Houston v. Met. Life Ins. Co.

The foregoing opinion of SUTTON, C., is adopted as the opinion of the court. The judgment of the circuit court is accordingly reversed and the cause remanded conditionally as recommended by the Commissioner. Hostetter, P.J., and Becker and McCullen, JJ., concur.

ON MOTION FOR REHEARING. Defendant insists that our original opinion is in conflict with State ex rel. Metropolitan Life Insurance Company v. Allen (Mo.),276 S.W. 877. That case is very different on its facts from the case at bar. It was clearly ruled on the theory that the misrepresentations complained of were fraudulently made. The court said "This case, phrase the facts as you may, bristles with fraud." It is obvious that the court does not hold that a representation innocently made amounts to a warranty that the representation is true as a necessary condition to procuring the policy. The court could not have so held in the face of the policy which expressly provides, as does the policy here under review, that "all statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties."

It is true, as urged by defendant, that the application in this case contains a clause to the effect that the statements in the application shall form the basis of the contract of insurance, but notwithstanding this clause the statements, under the express provision of the policy, in the absence of fraud, must be deemed representations and not warranties. So, they must be treated as representations and must be disposed of under the law applicable to representations. So treating them they are ineffectual to avoid the policy unless fraudulently made. It is important to observe that the language of the policy is not merely that the statements shall not be deemed warranties, but the language goes further and affirmatively declares that the statements shall be deemed representations. By what rule of construction then may this court convert such statements into warranties or conditions avoiding the policy?

We have said that the Allen case does not hold that an innocent misrepresentation avoids the policy, but if it does so hold, it is out of accord with the more recent decision of the Supreme Court en banc in Grand Lodge v. Massachusetts Bonding and Insurance Company, cited and quoted in our original opinion.

The Commissioner recommends that defendant's motion for rehearing be overruled.