Union Mutual Insurance Company v. Wilkinson
In error to the Circuit Court for the District of Iowa; the case being thus:
The Union Mutual Insurance Company, of Maine, insured the life of Mrs. Malinda Wilkinson in favor of her husband. Both husband and wife, prior to the rebellion, had been slaves, and the husband came to Keokuk, Iowa, from Missouri. The company did business in Keokuk (where the application was made and the policy delivered), through an agent, one Ball, to whom it furnished blank applications. The mode of doing business appeared to have been that the agent propounded certain printed questions, such as are usual on applications for insurance on lives, contained in a form of application, and took down the answers; and when the application was signed by the applicant, the friend and physician forwarded it to the company, and if accepted, the policy was returned to this agent, who delivered it and collected and transmitted the premiums.
On this form of application were the usual questions to be answered by the person proposing to effect the assurance; and by the terms of the policy it became void if any of the representations made proved to be untrue.
Among the questions was this one:
'Has the party ever had any serious illness, local disease, or personal injury; if so, of what nature, and at what age?'
And the question was answered:
So, too, after an interrogatory as to whether the parents were alive or dead,-they being, in the case of Mrs. Wilkinson, both dead,-were the questions and answers:
'Question. Mother's age, at her death?
'Question. Cause of her death?
Mrs. Wilkinson having died, and the company refusing to pay the sum insured, Wilkinson, the husband, brought suit in the court below to recover it. The defence was that the answers as above given to the questions put were false; that in regard to the first one, Mrs. Wilkinson, in the year 1862, had received a serious personal injury, and that in regard to the others, the mother had not died at the age of 40, but at the earlier age of 23, and had died not of fever but of consumption.
As to the first matter, that of the personal injury, the fudge (under a rule of practice in the State courts of Iowa, adopted by the Circuit Court of that district, and which allows the jury in addition to its general verdict to find also special verdicts and answers to interrogatories put), required the jury to respond to certain interrogatories. These and the answers to them were thus:
'Interrogatory. Did Malinda Wilkinson, in the year 1862, receive a serious personal injury, by falling from a tree?
'Answer. Yes, injured; not seriously.
'Interrogatory. Were the effects of such fall temporary, and had these effects wholly passed away without influencing or affecting her subsequent health or length of life prior to the time when the application for insurance in this case was taken?
As to the other matter, the age at which the mother died and the disease which caused her death, evidence having been given by the defendant tending to show that she died at a much younger age than forty years, and of consumption, the plaintiff, in avoidance of this, was permitted (under the plaintiff's objection and exception) to prove that the agent of the insurance company, who took down the answers of the applicant and his wife to all the interrogatories, was told by both of them that they knew nothing about the cause of the mother's death, or of her age at the time; that the wife was too young to know or remember anything about it, and that the husband had never known her; and to prove that, there was present at the time the agent was taking the application, an old woman, who said that she had knowledge on that subject, and that the agent questioned her for himself, and from what she told him he filled in the answer which was now alleged to be untrue, without its truth being affirmed or assented to by the plaintiff or the wife.
This the jury found in their special verdict, as they had the other facts, and found that the mother died at the age of 23; did not die of consumption; and that the applicant did not know when the application was signed how the answer to the question about the mother's age and the cause of her death had been filled in.
In charging the jury, the court said, on the first branch of the case-that relating to the personal injury-that if the effects of the fall were temporary, and had entirely passed away before the application was taken, and if it did not affect Mrs. Wilkinson's health or shorten her life, then the non-disclosure of the fall was no defence to the action; but, on the other hand, that if the effects of the fall were not temporary, and remained when the application was taken, or if the fall affected the general health, or was so serious that it might affect the health or shorten life, then the non-disclosure would defeat recovery, although the failure to mention the fall was not intentional or fraudulent.
On the second branch-that relating to the age of the mother the court said to the jury, that if the applicant did not know at what age her mother died, and did not state it, and declined to state it, and that her age was inserted by the agent upon statements made to him by others in answer to inquiries he made of them, and upon the strength of his own judgment, based upon data thus obtained, it was no defence to the action to show that the agent was mistaken, and that the mother died at the age of 23 years.
Verdict and judgment having gone for the plaintiff, the insurance company brought the case here on error.
Messrs. G. G. Wright, Gilmore, and Anderson, for the plaintiff in error:
I. In the instruction in the first branch of the case (where the subject of the injury arose), the court told the jury that they were to be the judges as to the seriousness or extent of any unreported personal injury; to consider how far it affected the health or life; that they were to weigh its effect as increasing or not increasing the responsibility of the insurance; that temporary injuries were to be disregarded, and only those considered which were permanent or which might affect the life or health of the assured in after years. Now what is the case? Here is an association which has made life insurance its special business through a long term of time; which carefully and accurately systematizes the principles which shall enable it to estimate longevity; which from a comparison of a multitude of examples, has learned to estimate in figures, the probable hereditary transmission of certain diseases; the effect of different occupations upon the life and health; the probable result of the various forms of accidental injury, as creating predisposition to disease; whose experience has taught it how to place an average pecuniary value on each different form of injury, on its extent, its duration, and the time when it happened. This association proposes to issue life policies, and says to each applicant, 'Give us accurate answers to all the questions which we propound. Before we can accept or reject your application or fix your rate of insurance, you must inform us truly as to the facts of which we inquire; your personal and family history are as material as your age.' The applicant anwers untruly, it may be from carelessness, or it may be wilfully. The consequences are the same. The policy is issued to a person in name, who differs from the person described in the application, just so far as the facts are conceded or perverted.
