Imágenes de páginas

applicant, to kill him, or imagining something The doctrine contended for by appellant, to exist that did not,-would be a serious that a warranty must be strictly complied with. question."

is fully maintained by the authorities quoted in In the written examination the question was his brief. asked: “(6) Any history of mental derange- Mr. Bliss, in his work on Insurance, says: ment?" to which the applicant answered, “By introducing them, they stipulate, in effect, "No." In the medical examination is the that tbey are so material that if not strictly printed question to the applicant: “(89) Ever complied with the whole contract is rendered spat blood, or any bistory of chronic hoarse void. A misstatement in a warranty is there. pess or cough, or of asthma, or shortness of fore fatal to the contract, although arising from breath?” To which the insured answered, the most innocent mistake, or from false infor"No."

mation afforded by others, or from mere inad. The controverted questions as to breaches of vertence, and as much so as if made with the warranty raised by the pleadings, referred to in most willfully fraudulent intent." Section 36. the evidence and discussed in the brief of ap- In the case of Jeffries v. Economicul Mut. L. pellant's coupsel, are thus stated in the brief: Ing. Co. 89 U. S. 22 Wall. 53 [22 L. ed. 835), * The applicant covenants in writing, and war- the court says: “The proposition at the founrants, that to the best of his knowledge and dation of this point is this: that the statements belief he is in sound physical condition. He and declarations made in the policy sball be warrants that he bas not sought medical advice true. This stipulation is not expressed to be for anything within the last three years. He made as to important or material statements warrants that there has been no mental de-only, or to those supposed to be material, but rangement. He warrants that there is no ap- as to all statements. The statements need not plication pending for other insurance. He come up to the degree of warranties. They warrants that there has been no severe illness, need not be representations, even, if this term coughs or other ailments,” etc.

conveys an idea of an affirmation having any It is contended that the court erred in refus- technical character. "Statements and declara. ing to give the following charge at the request tions' is the expression; what the applicant of defendant:

states, and what the applicant declares. Noth. “If the jury believe from the evidence that ing can be more simple. If he makes any Henry Clay Hazlewood, in the application for statement in the application, it inust be true. the policy of assurance, warranted that all the If he makes any declaration in the application, statements in such application, and all the it must be true. A faithful performance of this statements and answers made to the Society's agreement is made an express condition to the medical examiner, were true, and that such ap- existence of a liability on the part of the complication was made a part of the policy, and it pany.' Again, on page 56 (836): “Many was therein provided that if any statement in cases may be found wbich hold that where false such application was in any respect untrue, the answers are made to inquiries which do not resaid policy should be void, then I charge you late to the risk the policy is not necessarily that all three of such instruments, taken to avoided, unless they influenced the mind of the gether, constitute the contract between the par- company, and that whether tbey are material is ties, and a warranty on the part of the assured for the determination of the jury. But we that all the statements and answers to the med- know of no respectable authority which so ical examiner were true; and, if you further bolds, where it is expressly covenanted, as a believe from the evidence that the said Henry condition of liability, that the statements and Clay Hazlewood, in his medical examination, declarations made in the application are true, in answer to the printed questions propounded and when the truth of such statements forms by the Society, had bis answers to said ques- the basis of the contract.” tions put down in writing by the medical ex- In the case of Ætna L. Ins. Co. v. France, aminer opposite said questions, after said Ha- 91 U. S. 512 (23 L. ed. 402], the court adopts zlewood bad signed said medical examination, the reasoning in the above case, and adds: “It and that after said answers were put down he is only necessary to reiterate that all the stateread over and examined the same, and assented ments contained in the proposal must be true; thereto, and tbe same was sent forward with the that the materiality of such statements is reapplication, as the basis of the policy, and the moved from the consideration of the court or same was issued by defendant upon the reliance jury by the agreement of the parties that such of the truth of such answers, then, if you find statements are absolutely true, and, if untrue from the evidence that said written answers in in any respect, the policy shall be void.” said medical examination were is any respect In the case of New York L. Ins. Co. v. untrue, you will find for the defendant;" Fletcher, 117 U. S. 519 [29 L. ed. 934), reand also: “In refusing to grant the de- ferred to in the brief of appellant, the insured fendant's motion for a new trial in this, that it inade certain statements and representations was clearly proved that the contract wus em- respecting himself, his life and his past and braced in the application, the answers of the present health, to which he appended a declaassured to the medical examiner, and the pol. ration warranting their truthfulness, and agreeicy, taken together, and they constitute a war. ing that they should be the basis of any conranty that the statements therein made were tract between him and the company, and that true, when the facts fully show that they were if they, or any of them, were in any respect not irue, that at the time of the application the uptrue the policy which might be issued thereon assured was not in sound physical condition, should be void; and further agreeing that, in. but was in bad health, and misled defendant asmuch as only the officers of the home oflice and its officers by his statements regarding his bad authority to determine whether or not a condition."

