Kelly v. Life Insurance Clearing Co. , 113 Ala. 453 ( 1896 )

PIARALSON, J.

The plaintiff’s counsel in his brief, states the issue on the pleadings in the case, as follows : ‘ ‘The theories upon which the causes of demurrer are based, are, 1st, That the policies themselves contain the only conditions, stipulations and warranties upon which they were issued ; and, 2d, That if the said application and health certificate are to be considered parts of the contract of insurance, and as containing some of the conditions upon which the policies were issued, said statements in said application and in said certificates are to be considered as representations and not as warranties, and, being only representations, the matter complained of must have been material to the risk.”

The defendant’s counsel states the issues as to the pleas 1, 2 and 3, and demurrer thereto to the same effect, as follows : “The first question tobe considered is, do the said pleas (1, 2 and 3) show that the said answers were warranted by the insured in said contracts of insurance sued on, to be true? If they do show such warranty, then the demurrers of plaintiff thereto were properly overruled; otherwise, they should have been sustained.”

The parties are thus agreed as to the substance and effect of the demurrers to the pleas, and we may, therefore, consider the questions thus presented, 1st, whether we are to look alone to the face of the policies, as containing the only conditions, stipulations and warranties-upon which they were issued ; 2d, if we go outside the policies themselves, and look at the application for insurance, and health certificate, as it is called, as parts of the contract of insurance, whether the statements therein contained are to be regarded as representations only, — the matter, as alleged, not being material to the risk, — or, they are tobe treated as warranties, the breach of which will avoid the policies.

The policies themselves contain an express warranty in respect to the health of the insured, and his freedom from any disease ; of his age, and the exemption of his parents, brothers and sisters from specified diseases. It is then provided in each, ‘ ‘it is expressly agreed, that if the above declarations and warranty shall be found untrue in any respect, or, if there shall be any breach thereof whatever, then this policy shall be ipso facto null and void, and all payments thereon shall be forfeited to the company.”

If this were all, and the policies were to be construed ■without reference to any other contemporaneous writings, only those statements which are found in the policies themselves, and expressly warranted to be true, could be considered as warranties, — the rule being, that courts will not create or extend a warranty by construction. But, the rule of law is well settled and familiar, that different writings, executed at the same time and relating to the same subject matter, will be construed as one instrument. The intention of the parties controls, and is to be gathered from the writings to which their stipulations and agreements may be referred.-Bridgeport Land & Imp. Co. v. American Fireproof Steel Car Co., 94 Ala. 596; M. & M. R. R. Co. v. Gilmer, 85 Ala. 423, 434; Walker v. Struve, 70 Ala. 167; Robbins v. Webb, 68 Ala. 398; Collins v. Whigham, 58 Ala. 440; Byrne v. Marshall, 44 Ala. 357. A good illustration of the rule as applicable to the case in hand, is that of Roberts v. The Chenango M. Ins. Co., 3 Hill, 501, where a policy of insurance was made by using a form printed on the half of an entire sheet of paper; and on the other half sheet, therg was a printed statement, commencing, ‘ ‘ Conditions of Insurance,” but no express reference was made to this in the body of the policy. The court held, that there was no doubt of the intent that both should be taken together; that the assured accepted the policy, with wliat purported to bo conditions on the same sheet; that there was no need of an express reference by the policy to the conditions, in order to fix the meaning, and that the juxtaposition of the papers was a sufficient prima facie expression, subject to be rebutted by parol evidence, that they were connected by mistake. In the Ala Gold Life Ins. Co. v. Thomas, 74 Ala. 578, 582, the indorsements and the policies on which they were made, were construed together as a whole. It may be said, then, that where reference is made in one paper to another, they are to be construed together • as as a whole, when, legally, the papers constitute one entire transaction, as they most frequently do in a policy of life insurance, the application therefor and indorsements thereon.-Ala. Gold L. Ins. Co. v. Johnson, 80 Ala. 467, 471. They need not be physically attached.

On each of the policies in hand, there was entered on the margin in writing or printing, the words, “This policy shall not take effect, until the first premium thereon shall have been paid to the company, or to some person authorized by the company to receive it, while the insured is in good health, and in accordance with the health certificate and premium receipt accompanying the same.”

Again the insured, in making his application for these policies, signed an agreement as part of his application, as follows : “I hereby warrant and agree, * * * * that the statements and answers to the printed questions above, together with this declaration, [containing other agreements], as well as those made tq the company’s medical examiner, shall constitute the application, and be the basis of this contract.”

Further still, to make^the intention of the parties even more manifest and indubitable, in accepting the policies, the insured signed another paper, or certificate, provided on the face of the policies themselves to be signed, in which he states, in consideration of the issuance and delivery of said policies, respectively, to him, “I hereby certify, declare, and warrant in consideration of the delivery to me of said policy, * * * that the statements herein, [touching his health and habits] are, and that the statements in the original application were, when made, in all respects true, otherwise the insurance will be void.” Italics ours.

