Opinion
July Term, 1896.
E.G. Mansfield, for the plaintiff.
William L. Marcy, for the defendant.
This action was brought to recover $2,000 and interest upon a policy of insurance issued by the defendant, a corporation transacting its business at Chicago, Illinois, upon the life of the plaintiff's son, Simon Maloney. The policy was made payable, in case of the death of the son, to his mother, the plaintiff. Pursuant to the rules of the defendant, an application was made for this insurance by Simon Maloney to the defendant, dated the 26th of February, 1894, and in writing, which contained an agreement that all the statements made in the application were material and were warranted to be true, and the application, including that agreement, was thereby made a part of any certificate of membership or policy that might be issued pursuant thereto, and "that said certificate of membership or policy shall not take effect until the first bi-monthly premium shall have been paid, and the said certificate of membership or policy shall be issued and delivered to me during my lifetime and good health."
The seventh clause of the application was as follows: "Q. Are you now in good health? A. Yes. Q. Have you usually had good health? A. Yes." Then the applicant was asked if he had or ever had a large number of diseases, all of which he answered in the negative, but none of the questions included the disease known as typhoid fever. He was then asked: "Q. Have you now or have you ever had any disease, infirmity, weakness, ailment or disability of any kind not herein-before mentioned? A. No."
This application was forwarded to the defendant, and, there being some discrepancies in the statement in regard to the age of the applicant, on the second of March the secretary of the company at Chicago mailed a letter to Simon in which it was stated that in the application he had given his birth as the 15th day of August, 1869, and his age at nearest birthday, twenty-four, and that if the date of his birth was correctly given, he would be twenty-five years of age instead, and he was asked, in order that there might be no doubt as to his age, to answer the questions given as to his birth and the date thereof, and his age at nearest birthday, his age being material. At the close of this communication was the following statement, which appears to have been signed by Simon Maloney. He stated that his age was twenty-five at his nearest birthday, and proceeded: "I hereby expressly agree that the answers and statements by me made hereon, in reply to the foregoing questions, are full and true; and I agree that the same, together with my application for membership in the Northwestern Masonic Aid Association, shall constitute a warranty, and if found untrue, the contract to be made with me by said association, in accordance with said application, shall be null and void. Signed by Simon Maloney, applicant, at Buffalo, N Y, on this 14th day of March, 1894."
It is not questioned in the case but that this letter was executed at the time it bears date, nor but that it was signed by the authority of Simon. The evidence is undisputed in the case to the effect that, on the 2d of March, 1894, the assured (Simon) was taken sick with typhoid fever, was confined to his house, continued to grow worse, and on the fourteenth of March was dangerously ill from said disease, and died on the sixteenth day of March. He lived at home with the plaintiff, and was sick and died there.
Louis Newman, a witness for the plaintiff, who was a ticket broker in Buffalo, testified that Maloney was in his employ; that he did not see him from the time he was taken sick until after his death; that on the sixteenth of March, at about nine o'clock in the morning, a Mr. Koch, who acted as agent, with certain prescribed powers, for the defendant in Buffalo, came to witness' office and asked if Mr. Maloney was in the office (meaning the assured). The witness said he was not. We quote: "That he was home, sick; then he told me he had a policy for him. * * * He wanted to know if I would take it. I told him yes. He wanted to know if (I) would pay the $4.50, and I told him yes. That is the premium (the first bi-monthly premium), and I took the policy and put it away in the safe until it was called for."
The witness stated that he owed Simon three or four dollars salary, and advanced the money for the premium because Koch asked him for it. It does not appear that this witness had any authority from the assured to pay this premium and take the policy.
The witness further stated that he did not know what was the matter with Simon; did not know that he had the typhoid fever; that he thought that it was some simple malady at the time he made the statement to Koch.
Koch testified that he did deliver the policy and accepted the premium at the time and as stated by Newman, but that Newman made no statement in regard to the health or condition of Simon, or that he was sick at home, and he, Koch, had no knowledge at the time but that Simon was in perfect health. Simon died on the evening of the sixteenth of March. The complaint in this action, originally, was upon the policy, but upon the trial it was amended so as to allege that the provision in the policy that it should be delivered to the assured in his lifetime and in good health was waived.
The defendant's answer alleged that the policy was not issued or delivered to Simon during his life and while in good health, but while he was dangerously ill of typhoid fever, and that it was never, in fact, delivered to Simon.