policy should issue on any application, and as they acted only on the written statements and any respect” untrue as they should find for the representations refire :) to, po statements or defendant, extended the warranty of the inrepresentations made or information given to sured so as to bind him for the truth of the the persons soliciting or taking the application answers as written, instead of their truth as for ibe policy should be binding on the com- given by him. In view of the fact that plainpany, or in any manner affect its rights, un- tiff's contention was that the insured gave true less they were reduced to writing, and pre- answers to the questions, wbich were incorsented at the home office, in the application. rectly written down and reported by the medi The statements and representations, with this cal examiner, and that the insured did not read declaration accompanying the application, and the answers, or sign the paper containing them, forming part of it, were forwarded to the home which there was evidence lending to support, office. The policy recited that it was in con- we think the charge was incorrect in this parsideration and upon the faith of the statements ticular. and representations contained in his applica- The signature of the insured, being at the tion, all of which had been warranted by bim beginning of the examination instead of at its to be true. In delivering the opinion of the close, seems to us to have been required to be court, Justice Field says: “It was his duty to placed there as one means of identifying bim read the application he signed. He knew that as the person who had made the application, upon it the policy would be issued, if issued at ratber iban for tbe purpose of binding him, as all. It would introduce great uncertainty in a party, for the truth of the contents of the all business transactions if a party making paper. written proposals for a contract, with repre. The assumption in the charge that the insentations to induce its execution, should be sured “had bis answers to said questions put allowed to show, after it had been obtained, down in writing by the medical examiner” that he did not know the contents of his pro- finds nothing in the evidence to support it. posals, and to enforce it, notwithstanding their The direction to find for the defendant, if the falsity as to matters essential to its obligation jury should find the written answers were in and validity: Contracts could not be made, or any respect” untrue, was, we think, if po business fairly conducted, if such a rule should other objection to it existed, inapplicable to prevail. . . . But here the right is asserted to this case, and tended to mislead the jury; prove, not only that the assured did not make Under it, the jury would have been required The statements contained in his answers, but to consider every answer of the insured, that he never read the application, and to re- whether any contention existed over it or not, cover, upon a contract obtained by representa and however difficult it might have proved for tions admitted to be false, just as though they them to separate answers really proceeding were true. If he had read even the printed from the medical examiner bimself from those lines of his application, he would bave seen made by the insured; and, if ibey believed any that it stipulated that the rights of the com- one answer was in any particular untrue, they pany could in no respect be affected by his could bave found against plaintiff for that reaverbal statements, or by those of his agents, son. No charge on the subject should have unless the same were reduced to writing, and been given that was not confined to such ques. forwarded, with his application, to the home tions and answers as were put in issue by the oflice."

pleadings and evidence, and the one requested We think there is a material difference be should not have been given, because not so tween the undertaking by the insured in that limited, case and in the one before us. In that case be What we have said about the charge is apagreed that he would be bound by the state- plicable to the assignment of error with regard ments as written down, and that no statements io overruling defendant's motion for new trial, not written down should be binding on the predicated upon the same ground. While the company, or in any manner affect its rights. insured cannot, as is contended for by appelIn the case before us the agreement of the in- lant, be held bound as a warrantor for the sured was that his answers made, or to be truth of the answers as written, it does not by made, to the medical examiner were warranted any means follow tbat he was under no obligato be true. He did not warrant that his an- tion about their being correctly written down, swers would be written down correctly by the in so much as that depended upon him, or was medical examiner, or that the answers given properly within his control. He had under. by him would be correctly reported to the taken to make true answers; and he must be company. While the doctrine of warranty presumed to have known that the object in will be strictly applied, it should be as strictly baving them written down was to furnish inlimited to the precise undertaking of the party formation to the absent officers of the corporamaking it. If, beyond requiring that the in- tion of material importance to them in detersured should warrant the truth of all answers | mining whether or not they would execute the given by him, the company intended, as it had contract. Where there were no circumstances the right to do, that he should also warrant to excite his suspicion to the contrary, we see that his answers should be correctly written no reason, bowever, why he may not bave down and reported, and that he would warrant trusted to the medical examiner's correct and them, not only as given by himself, but as honest performance of his duty. We do not written down, the agreement could have been think his contract, or the exercise of ordinary made to so express, and it ought to have been prudence, demanded of him to assume that done. The charge as requested by the defend there was any want of capacity, care or honesty ant, as above stated, and refused by the court, upon the part of the medical examiner, or reading that if the jury found from the evi- make it his duty to assume the exercise of a dence that said "written” answers were "in supervisory power over the work of that officer. As a general rule, no doubt, the subjects of in. / whether it was a wagering policy, the statezurance will be but little qualified for such a ments made by the witness were pertinent, and lask. If, however, it did by any means come have no tendency to control any written evi. to the knowledge of the insured tbat answers dence or the contract. Nor can we see any given by bim had been incorrectly written impropriety in permitting the agent of the cordown, it then became bis duty to see that the poration to give the subject of the insurance proper corrections were made; and, if he failed information about facts proper for him to know. io do so, then, although not bound by a war. Lodges that furnish insurance to their members ranty, plaintiff ought now to be held estopped may also perform other important functions. from disputing them as written; and if, under and a rejection of an applicant by one of them such circumstances, incorrectly written an- would not necessarily be predicated upon his swers materially affected the risk, and the is unfitness for insurance. It may be a rule of sue was properly raised by the pleadings, and lbe defendant company not to treat such socie sustained by the evidence, a recovery ought lies as coming within the meaning of the ques. not to be had. We deem it sufficient to say tion, and, if it is, we are not able 10 perceive ibat we do not think this character of issue any sufficient reason why the fact that the was presented by the pleadings or the charge statement was made may not be proved. Out: of the court, and the record before us suggests side of the evidence objected to, the record that the evidence upon it would have been fails to show that the insured in fact ever made thorougbly conflicting, and amply sufficient to an application for such membership, or that he support a verdict in favor of plaintiff.