In this case it thus appears, the contract of the parties as averred in said pleas, consisted of three writings to which their statements and agreements are necessarily referable, namely, the original application for insurance, made to the Penn Mutual Life Insurance Co. ; the policies of insurance themselves, and the health certificate. From these papers, there can remain no doubt of the intent of the parties, that they should be taken and construed together, as if there were but one paper embodying the provisions and conditions of each. When so construed, we are constrained to hold, that when the insured, in his application for insurance, made the statement that he had never applied to any company or agent for insurance, without receiving a policy of the exact kind and amount applied for and that there were no negotiations for insurance then pending, he warranted his answer to be true, otherwise, as agreed in his certificate on receiving the policies, the insurance was to be void. This agreement was not a simple representation of the fact he averred, to be held of no vitiating effect, if untrue or immaterial; but a warranty as plain as words can create one, and on the truth of which the vitality of the policies were made to depend.

In giving construction and effect to such a contract, in a kindred case, this court has well said : "In construing this contract, all its conditions and terms will be construed liberally, in favor of the assured, and strictly against the insurer. Clear and unequivocal language must bo required in order to create a warranty, and all statements of a doubtful meaning must be construed to be representations rather than warranties. * * * But, while these rules of construction are followed, it is our duty ‘to interpret the contract of the parties, as they have made it, and to enforce it according to obvious intention legally expressed, so long, at least, as it offends no law, or violates no principle of public policy.’-Ala. G. L. Ins. Co. v. Thomas, 74 Ala. 578, 583.”

In the Ala. G. L. Ins. Co. v. Garner, 77 Ala. 215, it was again said: “While warranties are not favored, and will neither be created nor extended by construction, when a warranty is expresssly, and in terms declared, its stipulations and conditions must be strictly complied with. The question is disembarrassed of any consideration of materiality, the parties having made it material by their contract.” Materiality of a statement is not, therefore, as is generally conceded, an element of defense in case the statement is warranted to be true. The agreement of the parties, that a statement is true, and that its falsity, in any respect, should avoid the policy, on principle and authority, removes the question of materiality from the consideration of the court and jury. Ætna Life Ins. Co. v. France, 91 U. S. 510; Jeffries v. Life Ins. Co., 22 Wall. (U. S.) 47. The demurrers to said pleas, it must be held, were properly overruled, for the pleas aver, that in said health certificate, “it was warranted by the insured that the statements in said original application were, when made,in all respects true, and that otherwise the insurance should be void.” The warranty is admitted by the demurrers. Matters alleged and warranted to be true, if false, though, stated by mistake, through ignorance, carelessness or inadvertence, constitute a defense to an action on a policy of life insurance.

There is nothing in the case of the Ala. Gold Life Ins. Co. v. Johnson, 80 Ala. 471, as is supposed, in conflict with these decisions. In that case, it is stated expressly, that there is nothing therein decided, which conflicts with the cases above referred to. The court properly said : 1 ‘The strong inclination of the courts is to make these statements or answers, binding only so far as they are material to the risk, when this can be done without violence to the clear intention of the parties expressed in unequivocal and unqualified language to the contrary.”

From the foregoing it plainly appears that the rulings of the court, sustaining demurrers to replications 1, 8 and 8 and to pleas 1, 2 and 3, were properly made. The matters set up in said replications were no answer to said pleas.

Replications 9 and 10 are general, and no more than a joinder in issue on the allegations of the pleas, that the statement in the pleas to which the replications refer, was a warranty. The replications merely deny that the statement referred to in each plea was a warranty, and sets up that it was a mere representation. The same is true of replication 11. The 9th was not demurred to, but the 10th and 11th were, and the demurrers overruled. The demurrers to the last two, were probably overruled, as to pleas 1, 2 and 8, for the same reason, that said replications denied, as was done in replication 9, that the statement as to the previous application for insurance was a representation merely and not a warranty. Being a matter of legal construction of the papers themselves, and what they contained, demurrers might well have been sustained to each of said replications, for as we have seen, they contain, really no answer to the said pleas. In no event could replication 11 be held to be an answer to plea No. 1, which contains nothing abóut a rejection of insured by said New York Life Insurance Co. The replication admits the allegations of said plea 1, and simply denies that the allegations in respect to the previous applications in said insurance company was a warranty, and sets up that it was a representation .

The allegations of each of said pleas, by the policies and the papers contemporaneously executed as a part of them, and by the evidence introduced, without any conflict, are sustained, and there was no error, therefore, in giving, as was requested, the general charge in favor of defendant.

It is unnecessary to consider the other questions raised by other pleading in the cause, discussed by counsel, the rulings on' which are assigned as error ; since their decision, the one way or the other, could not affect the result.

Affirmed.