Heralds of Liberty v. Collins

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The suit is on a certificate of a fraternal benefit association.

The distinction between misrepresentations and warranties in insurance contracts has been defined and need not be repeated. For discussions of phases thereof, under the former statutes, see Alabama Gold Life Ins. Co. v. Johnston, 80 Ala. 467,2 So. 125, 59 Am. Rep. 816; Mutual Life Ins. Co. v. Allen, 174 Ala. 511,56 So. 568; Metropolitan Life Ins. Co. v. Goodman,196 Ala. 304, 71 So. 409; Massachusetts Mutual Life Ins. Co. v. Crenshaw, 195 Ala. 263, 70 So. 768; Empire Life Ins. Co. v. Gee, 171 Ala. 435, 55 So. 166. And the statute, as amended, putting fraternal benefit associations, in matters of misrepresentations and warranties, on the same footing as old life insurance, was considered in Brotherhood of Railway S.C., etc., v. Riggins, 214 Ala. 79, 107 So. 44 (preserving the declared distinction between warranties and a mere representation, and declaring the old and new statute of like effect to both classes of insurance); Sovereign Camp v. Hutchinson, 214 Ala. 540, 108 So. 520 (when the misrepresentations were in the form of warranties); Code of 1923, §§ 8049, 8364, 8507.

Applying the tests of the rule to the pleas, they are insufficient in averments as setting up mere misrepresentations in applications for insurance. Plea 2 uses the word "warranted" without averring that the general ailment stated increased the risk of loss to the insurer. This is aside from the fact that the policy declared upon and in evidence contained the provision:

"All statements made by the member shall, in the absence of fraud, be deemed representations and not warranties, and no such statement shall avoid this certificate or be used in defense of a claim hereunder, unless it is contained in the written application for membership and the medical examination, both of which constitute a part of this contract."

Had there been error in the ruling on the demurrer to plea 2, it could not have been reversible error under the express declarations of the policy, and therefore that ruling would have been without injury. Indemnity Ins. Co. of North America v. Gardner, 214 Ala. 528, 529, 108 So. 342.

Pleas 3, 4, 5, 6, 7, and 8 were based on misrepresentations merely (not warranties) and failed to aver that the misrepresentations pleaded were not only false and material, but that they were relied upon as true by the defendant. Sovereign Camp v. Hutchinson, 214 Ala. 540, 543, 108 So. 520. This was a defect in pleas 3, 4, 5, and 6 that justified the ruling of the trial court.

Pleas 7 and 8 averred of a misrepresentation of material facts, and defendant's reliance thereupon, that "assured had notice" of the falsity of the statement when made, and that the matter was material to and increased the risk. If it be said the words "had notice" were the equivalent of the averment of fact showing an actual intent to deceive with a knowledge of the falsity of the fact, and that defendant relied thereupon, there was no reversible error committed. The same matter sought to be pleaded in Nos. 6, 7, and 8 was set up in pleas 9, 10, and 11, and the conclusion thereof is the averment that said false statements were made by the assured with the intent to deceive the defendant, and that it relied thereupon in issuing the policy.

The questions to the witnesses Rivers and Gordon called for conclusions on a matter directly in issue. Amer. Nat. Ins. Co. v. Rosebrough, 207 Ala. 538, 93 So. 502; Weller Co. v. Camp,169 Ala. 275, 52 So. 929, 28 L.R.A. (N.S.) 1106.

There was no error in sustaining objection to the question to Dr. Blue:

"Isn't it a fact or isn't it a condition material to a life insurance risk?"

The question is not complete. However, the witness did testify that most life insurance companies considered a disease of the heart a poor risk. The further question calling for Garner's conversation to Blue, in the absence of the assured, was properly excluded. However, the same matter was in evidence, and the evidence of Meader, sought as to the same matter, was properly excluded. It was not competent as tending to impeach Blue, since that witness was introduced by the defendant. Ala. Power Co. v. Hall, 212 Ala. 638, 642,103 So. 867.

The questions of fact of whether the deceased had a heart trouble when the insurance issued, if so, whether it was intrinsically material and increased the risk, and whether the alleged false statements were made with the intent to deceive, and that the defendant was so deceived to its prejudice were for the jury. All affirmative instructions sought were properly refused. This is illustrated by refused charges 16 and 17, requested by the defendant.

It could not be said under the evidence as a matter of law, that heart trouble is material to the risk. The same defect infected refused charges 2, 5, 6, 9, 10, 12, 13, and 18. They sought to instruct that it was immaterial whether the heart trouble increased the risk of loss, or whether the mere representations were made with intent and did deceive the defendant. Requested charges 8, 11, 14, 15 and 19 were properly refused.

The distinction between pleas of fraud in the procurement of a policy of insurance and a breach of warranty is indicated in Empire Life Ins. Co. v. Gee, 171 Ala. 435, 441, 55 So. 166, and Brotherhood v. Riggins, 214 Ala. 79, 107 So. 44.

Where fraudulent representations are pleaded in defense to recovery on a policy of insurance, it must be shown (1) that the statements were false when made and were with intent to deceive, (2) that they related to matters intrinsically material to and affected the risk, and (3) that the insurer relied on them. Empire Life Ins. Co. v. Gee, 171 Ala. 435, 439,55 So. 166.

We will say of refused charges 3, 7, and 20, whether good or bad, they were each covered by given charge 4 and the oral charge.

We find no reversible error, and the judgment of the circuit court is affirmed.

Affirmed.

ANDERSON, C. J., and SOMERVILLE and BOULDIN, JJ., concur.