when the policy was delivered, tending to mislead the insured by a statement that he had recorded her answer as to age correctly, or that the provisions of the policy were exactly as applied for so as to throw the insured off her guard and mislead her into not reading the policy delivered to her, in accordance with the direction in bold type on the policy itself. Under these circumstances the insured, Mrs. Hall, is bound by all the provisions of the policy. She cannot lay the policy aside and contend that she does not know the provisions in the policy contrary to her interest. Home Mutual Fire Insurance Co. v. Pittman, 111 Miss. 420, 71 So. 739; National Union Fire Ins. Co. v. Provine, 148 Miss. 659, 114 So. 730; Germania Life Ins. Co. v. Bouldin, 100 Miss. 660, 56 So. 609; Coplin v. W.O.W., 105 Miss. 115, 62 So. 7.
There is no evidence in this record, with every just inference to be drawn therefrom, that either Mrs. Hall fraudulently endeavored to secure insurance at a cheaper rate than she was entitled to at her age, or was the agent, Valentine, endeavoring to trap or defraud? Fraud must not only be alleged, but must be proven by clear and convincing testimony. Carter v. Eastman Gardner, 95 Miss. 651; 27 C.J. 44; Willoughby v. Pope, 102 Miss. 28, 58 So. 706; Arndt v. Jefferson Standard Life Ins. Co., 97 S.E. 631; Rice v. Metropolitan Life Ins. Co., 98 S.E. 283; Home Insurance Co. of New York v. Horrell, 227 S.W. 931; Peterson v. Commonwealth Casualty Co., 249 S.W. 148; Snyder v. Wolvertine Mut. Motor Ins. Co., 204 N.W. 706; Bostwick v. Mutual Life Ins. Co. of New York, 67 L.R.A. 705; Simon v. Goodyear, etc., 44 C.C.A. 612, 105 Fed. 573, 52 L.R.A. 745. Collins Collins, for appellee.
Counsel argues that there is no fraud on the part of the agent of the insurance company with reference to the mis-statement of the age of the insured. We submit that the court has found that the plaintiff's version of the transaction is true. We concede that Mrs. Hall would be bound by the provisions of the policy as written, but she wouldn't be bound to make an examination of the policy with reference to a matter that she had told the truth about and the company had deliberately mis-stated in the policy. In other words, the company could not take advantage of its own wrong. It could not say that "I know it is true that I have defrauded you and made a mis-statement of your age, knowing what your age was, and knowing that you told me the truth about it, yet you cannot take advantage of my fraud, because you did not read the policy." See 26 C.J. 1147, 14 R.C.L. 1174; 32 C.J. 1267; McDonald v. Metropolitan Life Ins. Co., 68 N.H. 4; 13 C.J. 615.
Wells, Stevens Jones, in reply for appellant.
The policy states on its face that it contains the entire agreement and that its terms cannot be changed or its conditions varied except by written agreement, and that agents are not authorized and have no power to alter or to waive any provisions of the contract. These conditions written in bold type as a part of the policy contract were placed before the eyes of Mrs. Hall when her policy was delivered. There is no contention that she is mentally incompetent. On the contrary she is a woman of advancing years and splendid intelligence. She knows what she wants even to the point of suing for it. She knew at the time what her age was. The company did not. How can she, therefore, convince the executive officers of a fraud about which they knew nothing. But, says counsel, the local agent was in fact the company. Our answer to this is the very learned opinion of this court in New York Life Ins. Co. v. Odom, 100 Miss. 219, 56 So. 379, a case which reviews at length the authority of a local agent of a life insurance company, and the distinction between a soliciting agent of a life company and the general agent of a company having authority to issue policies as well as collect premiums. See, also, Crook v. New York Life Ins. Co., 112 Md. 268, 75 A. 388; 3 Cooley's Briefs on the Law of Insurance, 2486; Iowa Life Ins. Co. v. Lewis, 187 U.S. 335, 23 Sup. Ct. 126, 47 L.Ed. 204; Phoenix Mutual Ins. Co. v. Doster, 106 U.S. 33, 1 Sup. Ct. 18, 27 L.Ed. 65.