Now with such a case the jury are instructed that they may pass upon the materiality of the answers. What is this but an instruction that they may make a new contract for the parties, and then enforce it by their verdict.
All the statements in the application are express warranties; and nothing is so well settled in the law of insurance as that if there is a warranty, it is a part of the contract that the matter is such as it is represented to be. The materiality or immateriality signifies nothing. The decisions to this effect are fully set forth in the seventh edition of Smith's Leading Cases, vol. 1, p. 783; note to Carter v. Boehm.
The simple question to be determined, was whether Mrs. Wilkinson, in 1862, by falling from a tree, met with a personal injury which was 'serious' at the time when it occurred; not whether it was material as affecting the hazard of the insurance; and not whether its effects were temporary and passed away without permanent injury. These were questions which the company was entitled to determine for itself, either on the statement of the fact alone, or by seeking further information. It was entitled to know the truth, and the application did not state it.
II. On the remaining part of the case the question to be discussed is, had the court and jury, under any pretence whatever, any right to take into evidence the parol statements made by the applicant, or others, which were contemporaneous with the signing of the application. The plaintiff sues on that contract as it stands. It had not been reformed in equity; but stood, on the day of trial, just as the respective parties had signed it. We have, then, this anomalous position in a court of law: the plaintiff sues on a written contract, signed by himself as one of the parties; he asks a recovery according to the terms of that contract, and yet, in the same breath, is permitted by the court to contradict and vary the terms of this written contract, by proving what was stated by himself and others at and before the signing of the same. This is contrary to all precedent.
In Smith v. Empire Insurance Company,  the action was on a policy of insurance. The original application was brought by the plaintiff to one V. C., the company's agent, in an incomplete state, with the understanding that the agent was 'to fill in the rest of it when he got where he could write.' Pursuant thereto, the agent afterward inserted what he thought proper to make the application complete, including a statement that 'there was no incumbrance except the Petrie mortgage,' which was not true in fact. The application was made a part of the policy. It was held that the plaintiff constituted V. C. his agent to complete the application, and was responsible for what he in good faith inserted, and that the policy was avoided by such false statement.
In Brown v. The Cattaraugus Mutual Insurance Company,  one Ide was the company's agent, and drew up the application, making certain representations as to the distances at which the building stood from other buildings. When the application was made and signed, Ide stated to Brown (the person assured) that the application was correct, and contained all that the company required, that he, Brown, had nothing to do or say about making or preparing the application or making the measurement or survey. When the application was presented to Brown to sign, he stated to Ide that he did not know anything about the rules and regulations of the company, to which Ide replied that he was agent and surveyor; that the application as prepared, was all the company required; Brown then said that relying on the correctness of Ide's statements, as to the sufficiency of the application, he would sign it; and did sign it; Ide forwarded it to the company's office and the policy was issued on it, and delivered by Ide to the plaintiff. At the trial it was proved that the representations in the application were not correct. It was contended that the facts created an estoppel against the insurance company, alleging a breach of the warranty. But the court say:
'If the doctrine of estoppel could have such an application, it would entirely abrogate that established rule, that parol evidence is not admissible to contradict or vary a written contract.
'The application is the application of the plaintiff; the signature of the agent only imports that he procured the application for the company; and when the plaintiff seeks to enforce the contract of insurance, he must take it according to its terms; and submit to whatever makes against him as well as assert whatever makes in his favor.'
If the position taken in the Circuit Court be affirmed, it will be as applicable to litigated cases on promissory notes, and other written contracts. In all these cases the statements-the parol agreements-of the parties will be admissible to estop each other, and hence to contradict and vary the written contract. It has ever been held that the written contract shall be an estoppel of all contemporaneous agreements. The rule is one of the highest value. This new rule is the converse of it.
Messrs. McCrary, Miller, and McCrary, contra,
On the first part of the case cited Wilkinson v. Connecticut Mutual Life Insurance Company. 
On the second they relied on the fifth edition of the American Leading Cases;  as containing the latest and most complete list and review of the cases; the whole concluding with a judgment adverse to the view taken in the cases of Smith v. Empire Insurance Company, and Brown v. Cattaraugus Mutual Insurance Company, cited and relied on by the other side.
Mr. Justice MILLER delivered the opinion of the court.
^1 25 Barbour, 497
^2 18 New York, 385.
^3 30 Iowa, 119.
^4 Vol. 2, p. 917; note to Carpenter v. Insurance Co.