Opinion
No. 32687.
April 12, 1937.
1. INSURANCE.
Insurer's failure to send to insured copy of application for reinstatement of lapsed life policy held not to preclude insurer from denying truth of statements in application for reinstatement because of statute requiring life insurance companies to deliver to insured, with policy, copy of insured's application, and in default thereof prohibiting such companies from denying truth of statements in application, since statute has reference to application upon which original policy is issued and not to any reinstatement subsequent to original delivery (Code 1930, sec. 5174).
2. FRAUD.
Statutory provision which deprives one of right to allege and to prove a material fraud, or which places any condition upon litigant's right to rely upon fraud as a defense, should not be extended by implication beyond plain meaning of statutory language.
APPEAL from chancery court of Lauderdale county. HON. A.B. AMIS, SR., Chancellor.
Edwin A. Dunn, of Meridian, for appellant.
This appeal involves the sole question of whether or not it was necessary for the insurance company to deliver to the insured a copy of the reinstatement application in order for the said company to be permitted to deny the truthfulness of the statements contained in said application.
Where section 5174, Code of 1930, does not specify or mention specifically an application for reinstatement, we think the language used in that part of said section, to-wit: "certificate or contract of insurance in any form" is broad enough to be construed in aid of the insured, as incorporating all applications for insurance, whether it be an application for reinstatement or otherwise. Our contention as to this construction of said section is highly bolstered by the case of Aetna Life Ins. Co. v. McCree, 164 So. 223, in which this court said, "This section should be liberally construed for the benefit of the insured."
Goodwin v. Provident Savings Life Assurance Assn., 59 Am. St. Rep. 411, 97 Iowa 226; New York Life Ins. Co. v. Burris, 165 So. 116; Franklin Life Ins. Co. v. Jones, 152 So. 285; Knights of Maccabees of the World v. Coleman, 91 So. 561.
The contract of the policy of insurance in question reads as follows: "This policy, together with the application therefor, a copy of which is attached hereto and made a part hereof, shall constitute the entire contract and all statements made by the member shall, in the absence of fraud, be deemed representations and not warranties, and no such statement shall be used to void this policy or in defense to a claim hereunder unless contained in said application and unless a copy of the application shall be attached to the policy when issued. No condition, provision or privilege of this policy can be waived or modified except by an indorsement hereon signed by the president, vice-president, the secretary, an assistant secretary, the actuary or an assistant actuary."
It is conclusive that the law requires a policy to contain the entire contract between the parties, and in this instance the above quoted contract requires the same. Then such being the case it was clearly understood and construed by the complainant that the said application for reinstatement was made a part of the said contract of insurance in question, and made so by the very terms and conditions of the said application itself, as written by the complainant, it being their own prepared form; said application states in part as follows: "I hereby agree on behalf of myself and my beneficiaries, that this application for reinstatement and the warranties contained herein shall become a part of my policy of insurance."
32 C.J., page 1285, par. 512, page 1357, par. 644; Sovereign Camp W.O.W. v. Farmer, 77 So. 655; Germania Life Ins. Co. v. Bouldin, 56 So. 609.
It is a fact that when the policy lapsed it was dead and there was then no insurance; and that the effect of the application for reinstatement was to revive the insurance, to create anew the former contract; that it was in effect an application for insurance that did not then exist. If this be so, then it performed exactly the same function as the original application, and is equally subject to the said section of the statute, and for the same reason.
Metropolitan Life Ins. Co. v. Scott, 134 So. 159; Kirkpatrick v. London Guarantee Acc. Co., Ltd., 139 Iowa 370, 115 N.W. 1107, 19 L.R.A. (N.S.) 102; Lenox v. Greenwich Ins. Co., 165 Pa. 575, 30 A. 940.
Therefore, we respectfully submit that the application in question was a part of the contract of insurance here involved, and that the complainant insurance company was bound by the provisions of its policy and contract of insurance under section 5174, Code of 1930, to deliver to the insured a copy of his application for reinstatement or to attach to or endorse upon said policy, said application or representations, in order to be permitted, "to deny that any of the statements in said application are true."
Sovereign Camp Woodman of the World v. Farmer, 77 So. 655, 116 Miss. 626; Knights of Maccabees of the World v. Coleman, 91 So. 561, 128 Miss. 854; Germania Life Ins. Co. v. Bouldin, 56 So. 609, 100 Miss. 660; New York Life Ins. Co. v. Burris, 165 So. 116, 174 Miss. 453; Franklin Life Ins. Co. v. Jones, 152 So. 285; New York Life Ins. Co. v. Russo, 122 So. 382, 154 Miss. 196; Metropolitan Life Ins. Co. v. Scott, 134 So. 159; Goodwin v. Provident Savings Life Assurance Assn., 59 Am. St. Rep. 411, 97 Iowa 226; Kirkpatrick v. London Guarantee Acc. Co., Ltd., 139 Iowa 370, 115 N.W. 1107, 19 L.R.A. (N.S.) 102.