The plaintiff seems to concede, as she must, that unless she can stand upon the alleged waiver she must fail. The act of waiver was not performed by the deceased. As we have seen, he died within a few hours after the policy was delivered to Newman, and had no knowledge of the facts of the delivery upon which the alleged waiver is based so far as the case discloses. So there was no ratification by the deceased of the acts of Newman, nor has there been any such ratification by any representative of the deceased, but a ratification is claimed by a stranger to the contract, the beneficiary thereof, the plaintiff. It is an elementary principle that a party cannot ratify what he could not originally authorize. The beneficiary could not, during the lifetime of Simon, have authorized Newman to take the delivery of this policy and pay the premium. Can she ratify it after the death of Simon? This is a serious question that meets the plaintiff upon the threshhold; but, in view of other decisive questions in the case, it is not necessary to determine that question. Assuming that the agent Koch had the power to waive for the defendant, as claimed by the plaintiff, was there, under the circumstances of this case, a waiver upon which the plaintiff can stand? The policy provided that it should be delivered to the assured in his lifetime and in good health, and should not take effect until the first bi-monthly payment was made. It was not delivered to the assured. He was dangerously ill when the policy was delivered to Newman. He did not make the first bi-monthly payment, and the plaintiff's whole case hinges upon what occurred with Newman, to which we have referred.
This leads us to the consideration of what a waiver is, and we find an excellent definition in Bishop on Contracts (ed. of 1887, § 792) as follows: "Waiver is where one in possession of any right, whether conferred by law or by contract, and of full knowledge of the material facts, does, or forbears the doing of, something inconsistent with the existence of the right or of his intention to rely upon it; thereupon he is said to have waived it, and he is precluded from claiming anything by reason of it afterward." The waiver then must be made " with full knowledge of the material facts." It cannot be claimed that the agent Koch acted in the light of all the facts or of the material facts. He was simply told that Maloney was sick at home. He was not told that he was dangerously sick; that he had a disease often fatal, and recognized as among the most dangerous of diseases, or that Simon had been dangerously ill and confined to his bed for two weeks; from what was said the agent might well have inferred that it was a temporary ailment and no wise affected his right under the policy, and such as people frequently have, which means nothing but a few days' detention at home. There was nothing in the statement to point to the death of Maloney, although he was then at the point of death and within a few hours of his death, or to indicate that the defendant might soon be called upon to pay $2,000 if it accepted the trivial sum of $4.50. If Newman was acting as the agent of the deceased, so that the plaintiff can avail herself of his acts, then he should have fully informed the agent of the truth and not suppress the important fact of the real condition of the assured. It is true that he says that he did not know what his true condition was. If that were so no amount of inquiry, on the part of the agent of Newman, would have elicited the fact.
Waiver belongs to the family of estoppel, and often in such cases they are convertible terms. The waiver is a defense, when the party insisting upon the contract has done something which in equity prevents the party from enforcing the contract, and if permitted to do so it would operate as a fraud upon the other party. Here at least there was a suppression of a most vital fact, by the representative of the insured, from the insurer, and to permit an estoppel in such a case would operate as a gross fraud upon the insurer. The agent had no reason to suspect from what was said at that time, on the sixteenth, that the deceased was dangerously ill, when but two days before he had been assured by a statement that appeared to have been signed by the assured that he was then in good health and capable of performing his contract, receiving his policy and paying the first premium, because the latter there affirms under date of March fourteenth, in his letter, wherein he corrects his age, the statements as to his health and his freedom from disease, which is made a warranty under the contract.
The agent would naturally conclude from this statement on the fourteenth that the illness was not serious, and be diverted by such statement from making further inquiries. If it be claimed that there was no intentional suppression of the facts from the agent by Newman, and that, therefore, no fraud was practiced upon the defendant, we then have a condition quite as fatal to the plaintiff's right to recover as if such fraud existed, because then the waiver was made in ignorance by both parties of the conditions which, if known, would have prevented the delivery of the policy and the acceptance of the premium. Waiver is an equitable defense as well as estoppel, and cannot be predicated upon a mistake of facts.
It seems clear, therefore, that there was not a waiver under the circumstances of this case which will permit the plaintiff to recover.
The defendant contends that the agent had no power to bind the company by the assumed waiver.
In view of the conclusions reached upon the other questions, it is, perhaps, unnecessary to consider this question at length. The extent and the limitations of this agent's authority to act for the defendant clearly appear in the evidence, and we fail to discover any such authority. The agent had power to deliver policies and collect premiums in cases where the condition imposed upon the assured by the contract had not been violated. He could only deliver a policy to an assured in health, and he could only take a premium from a person fulfilling those conditions. He could no more deliver a policy to a man stricken with a fatal disease and at the point of death and take a premium from him, which would bind the company as a waiver, than he could make such delivery to the personal representatives of a deceased.
In no aspect of this case can the plaintiff recover.
The motion for a new trial should be denied, with costs, and judgment entered upon the verdict in favor of the defendant.
All concurred.
Exceptions overruled and motion for a new trial denied, with costs, and judgment on the verdict ordered for the defendant, with costs.