Eichwedel v. Met. Life Ins. Co.

^* Headnote 1. Appeal and Error, 3 C.J., section 843; 2. Appeal and Error, 3 C.J., section 881; 3. Insurance, 32 C.J., section 7; 4. Life Insurance, 37 C.J., section 285 (1926 Anno). This is a suit on an insurance policy issued by the defendant, who is represented here, on the life of Mathilda Spearow, on the twenty-eighth day of January, 1913, in Chicago, Illinois, in the sum of $500. Plaintiff, a sister of the insured, was named as beneficiary. Mathilda Spearow died on the twenty-eighth day of May, 1913, and on July 24, 1913, defendant paid plaintiff the sum of $7.44, at which time plaintiff signed a release which provided that in consideration of the above sum plaintiff released and forever discharged the defendant from all claims and demands arising under and by reason of the policy in question.

Plaintiff's petition, after the usual allegations, alleged that the policy is an Illinois contract, and provides that said policy shall be incontestable (except for non-payment of premiums) after two years from its date; and pleaded certain decisions of the State of Illinois as holding that under the laws of such State the defendant is liable for the payment of the full amount of said policy less the $7.44.

The answer, after a general denial, sets up the affirmative defense that the insured, at the time of her application, represented that she never had the disease of cancer or tumor, and had had no physician attending her for cancer, and had been under treatment in no dispensary or hospital, and that such statements were false and untrue; that the insured had been suffering from the disease of cancer from the date of the application and prior thereto, and had been in certain hospitals under the care and treatment of physicians, and died from the disease of cancer; that defendant, after the death of insured, discovered these facts and compromised all claims and demands of plaintiff for the sum of $7.44, at which time plaintiff executed the release above referred to; and further pleaded certain statutes and decisions of the State of Illinois.

Plaintiff's reply pleaded that defendant was estopped from asserting its defense by virtue of the laws and decisions of Illinois, and certain other matters which it is unnecessary to set out in the opinion.

At the time of the trial plaintiff's counsel tendered into court the amount that plaintiff had been paid by the defendant.

Plaintiff's son, a resident of the city of Chicago, Illinois, where his mother lived, testified that his aunt died on the twenty-ninth day of May, 1913. The policy in question was offered in evidence, and plaintiff rested. The court refused to give a peremptory instruction for defendant. When defendant offered its evidence, plaintiff's counsel objected to defendant offering in evidence the proofs of death, on the ground that, under the incontestability clause in the policy, defenses named in the answer, and all other defenses except the non-payment of premiums, which is not set up in the answer, should not be made or shown by defendant; and for the further reason that it is not claimed that the answers to certain questions were altogether false. Plaintiff's counsel also objected to the introduction of any evidence in the case on account of the incontestability stipulations in the policy.

The court overruled all these objections, and plaintiff's counsel duly saved his exceptions.

The defendant then offered evidence to show that deceased had been in two different hospitals in New York prior to the time she made application for this policy; and there was also evidence, as shown by depositions read in evidence by defendant's counsel, that she was operated on while in one of these hospitals, certain witnesses stating that they had visited the insured while she was in the hospital prior to the date of the application for insurance, and one doctor testifying that he had operated on plaintiff; and there was evidence to show that for some time prior to the date of the policy she had suffered from cancer. In rebuttal, plaintiff's son testified that up to about nine days before insured's death she stayed at his mother's home, and worked at her business of dress-making. Other evidence will be refered to later in the opinion.

Certain instructions were given for the defendant, and all instructions requested by the plaintiff were refused. At the time the court gave and refused the instructions above referred to, plaintiff's counsel did not except to the action of the court in giving defendant's instructions, and in refusing those offered by plaintiff, but after filing a motion for new trial, and during the same term of court, plaintiff's counsel filed written exceptions to the action of the court in refusing to give instructions requested by plaintiff, and to the instructions given at the request of defendant. Respondent filed a motion to strike these exceptions from the files, and in support of this motion to strike out offered in evidence the rules of the circuit court in which the case was tried. The particular rule offered in evidence, and shown to be in force at the time the trial was had, is as follows:

"Exceptions to adverse rulings during the trial, including the giving and refusing of instructions, will be considered as waived (and not saved as of course) unless expressly saved to each ruling at the time, and no stipulations to the contrary will be recognized or held valid by the court."

The court thereafter overruled plaintiff's motion for new trial, and moved to strike from the files plaintiff's written exceptions. By stipulation of counsel, the bill of exceptions as contained in the appellant's abstract is to be considered as the bill of exceptions in this case.