Wells, Wells Lipscomb, of Jackson, for appellee.
Section 5174, Mississippi Code of 1930, is in derogation of the common law and should be strictly construed.
Section 5174, Code of 1930; Aetna Life Ins. Co. v. McCree, 164 So. 223; Dibrell v. Dandridge, 51 Miss. 55; Edwards v. Gaulding, 38 Miss. 118; Goodman v. Lang, 130 So. 50; Hollman v. Bennett, 44 Miss. 320; Linder v. Metropolitan Life Ins. Co., 255 S.W. 43; Rothschild v. New York Life Ins. Co., 162 A. 463; Travelers' Fire Ins. Co. v. Price, 152 So. 889.
The wording of our statute clearly shows that it applies only to the original application for insurance.
Section 5174, Code of 1930.
The reinstating or reviving of a policy of insurance is not the issuing of a contract of insurance.
Clarke v. Schwarzenberg, 41 N.E. 655; Great Western Life Ins. Co. v. Sanvely, 206 Fed. 20; Holden v. Metropolitan Life Ins. Co., 74 N.E. 337; Johnson v. County Life Ins. Co., 1 N.E.2d 779; Mutual Life Ins. Co. v. Lovejoy, 83 So. 591; New York Life Ins. Co. v. Buchberg, 228 N.W. 770; New York Life Ins. Co. v. Burris, 165 So. 116; Reed v. Missouri Mutual, 5 S.W.2d 675; Reidy v. John Hancock Mutual Life, 139 N.E. 538; State Mutual Life Ins. Co. v. Rosenberry, 213 S.W. 242; Wastun v. Lincoln National Life Ins. Co., 12 F.2d 422.
Decisions of the courts of other states in construing statutes similar to section 5174, Mississippi Code of 1930, hold that such statutes do not apply to a reinstatement application.
Holden v. Metropolitan Life Ins. Co., 74 N.E. 336; Linder v. Metropolitan Life Ins. Co., 255 S.W. 43; National Life Acc. Ins. Co. v. Nagel, 245 N.W. 540; New York Life Ins. Co. v. Max Buchberg, 228 N.W. 770; New York Life Ins. Co. v. Rosen, 236 N.Y. Supp. 659; Rothschild v. New York Life Ins. Co., 162 A. 463.
The contract of reinstatement was entered into in Washington, D.C., and is controlled by the laws of the District of Columbia.
Couret v. Conner, 79 So. 230; Hartford Acc. Ind. Co. v. Delta Pine Land Co., 150 So. 205; Hartford Acc. Ind. Co. v. Delta Pine Land Co., 292 U.S. 143; Price v. Harley, 107 So. 673; Public Act No. 436, 73rd Congress, chapter 5, sec. 2, par. 3; Section 5131, Code of 1930; Wastun v. Lincoln National Life Ins. Co., 12 F.2d 422.
Appellant was the sole beneficiary in a policy of life insurance issued by appellee. The policy lapsed for nonpayment of premiums, but was reinstated under provisions contained in the policy, among which was that the application for reinstatement must show the applicant to be in good health at the time of such application. It is undenied that the application for reinstatement was untrue in material particulars and that the falsity thereof was well known to the insured when made and forwarded to the company.
A copy of the application for reinstatement was not sent by the company to the insured, and for that reason appellant contends that under section 5174, Code 1930, the company is precluded from any denial of the truth of the statements in the said application for reinstatement; and this presents the sole issue for determination on this appeal.
The cited section 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 language of the statute plainly has reference to the application upon which the original policy is or was issued and delivered, and not to any reinstatement subsequent to the original delivery. To extend the language of the statute to make it mean that for which appellant contends, would be to indulge in judicial legislation, from which, under established principles, we must refrain. In addition, there is the salutary rule of controlling importance here, and that is that "any statutory provision which deprives one of the right to allege and to prove a material fraud, or which places any condition upon a litigant's right to rely upon fraud as a defense, should not be extended by implication beyond the plain meaning of the statutory language." New York Life Ins. Co. v. Buchberg, 249 Mich. 317, 228 N.W. 770, 772, 67 A.L.R. 1483. See, also, Linder v. Metropolitan Life Ins. Co., 148 Tenn. 236, 255 S.W. 43; Holden v. Metropolitan Life Ins. Co., 188 Mass. 212, 74 N.E. 337; National Life Ins. Co. v. Nagel, 260 Mich. 635, 245 N.W. 540; Rothschild v. New York Life Ins. Co., 106 Pa. Super. 554, 162 A. 463; New York Life Ins. Co. v. Rosen, 227 App. Div. 79, 236 N.Y.S. 659.
Had it been necessary that the old policy be surrendered and a new one issued and delivered, or had this, in fact, been done, it may be that a different case might be thereby presented; but so far as this record shows, the old policy remained in the possession of the insured at all times after its original issuance and delivery.
Affirmed.