Counsel say that the company is attempting to reform the policy. The defendant has not asked for a reformation. This is not a suit by the company to reform or to change one word of the policy contract. The company was willing to stand on the contract and offered to stand on the contract and perform the contract as written. The Mississippi statute with reference to mis-statement of age is part of the contract. It is binding on both parties. The result is that the plaintiff got what she bargained for in the application, what the policy contract provided for, and what the statutes of Mississippi provide for, and therefore why has she any right to complain? She has had full protection. She received all she paid for and the company is guilty of no deceit whatever. This suit in its last analysis gets down to an allegation that the company itself has fraudently mis-stated the plaintiff's age. To state the proposition carries a sufficient answer.
Appellee brought this action against appellant in the county court of Jones county, to recover the insurance premiums paid by her to appellant on a life insurance policy issued to her by appellant, upon the ground that appellee was induced to apply for and accept the policy through false and fraudulent representations of appellant. There was a trial, and a judgment for appellee in the county court. From that judgment appellant appealed to the circuit court of Jones county, where there was a judgment for appellee, from which judgment appellant prosecutes this appeal.
Appellee's position is that the contract of insurance was procured through the fraud of appellant, and was therefore void, which, under the law, entitled her to recover back from appellant the weekly premiums she had paid for the insurance; while appellant contends that the evidence neither established, nor tended to establish, that the contract of insurance was procured by fraud on its part, and therefore it was entitled to a judgment.
The policy provided that, on the death of appellee, the beneficiary therein named should receive the sum of two hundred dollars and that the policy would be matured by the payment of weekly premiums of fifty cents per week, for a period of five years; and recited that appellee's age, at her next birthday, would sixty-two years. The application for the policy, which purported to have been signed by appellee, also stated that her age, at her next birthday, would be sixty-two years.
After paying the weekly premiums for more than four years, appellant discovered that, at the time of the application for and the issuance of the policy, appellee would have been seventy years of age, at her next birthday, instead of sixty-two, as stated in the application and policy. Thereupon, appellant notified appellee that, on account of the error as to her age when the policy was applied for and issued, in case of her death the beneficiary in the policy would only be entitled to ninety dollars, instead of two hundred dollars. Appellee refused to accede to appellant's contention in that respect, and demanded from appellant the return of the premiums already paid. This occurred less than a year but several months before the expiration of the five-year period provided in the policy for its maturity. Appellee continued, however, to pay the weekly premiums of fifty cents per week until the maturity of the policy, and then brought this suit to recover back all premiums she had paid. It will be seen, therefore, that this controversy arose between the parties more than four years after the issuance of the policy.
The policy contained a notice to the holder, in large type, in this language, "Please read your policy promptly upon receipt." On the second page of the policy, under the caption, "Option to surrender within two weeks," there was a stipulation that if the policy was not satisfactory or its conditions accepted, the appellee could surrender the policy for cancellation, and the premiums paid thereon would be at once returned. Appellee admitted, in her testimony, that the policy had been in her possession since its issuance. The evidence showed, without conflict, that at the age of seventy years, at her next birthday, the weekly premium of fifty cents per week would have purchased a policy for only ninety dollars, instead of two hundred dollars. This was shown by a mathematical calculation, based on the rate tables of appellant.
