Insurance Company v. Pyle.

examined. About a week after, plaintiff did so, and was asked about his heart, and answered that it bothered him sometimes; that, after working hard, he got weak and nervous sometimes; that he took whisky and ginger for it. Plaintiff left, and they made out the application. Plaintiff called on Nipgen repeatedly about the matter, and he claimed that he had not yet heard from the company; then, about two months after that, Nipgen claimed the application, meaning the new or corrected one, had been mislaid in the Cincinnati office of defendant. Then Nipgen and Scearce made out another application, and sent it on. This was the third application, and was made without the knowledge of plaintiff. When plaintiff again called on Nipgen, he was informed by him that the company had declined his application.

There were attempts to get a new or corrected policy in place of the original one.

On August 1, 1873, or thereabouts, plaintiff informed Nipgen that he was ready to make payment whenever he, Nipgen, would get it fixed. The defendant, upon receiving the third application, and without the knowledge or consent of plaintiff, canceled and annulled said policy of August 31, 1872. This was, as plaintiff thinks, at or about the expiration of one year from the time it was issued. Upon being informed of said cancellation of said policy, some time in September, 1873, the precise time not now remembered, plaintiff demanded from said agent and said company, the re-payment of his money so paid as premium, which was refused.

Wherefore plaintiff prays judgment against said defendant for said sum of $219.20, with interest thereon, from August 31, 1872; or, if the court shall be of opinion that an action to recover back the money paid is not the proper action, then that the plaintiff may recover from the defendant the sum of $500, his damages herein sustained; or that defendant, upon being paid the back premiums on said policy, may be ordered to rescind the cancellation and annulling of said policy, and to correct the same as to said

Insurance Company v. Pyle.

answer mentioned, according to the fact, and for other proper relief.

A demurrer to this petition was overruled, and the insurance company answered, denying that plaintiff "told said Nipgen that he, plaintiff, had failed in getting a policy of insurance in June, 1871, in the Charter Oak Insurance Company, of which Mr. Schutte was agent, on account of something being the matter with his pulse;" that " Nipgen then asked plaintiff if the application had been sent to the company;" that "plaintiff replied that it had not as he knew of, to which Nipgen responded that if it had not gone farther than that, it did not make any difference," and says that no such conversation took place between the plaintiff and Nipgen; also, the company denied other specific allegations, but it did not deny that its agent, Nipgen, wrote the application. To this answer plaintiff replied, denying some specific allegations of the answer. On the trial, by request of defendant, the court found, as its conclusions of fact, that in addition to the facts admitted by the pleadings, that several of the answers to questions contained in the application of the plaintiff, on which the policy of insurance was issued, were erroneously answered, which answers were by the terms of the policy made warranties, but the court further finds that all of said questions so erroneously answered by the plaintiff, were so answered under au innocent misapprehension of the purport of the questions and the answers, and the answers that should have been made thereto, and without any intent to perpetrate a fraud of any kind upon the defendant. The court further finds that the untruth of several of said answers was upon questions material to the risk, and that by the terms of said policy and the application which became and was a part thereof, the untruth of said answers constituted breaches of the warranties in respect thereof contained in said policy, and that by its terms the breach of said warranties was to make said policy null and void.

The court finds as conclusions of law, that the plaintiff is not entitled to have the cancellation of said policy of

Insurance Company v. Pyle.

insurance set aside, nor to have the same reformed in any particular, and that the same is wholly void, and of no effect whatever, and was so from the moment it was issued.

The court further finds as a conclusion of law, that the plaintiff is entitled to recover of the defendant the sum of $219.20, the premium paid, with interest from the 21st day of August, 1872, to which the defendant, by counsel, excepted.

A motion for a new trial was overruled, and the ruling excepted to, and judgment was entered for Pyle.

The district court affirmed this judgment, and plaintiff in error now seeks to reverse these judgments.

Lawrence T. Neal, for plaintiff in error.

This is not a case in which the rule that the premium must be returned where the risk has not attached or commenced to run, can be applied. Upon the filing of the application, the payment of the premium, and the issuing of the policy, the contract between the parties was complete, and the risk then attached. This was not prevented by the declarations in the application and policy that fair and true answers should be given to the questions in the application, and that any untrue or evasive statements, or any misrepresentation or concealment of facts, should nullify the policy. These provisions were inserted for the benefit of the company. The policy was not void, but simply voidable at the option of the company.

The company might have waived the provisions which authorized it to declare the policy void upon the terms and conditions named therein, aud, in that event, the risk, which did run for one year, would have continued to run. Insurance Company v. Norton, 96 U. S. 234.

