Clemans v. . S.A.R.S. of G.F. , 131 N.Y. 485 ( 1892 )

The uncontradicted evidence in this case clearly showed that the assured, just prior to June 20, 1887, applied for insurance, by means of a written application signed by him, to the Prudential Life Insurance Company of America, and on that date his application was rejected by that company.

The learned court found that the assured made no false statements in his application for insurance to the company defendant. In such last-mentioned application he stated, in answer to questions asked therein, that he had applied to another insurance company for insurance, but had not been rejected. That this answer was false, cannot be disputed upon the uncontradicted evidence. The application and the answers thereto were part of the contract of insurance, and were made so by the certificate. The answer was a warranty, and upon this evidence there was a breach thereof. (Foot v. Ætna Life Ins. Co., 61 N.Y. 571;Cushman v. Ins. Co., 63 id. 404.)

It is not important that the party making the warranty really believed in its entire truth. If it be false, it avoids the contract. Nor does the mere knowledge of the agent of the company at the time when it is made, that the warranty is false, prevent the defendant from setting up the breach as a defense to the action on the policy. (Id.; Barteau v. Ins. Co., 67 N.Y. 595. )

The finding of the learned trial judge that the application of the assured to the Prudential Life Insurance Company was withdrawn was not supported by any evidence, as we think, while the finding that the facts were within the personal knowledge of the agent Jacobs, who procured this insurance, furnishes no answer to this charge of breach of warranty. Mere knowledge of the falsity is not, as we have seen, enough to prevent the defense from being set up. There is, as we think, sufficient evidence in this case to permit a jury to find that the agent of the defendant fraudulently concealed from the assured the fact that he had been rejected by another company to which he had applied through this same agent, and that such agent, while himself aware of the fact of such rejection, procured the assured to make application to this defendant through him as agent of the company and to innocently state that he had not been rejected by any other company, when the agent knew such statement was false. If such were the case we think the defendant would not be entitled to set up the breach of a warranty which had been thus procured. The case in such aspect would much resemble that of Plumb v. Ins. Co. (18 N.Y. 392).

There is evidence on the part of the defendant which contradicts this theory, for the agent swears the assured was rejected June twentieth, and that within two weeks thereof he so informed the assured and returned him the premium. What the trial court states in one of the findings of this case, we think, amounts to merely a statement of knowledge of the agent as to the falsity of the warranty when it was made. This is not a defense. There is no finding of fraud, and there is evidence in the case which, if believed, shows there was none. We cannot draw the inference of fraud in the first instance for the purpose of supporting a judgment, even where there is evidence which would permit the inference, because there is also evidence which, if believed, negatives its existence, and the judgment does not proceed upon the ground of fraud.

There is no evidence that the answers to the application were truly made and erroneously taken down by the agent of the company, and hence it does not come within the O'Brien and other kindred cases. (O'Brien v. Home Benefit Society of NewYork, 117 N.Y. 310.)

We must reverse this judgment and grant a new trial, costs to abide the event.

All concur.

Judgment reversed.