To make out her case of fraud in the issuance of the policy, the evidence was substantially as follows: That appellee was seventy-five years of age on the 9th day of September, 1927; that on October 28, 1922, she applied for the policy of insurance exhibited with her declaration; that she paid the premium therein provided for, of fifty cents per week, from October 28, 1922, to October 21, 1927, which paid the premiums in full for five years, provided in the policy for its maturity; that L.L. Valentine, the agent of appellant, solicited appellee's application for the insurance; that she told him that she was sixty-nine years of age at the date of the application, October 28, 1922; that Valentine told her that appellant would issue her a policy for two hundred dollars in consideration of the payment of a weekly premium of fifty cents, and that the policy would be paid up in full at the end of five years, or when appellee reached the age of seventy-four years; that appellee did not sign the application for the policy; that when the application was presented to her for her signature, she had no spectacles; that a few days prior thereto her spectacles had dropped into a stove and had been burned up; that she tried the spectacles of some one else, but could not see to write her name to the application; that in filling out the application she did not give her age to Valentine as sixty-two years, but stated to him that her age was sixty-nine years. Appellee testified that on April 14, 1927, she received a letter from the district agent of appellant, Mr. Ory (which letter was introduced in evidence), in which Ory copied a letter from the assistant secretary of the home office of appellant in New York, stating that, as her correct age was sixty-nine instead of sixty-two, as stated in the application of appellee, appellant would, in accordance with the provisions of the policy, reduce the face amount of the insurance from two hundred dollars, payable at her death, to ninety dollars. In that letter, reference was made to a letter from appellee, dated February 26, 1927, in which she gave as the date of her birth, September 9, 1853, and stated that she was not sixty-two years of age in October, 1922, but that at that time, at her next birthday, she would be seventy years of age. In that letter from appellee, she demanded the return of all premiums paid by her on the policy. Appellee admitted, in testifying, that the policy was delivered to her soon after it was issued; that it plainly showed its date, and that her age, at her next birthday, would be sixty-two, and admitted that the policy had been in her possession since November, 1922, up to some time in the fall of 1927, when it was delivered to her attorney, Mr. Collins.
Valentine, the agent of appellant, who induced appellee to apply for the insurance and filled out her application therefor, testified that he filled out the blanks in the application in accordance with the facts as stated to him at the time by appellee. In other words, that appellee stated at the time the application was made that her age was sixty-two instead of sixty-nine.
The policy of insurance contains this provision:
"If the age of the insured has been mis-stated, the amount payable hereunder shall be such as the premium paid would have purchased at the correct age."
Section 2676, Code of 1906 (Hemingway's 1927 Code, section 5938), provides that any mis-statement of age in a contract of life insurance shall not invalidate the contract, but, in such case, when death occurs, the beneficiary shall recover on the contract such an amount of insurance as the premium paid would have purchased for the insured at his actual age, reckoning his age according to the rate table of the insurance company issuing the contract.
The prima-facie presumption is that all persons act honestly. Fraud is never presumed. He who alleges fraud must prove it by clear and convincing evidence. This is true, both in the courts of law and in the courts of equity. Parkhurst v. McGraw, 24 Miss. 134; Dunlap v. Fox, 2 So. 169 (not officially reported); Carter v. Eastman Gardner Co., 95 Miss. 651, 48 So. 615; Willoughby v. Pope, 101 Miss. 808, 58 So. 706.
Conceding every material fact to exist which the evidence tended, either directly or indirectly, to establish, was the question of fraud in the making of the contract for insurance one for the jury? Putting it differently: Was there any substantial evidence tending to show that Valentine, the agent of appellant, who procured appellee's application for the insurance, fraudulently mis-stated her age in the application? We think the question must be answered in the negative. Giving the evidence on appellee's behalf its full force and effect, it simply means this: That Valentine, the agent of appellant, solicited appellee's application for the insurance; that, in filling out the application blank, he erroneously mis-stated her age. There was nothing in the evidence to show that this was done intentionally. For aught that appears in the evidence to the contrary, it occurred as the result of a misunderstanding by the agent of appellee's statement of her age. Simply the bald fact is shown — that appellee gave her age as sixty-nine, and appellant's agent wrote it down sixty-two. We think that fact alone was wholly insufficient to make an issue of fraud for the jury.
We are of opinion that the provision of the policy above quoted, with reference to a mis-statement of her age by the insured, and the statute above referred to, were intended to cover just such a character of mis-statement of age by the insured.
Reversed and judgment here for appellant.