In Karp v. Metropolitan Life Ins. Co., 86 N.H. 124, 164 A 219, the policy had a provision for sound health at date of issue.Summary of this case from Grover v. John Hancock Ins. Co.
Decided January 3, 1933.
A stipulation in the application for a life policy that "the policy shall not be binding upon the company unless upon its date [the applicant] . . . shall be in sound health" is an express condition precedent to any liability on the part of the insurer, and the fact that the applicant was afflicted at that date with valvular disease of the heart establishes the non-fulfilment of that condition. The fact that in such case the applicant is ignorant of the affliction does not prevent the operation of the condition. Nor in such case is the insurer estopped from asserting the condition by reason of the fact that its agent being innocent of any fraud and ignorant, without fault, of assured's condition, failed to ask specifically every question in the application blank. An assured's failure to read the policy or otherwise learn of its provisions furnishes no ground for nullifying its conditions.
ASSUMPSIT, upon a policy of life insurance. Trial by the court and verdict for the plaintiff. Transferred by Burque, J., upon the defendant's exceptions to the findings and rulings of the court and to the denial of its motion for a verdict as a matter of law.
From the findings of the court and the exhibits in the case, the following facts appear. March 23, 1929, Zofia Karp, mother of the plaintiff, applied for the policy in question. Both the applicant and the agent were Polish, and the language used between them was Polish, since the former had no knowledge of English. The application contains the following statement: "1. I have never had any one of the following complaints or diseases . . . disease of the heart . . ." The court found that "the only question asked the applicant was whether she had had a serious sickness during the last three years and had had a doctor therefor. The applicant's answer was `No,' and from that information the agent filled out the answers" to the above question, and others which appear in the same part of the application. Neither questions nor answers were read to the applicant. The policy was issued May 1, 1929, and delivered May 18, 1929.
The assured died upon March 24, 1930, from valvular disease of the heart, and the court found that she was suffering from this disease on the date of the application for, and on the dates of the issuance and delivery of the policy. It was further found, however, that the assured "never was informed of this trouble, and that she did not, the time of her application for insurance nor on the date of the delivery of the policy, know she had heart trouble." After the death of the assured, the defendant declared the policy void and duly tendered a return of the premiums paid, which tender was refused.
The court finally concluded that the responsibility for any incorrectness in the answers contained in the application "must rest wholly upon defendant's agent, so that under the rule of estoppel, as applied by our Court in such cases, the defendant cannot now prevail in the defense set up to this action."
Other facts appear in the opinion.
McLane, Davis Carleton (Mr. Carleton orally), for the plaintiff.
Wyman, Starr, Booth Wadleigh (Mr. Ralph E. Langdell orally), for the defendant.
Decedent's application for insurance which, by incorporation in the policy and by virtue of the statute (P. L., c. 277, s. 8) became a part of her contract with the defendant, contained a stipulation "that the policy shall not be binding upon the Company unless upon its date I shall be alive and in sound health." The policy also contained the following provision: "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 had any . . . disease of the heart . . ., 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 the premiums paid on the Policy . . ." The argument of the plaintiff that the deceased had no actual knowledge of these provisions and hence that she was not bound by them is without merit. The only contract which she had with the defendant was the one embodied in the policy, and her failure to read it or otherwise learn of its provisions furnishes no legal ground for nullifying its conditions. Lauze v. Insurance Co., 74 N.H. 334.
The meaning of the above quoted provisions is unmistakable and there is no escape from the conclusion that the requirement that the assured be in sound health on the date of the policy was an express condition precedent to any liability on the part of the defendant. The finding of the court that upon the date of the policy the deceased was afflicted with valvular disease of the heart is equivalent to a finding that this condition was not fulfilled, and in the absence of countervailing considerations, it would follow that the policy, in the language of the application, is not "binding upon the company." Packard v. Insurance Co., 72 N.H. 1.
The trial court, however, was of the opinion that there were countervailing considerations of controling force. By his reference to "the rule of estoppel, as applied by our Court in such cases" he indicated his belief that the case at bar is governed by the principle announced in Domocaris v. Insurance Co., 81 N.H. 177, and affirmed in Bilodeau v. Insurance Co., 84 N.H. 405. The plaintiff takes the same position in this court. Briefly stated, the contention is that the defendant is estopped by the conduct of its agent from asserting in its defence a breach of the condition above set forth. It is argued that the defendant's agent, if not fraudulent, was negligent and that the company "is equally estopped whether the conduct of its agent be fraudulent or negligent."
The trial court made the following finding: ". . . it cannot here be said defendant's agent had knowledge of assured's condition at the time the application was taken . . . and thus perpetrated a fraud on the company in reporting her condition incorrectly." The vital facts which were common to both of the cases above referred to are, therefore, absent here, and hence the present case does not come within the scope of those decisions. As clearly intimated in the Bilodeau case (p. 406) the rule there followed involves a departure from common-law doctrines of agency, and its utility as an instrument for the accomplishment of substantial justice is extremely dubious. Consequently if the plaintiff's argument were otherwise sound, we should hesitate to extend that rule so as to cover any new situation.
The facts reported by the trial court, however, furnish a complete answer to the plaintiff's argument, namely, that the agent's failure to learn of the assured's condition was not findably due to his negligence. The court has found that when the application for insurance was made, the deceased had no knowledge of her true condition. It follows that no amount of questioning by the agent could have elicited the facts from her, and hence it could not be found that his failure to ask specifically every question in the application blank, if negligent, was the cause of his failure to discover the truth about her impaired health. We, therefore, conclude that the condition precedent to liability under the policy was not fulfilled and that the defendant is entitled to rely upon this defence. It is accordingly ordered that there be
Judgment for the defendant.