Defendant's first contention on this appeal may as well be met first, that is, that plaintiff saved no exceptions, at the time, to the action of the court in giving and refusing certain instructions, and therefore there is nothing before this court but the record proper. Plaintiff's counsel answers this contention in his reply brief by the suggestion that under the law of this State an exception to the action of the court on instructions may be taken and saved any time before the abstract of the record is due in the reviewing court. Defendant, in support of its suggestion, cites and relies upon the case of Tyon v. Wabash R. Co., 207 Mo. App. 322,232 S.W. 786, in which this court held that exceptions to rulings of the court must be saved at the time such rulings are made, and that such requirement cannot be satisfied or obviated by any rule or custom of the trial court to the contrary. However, in a later case our Supreme Court, in State v. Miller, 241 S.W. 920, held that a rule of court to the effect that all exceptions to adverse rulings would be considered saved as a matter of course, and such exceptions noted by the court reporter and inserted in the bill of exceptions, was within the right and power of the court to make, and would be upheld and followed as not in conflict but within the contemplation of the terms of the statute (Section 1459, R.S. 1919). But it must be borne in mind in the Miller case, supra, that the court was dealing with the question of whether or not such rule would be upheld as being within the terms and provisions of the statute. And such rule was upheld, because it was held that the rule did not violate the meaning and purpose of the statute. If such rule did not violate the meaning and purpose of the statute, then the rule of the circuit court above referred to and in force at the time of the trial of this case should also be upheld because it is not only a rule that in no way violates the terms of the statute, but is in more strict conformity therewith than the one dealt with in the Miller case. Therefore, we must rule that under the state of this record plaintiff's counsel did not properly save exceptions to the action of the trial court in giving defendant's instructions and in refusing to give those requested by him. But we do not agree with the contention of defendant's counsel that, even though this be true, there is nothing before us but the record proper, because plaintiff's counsel made long and vigorous objections to the introduction of the testimony offered by defendant, on the ground that such would be no defense, and would be inadmissible as a defense to plaintiff's cause of action. The objection to the admission of this testimony was properly preserved in plaintiff's motion for new trial, and is before us for review.

This brings us to the main question involved in this case under the present state of the record, and that question is: When the beneficiary (who is the plaintiff here) had been notified by defendant's representative that it would not be liable for the payment of the premium in view of the misrepresentations made by the insured as to her health, and plaintiff, in consideration of the repayment to her of the premium, signed and executed a release purporting to release the defendant from all liability and demands arising under the policy in question, was this a sufficient compliance with the incontestability clause in the policy so as to permit such defendant to interpose the defense which it undertook and did impose in this case? This being an Illinois contract, we are, of course, governed by the laws of the State of Illinois in its interpretation. There are cases in that State, and the law of Illinois unquestionably is, that a mere denial of liability by the insurer, accompanied by a tender of the premium, is not a sufficient contest within the meaning of the provisions of the policy in question, but there must be some affirmative action to cancel the policy, or a defense to a suit thereon. [Monahan v. Metropolitan Life Ins. Co., 283 Ill. 136; Ramsay v. Ins. Co., 297 Ill. 592; Powell v. Mutual Life Ins. Co.,313 Ill. 161, 144 N.E. 825.] This has been the interpretation placed upon the construction of the Illinois laws governing such a provision by the courts of this State, as will be seen by reference to the cases of Lavelle v. Metropolitan Life Ins. Co.,209 Mo. App. 330, 238 S.W. 504; and Mutual Life Ins. Co. v. Wiegmann (Mo.App.), 256 S.W. 505. Yet, in none of these cases was the court called upon to deal with just such a situation as we have here. It has been held in some instances that a mere notification by the insurance company that it intended to rescind a policy, and a tender of the premiums, was a sufficient contest within the meaning of this clause in a policy, as will be noted by reference to the cases of Mutual Life Ins. Co. v. Hurni Packing Co., 280 F. 18; Mutual Life Ins. Co. v. Rose, 294 F. 122; and Feierman v. Eureka Life Ins. Co., 279 Pa. 507. However, we are not particularly concerned with the last-cited cases, because we are governed by the construction placed upon this form of policy by the Illinois courts. These cases, however, are instructive, and especially the case of Mutual Life Ins. Co. v. Rose, supra, in view of the fact that none of the Illinois cases deal with exactly the same situations which we have here.

In Powell v. Mutual Life Ins. Co., supra, the last pronouncement of the Supreme Court of Illinois on this subject after reviewing the authorities, it was held that an "unaccepted" offer for rescission or an attempt to rescind is insufficient, and that the insurer must rescind during the two-year period by some affirmative action before a proper tribunal or by defense to a suit on the policy. In the instant case we have a solemn, written declaration by the beneficiary that she releases the insurer from all liability or claims under the terms of the policy. When such release was executed, what more could the insurer do toward a cancellation of the policy? The written release had been signed by her, and the policy returned to the insurer. Surely the insurer, in order to avail itself of the right to contest within the two-year period, should not be required to do an apparently useless and unnecessary thing by bringing suit to cancel the policy, when the beneficiary therein had signed a written release and returned the policy to the insurer. This is not a case of a notice of intention to rescind and an offer of return of the premiums, but the premium paid was returned, a written release was executed, and the policy actually canceled by the insurer. This, it seems, would certainly constitute "affirmative action" and an accepted offer for rescission so as to entitle the defendant to interpose the defense of fraud and misrepresentations in the procurement of the policy after the two-year period had elapsed and suit had been brought by the beneficiary. We do not undertake to hold that this release was valid and binding on the beneficiary, but we think that under the facts of this case defendant should be permitted to offer the evidence and make its proof to sustain its defense, and that we should not hold, as a matter of law, that such evidence was inadmissible upon the face of the pleadings.

There are other objections made to the admission of certain testimony by plaintiff, but such are without merit, and all the questions of fact involved in the case were submitted to the jury under instructions which, as we have heretofore held, are not before us for consideration.

It follows from what has been said that the judgment should be affirmed. It is so ordered. Daues, P.J., and Becker, J., concur.