The premium was, therefore, rightfully retained by the company when it elected to annul the policy, the rule being that if the risk once attaches the premium can not be returned. Bliss Life Ins., sec. 423; Fulton v. Lancaster, Ohio Ins. Co., 7 Ohio (2 pt.), 5.

The rights of the parties are to be determined by the

Insurance Company v. Pyle.

contract between them, and by the express terms of this contract the premium was to be forfeited to the company if there should be in any of the answers of Pyle "any untrue or evasive statement, or any misrepresentations or concealment of facts." The terms of this agreement can not be altered or varied by interpolating new words, or by giving to the words used by the parties other than their ordinary meaning. It has been repeatedly held, in like cases, that the premium can not be recovered. Bliss Life Ins., SS 37, 63; Ellis Fire and Life Ins. 260; Angell Fire and Life Ins., § 402; Byers v. Insurance Company, 35 Ohio St. 606; Anderson v. Fitzgerald, 4 Ho. Lords Cas. 484; s. c., 24 Eng. Law and Eq. 1; Miles v. Connecticut Mut. Life Ins. Co., 3 Gray, 580, 582; Duckett v. Williams, 2 Cromp. & Mees. 348; s. c., 4 Tyrwh. 240; Day v. Mutual Ben. Life Ins. Co., 1 McArthur, 41; s. c., 29 Am. Rep. 565; Low v. Union Cen. Life Ins. Co., 6 Cin. Law Bull. 666.

The only ground upon which the premium can be recovered by the insured in any case where the policy is void ab initio, is that there is no consideration for its payment in the first instance. But there was a consideration. The responsibility assumed by the company, the risk and inconvenience to which it was exposed, and the expense incurred in commissions to its agents, and otherwise, constituted a sufficient consideration. Lewis v. Phoenix Mut. Life Ins. Co., 39 Conn. 100.

The insured can in no case recover the premium if there has been any fraud upon his part. May on Insurance, § 567; Angel Fire and Life Ins., § 400; Bliss Life Ins. 423; Ellis Fire and Life Ins. 141.

The misrepresentations made by Pyle, whether made purposely or unintentionally, should be treated as fraudulent. Bliss Life Ins., § 36; 1 Story Eq. Jur., § 193; Friesmuth v. Agawam Mut. Fire Ins. Co., 10 Cush. 587.

Clark & McDougal, for defendant in error.

Whatever questions were erroneously answered were so answered by the agent of the company-at his dictation,

Insurance Company v. Pyle

and by him written in the application-after having been fully advised by Pyle of all the circumstances. Such wrong should be imputed to the company, and not to the insured. Insurance Company v. Williams, 39 Ohio St. 584, 588; Massachusetts Life Ins. Co. v. Eshelman, 30 Ohio St. 647, 656.

The answers of the insured as to the condition of his health are made warranties by the terms of the policy. Such warranties are, however, in the nature of conditions precedent. O'Niel v. Buffalo Fire Ins. Co., 3 N. Y. 122; Ripley v. Etna Ins. Co., 30 N. Y. 136.

A contract made upon a condition precedent can only become a valid contract upon the existence of the condition according to the terms agreed upon by the parties. The answers being in certain particulars untrue-incorrectand the truth of these auswers being made warranties by the terms of the policy, the policy itself never took effect as a contract of insurance. Pyle was at no time insured, for the company was at no time bound by the policy; and the questions having been answered under an innocent mistake as to their import, and without any intention to deceive, the premium should be returned. 3 Kent's Com. *341, *342; Steinback v. Rhinelander, 3 John. Cas. 274, 275; Tyrie v. Fletcher, Cowp. 666; Marshall on Insurance, 549; Delavigne v. United Ins. Co., 1 John. Cas. 310; s. c., 1 N. Y. Com. Law Rep. 335.

A policy of insurance is a contract to be governed by the same principles which govern other contracts. May on Ins., §§ 172, 173; Cornfoot v. Fowke, 6 Mess. & Wels. 368; Turley v. North Am. Fire Ins. Co., 25 Wend. 374, 377.

When the risk has not been run, whether its not having been run was owing to the fault, pleasure, or will of the insured, or to any other cause, the premium shall be returned. May on Ins., § 4; Stevenson v. Snow, 3 Burr. 1237; Tyrie v. Fletcher, Cowp. 668; Pothier du Cont. d'Ass. 4; Pardessus, Droit Commercial, 596, 3; 2 Marsh. Ins. 663.

If a policy be void ab initio, or if the risk never attaches, and there is no fraud on the part of the insured, and the