ERROR to the Circuit Court for the Eastern District of Missouri. Jeffries, administrator of Kennedy, sued the Economical Life Insurance Company, of Providence, Rhode Island, in the court below, alleging that on the 19th of October, 1870, the said company issued a policy of insurance upon the life of the deceased for $5000; that Kennedy died in August, 1871, and that notice had been given to the company of his death, payment of the amount of insurance demanded and refused. The policy, which the declaration set out at length, contained the clauses following, viz.: 'This policy is issued by the company, and accepted by the insured and the holder thereof, on the following express conditions and agreements, which are part of this contract of insurance: '1st. That the statements and declarations made in the application for this policy, and on the faith of which it is issued, are in all respects true, and without the suppression of any fact relating to the health or circumstances of the insured, affecting the interests of said company. '6th. That in case of the violation of the foregoing conditions, or any of them, . . . this policy shall become null and void.' The plea averred–– 'That the policy was issued and accepted, on the following express conditions and agreements contained in it and made part of the contract of insurance, to wit, that the statements and declaration made in the application for the policy, and on the faith of which it was issued, were in all respects true, and without the suppression of any fact relating to the health or circumstances of the assured affecting the interests of the defendants, and upon the further condition, that in case of the violation of the aforesaid condition, among others the policy should become null and void. 'That the said Kennedy did violate the first condition in this, that the statements and declarations made by him in his application for the said policy, were not in all respects true, but were false in the following respects, to wit: '1st. That in the application for the policy, and on the faith of which the same was issued, in answer to the question therein asked of him as to whether he was married or single, he stated that he was single, whereas, in fact, he was married, having a wife then living, as he well knew. '2d. That in the application for the policy, and on the faith of which it was issued, in reply to the question therein asked of him, 'Has any application been made to any other company; if so, when?' he answered 'No;' whereas, in fact, he had, prior thereto, to wit, in April, 1870, applied for insurance upon his life, to the Mutual Life Insurance Company of New York, and had been insured therein in the sum of $10,000, as at the time of making the said answer, he well knew.' To this plea the plaintiff demurred, but the court overruled the demurrer, and entered judgment for the company. From the judgment so entered, the present writ of error was brought. The demurrer admitting that the statements made in the application were false, the question in the case, of course, was this: 'Was the plea bad because it did not aver also, that the false statements were material to the risk?'
The opinion of the court was delivered by: Mr. Justice Hunt delivered the opinion of the court.
Messrs. T. W. B. Crews and J. S. Laurie, for the administrator, plaintiff in error:
1. The statements contained in the decedent's application were not warranties. They are not pleaded as warranties. The plea does not allege that the statements were in writing, and if they were not, but were oral only, then, as no particular form of words is essential to make a warranty, but the question is one of intent, it should have been left to a jury to say whether there was a warranty.
The use by a pleader, of the terms 'express conditions and agreements,' does not of itself import a condition precedent or a warranty.*fn1
If a warranty is relied on, it should be averred. The distinction between a warranty and a representation, is one well known, and, in insurance, vital. A misrepresentation will not vitiate a policy unless material to the risk. The materiality must be averred. It is a fact for the jury.*fn2
2. Independently of any question of defective pleadings, the plea shows on its face that no misstatement in the application could have been meant to vitiate the policy, unless the same 'affected the interest of the said company;' affected the interests of the company injuriously, of course, thereby meaning. The plea while iterating the language of the contract, yet seeks to defeat a recovery, on the ground of the misstatements, without venturing to allege that they did affect the interests of the company in any way.
Now, it appears that of the two misstatements made in this case, neither affected the interests of the company injuriously; and, indeed, that if they affected those interests at all, they affected them beneficially.
In the first one, the company being told that the applicant was an unmarried man, asked of course, and got a higher premium than if they had been told that he was married; it being matter of notoriety, that a married man is regarded, in the parlance of insurers, as a 'better life,' than an unmarried one.
So, too, being told that no application had been made elsewhere, they necessarily made a more searching examination into the character of the applicant's health than they would otherwise have made. By his untrue answer the applicant invited medical inquiry. The question put to him on his application, was not as to what other company he had applied to; or for what amount or for what rate, but was simply, 'Has any application been made to any other company? If so, when?' Had he answered truly, he would have said 'Application has been made to another company. It was made about six months ago.'
The company to which he was now applying would have inquired and would have learned that he had been taken recently, and taken for a large amount, $10,000. This would have tended to show that he was a fit subject for a risk. Such prior insurance by another company would have been regarded as complimentary to the applicant; or in mercantile phrase, as an 'indorsement' of his life.
The case then, as to both misstatements, falls within the rule laid down by Mr. Parsons:*fn3
'Nor is a policy avoided by such a misstatement of a fact, which, if truly stated, would diminish the risk; for then if the insurers are deceived, it is to their own advantage.'
At all events, the second misstatement did no harm. Life insurance companies do not like over-insurances, from their tendency to produce suicide. But there is no allegation or pretence here either of suicide or of an insurance in contemplation of it.
The art with which insurers now word and hedge about contracts of insurance in favor of themselves–their adroit modes of getting answers, and their numerous 'conditions' hidden in long columns of finely printed matter–has been the subject of just reproof from this court;*fn4
and the results of their contrived questions are so frequently and so grossly unjust, that the legislatures of several States, including Maine, New Hampshire, Ohio, and Missouri, have interfered, and provided by direct enactment that misrepresentations not relating to the risk, shall not vitiate a policy, and that in all ...