Royal Neighbors of America v. Boman , 177 Ill. 27 ( 1898 )

Mr. Justice Wilkin

deliveredthe opinion of the court:

The questions presented for decision in this cause arise upon the construction and effect to be given, under the circumstances of this case, to the foregoing clauses contained in the application and certificate. It is contended on behalf of appellant, that by the terms of the application appellee is estopped from asserting that Dr. Meacham was the agent of the order, and not of the applicant for the certificate. Evidence was admitted on the bearing, over the objection of appellant, to establish the real position of the medical examiner in relation to applications for benefit certificates. The question as to whose agent Dr. Meacham was is one of fact, to be determined from all the evidence bearing on that subject, and not merely from the statement in the application that he was the agent of the assured. The question is open to inquiry and may be shown by parol, notwithstanding the express stipulation that he was to be regarded as the agent of appellant. (Lumbermen's Ins. Co. v. Bell, 166 Ill. 400; Firemen’s Ins. Co. v. Horton, 170 id. 258; Phenix Ins. Co. v. Stocks, 149 id. 319.) The Superior Court of Tennessee, in a case very similar to this, held that one who acts as a medical examiner for an insurance company, which ratifies his examination of an applicant, is its agent in respect to such examination, notwithstanding a recital in the application that he shall be regarded as the agent of the applicant as to all statements made by the latter. (Endowment Bank Knights of Pythias v. Cogbill, 41 S.W. Rep. 343.) While such stipulations are now usually inserted either in the application or in the policy, yet they cannot change the facts, and where a duly appointed agent of the company acts in its behalf, within the scope of his authority as otherwise determined, his acts are binding upon the company. (See 11 Am. & Eng. Ency. of Law, 834, and cases there cited.) We perceive no sound ground, on the testimony, to reverse the finding of the chancellor that Dr. Meacham, at the time he received Mrs. Roman’s application, was the agent of appellant.

Appellant contends that it was the duty of the applicant to read the application and to know what she signed, and failing to do so the beneficiary is estopped from questioning the truth of the answers therein contained, and the case of New York Life Ins. Co. v. Fletcher, 117 U. S. 519, is cited in support of this view. The case cited, and all cases which follow its doctrine, proceed upon the ground that the assured cannot escape the duty of reading the application, which must be the basis upon which his insurance will rest; but the majority of the various State courts, for good reasons, as we think, seem not to have adopted the views therein expressed. Whether the beneficiary should be estopped from questioning the truth of the answers contained in the application also depends upon the peculiar facts of each case and the relation of the parties. As is well said on this subject in a note to Wheaton v. North British Ins. Co. 9 Am. St. Rep. 233: “The ground thus taken, though defensible when viewed in connection with ordinary contracts and writings, is more questionable when used to support the claim that the assured, rather than the insurer, shall suffer from the fraud of the latter’s agents. It is notorious that contracts of insurance are, on the part of the assured, entered into without the advice of counsel, and chiefly upon the representations of the agents of the insurer. Such agent is justly looked upon as.the accredited agent of the company, in whom it has confidence and holds out as worthy of the confidence of its patrons. Furthermore, the assumption is perfectly natural that he knows just what information his principal desires and in what language it may be best expressed, and human nature must be far different from what it is now before the average applicant for insurance can be taught that he must be deaf to the representations of the agent while he sharpens his comprehension and applies it to the careful scrutiny of the insurance stationery, which, even without the suggestion of the agent, it is impossible for him to regard as other than a mere ‘matter of form. ’ ” So in this case, when, in answer to the question as to whether or not she had ever had bronchitis, Mrs. Roman told him she had had an attack of “acute bronchitis,” and Dr. Meacham said “it was of no consequence” and inserted “no” in answer to the question, she had a right to rely on his statement, on the theory that he knew just what information his principal desired and how it should be expressed. He was acting" in the interests of the order, and his knowledge must be held to be the knowledge of the principal. It was his duty to ascertain the actual facts about this risk, and his report to the company must, where no fraud or intent to deceive on the part of the applicant is shown, be conclusive upon it. Where one makes true answers to the questions in an application for insurance, the validity of the insurance is not affected by the falsity of the answers inserted by the agent of the company, even though the application contained a stipulation that the agent took the application as the agent of the insured. Bernard v. United Life Ins. Co. 39 N. Y. Supp. 356; Clubb v. Am. Acc. Co. of Louisville, 97 Ga. 502; Insurance Co. v. Wilkinson, 13 Wall. 222; Andes Ins. Co. v. Fish, 71 Ill. 620.

Under the circumstances of this case the beneficiary is not estopped to question the truth of the statements made in the application, and the finding of the chancellor in that respect was correct.

We are satisfied the decree of the circuit court finding in favor of appellee, and its affirmance in the Appellate Court, are right.

Decree affirmed.