was ever rejected. The defendant alleged in its answer that the It is coniended that the plaintiff had no ininsurance was inken out by plaintiff as a specu- surable interest in his brother's life, wherefore lative and wagering policy. It was proved the cause of action sued upon was a wagering that plaintiff loaned to the insured the money contract, and void, as against public policy. with which he paid the required premium. The rule is stated generally, in Bliss on Life The corporation's agent, through whom the in Insurance, 87, that "no person can procure a surance was effected, was permitted to testify valid insurance upon a life, unless he has an 1o the negotiations preceding the application, interest in such life. The Supreme Court of tending to show that both the plaintiff and the the United States, in the case of Connecticut insured were urged by the agent of the corpo. Hut. F. Ins. Co. v. Schaefer, 94 U. S. 460 [24 L. ration to apply for the insurance; that ibe ed. 253), says: “ It is generally agreed that premium was paid by the insured; and that he mere wager policies, that is, policies in which first thought of making the minor children of the insured pariy bas no interest whatever in the plaintiff the beneficiaries of the policy, but the matter insured, but only an interest in its he finally concluded not to do so, because, in loss or destruction, are void, as against public the event of his own marriage and desire to policy. . . . It is well settled that a man has change the beneficiary to one more nearly an insurable interest in his own life, and in connected with himself, it would be easier ac that of his wife and children; a woman, in the complished if his brother was the beneticiary life of her husband, and the creditor in ihe life ihan it would be if his minor children were the of his debtor. Indeed, it may be said generally beneficiaries.

that any reasonable expectation of pecuniary The application for ingurance contains the benefit or advantage from the continued life of following questions and answers: “ Is any another creates an insurable interest in such negotiation for other insurance now pending life; and there is no doubt that a man may or contemplated?” to which the insured an effect an insurance on his own life for the ben swered in writing, "No." “Has a policy ever efit of a relative or friend. The essential been applied for which was not thereafter is thing is that the policy shall be obtained in sued, or which, if issued, was moditied in good faith and not for the purpose of specuamount, kind or rates ? If yes, for what com.lating upon the hazard of a life in which the pany, and when?” to which the insured an assured has no interest.” swered in writing, “No." There was conflict. In the case of Price v. Knights of Honor, ing evidence as 10 whether the insured had Chief Justice Willie, speaking for the court, not applied for membership in an order known said: “It is almost universally conceded that as the Legion of Honor.”

policies procured by persons having no inter: Plaintiff, was permitted to prove, by the est in the life of the insured are void at comagent of the corporation by whom the applica- mon law, as against public policy.” 68 Tex. tion was secured, that pending negotiations be. 366. tween him and the insured, and before the in: In the case of Ætna L. Ins. Co. v. France, sured made answer to said questions, he (the 94 U. S. 561 [24 L. ed. 287), it appears that the insured) asked him (the agent) “what was insurance was applied for by Chew on his own meant by ibat,-if it referred to assessment | life, for the benefit of his sister, Lucetta P. companies or mutual companies.” Witness France, who was a married woman, and in no explained that it did not; and the insured then way dependant on her brother for her support. said he had made application to the Legion of the evidence tended to show that Mrs. France Honor for assurance, whereupon witness told bad at different times loaned her brother him that the Legion of Honor was a mutual $2,400. The insurance was $10,000. At the company, and was not regarded as a life insur- time the policy was issued Chew was unmarance company, and he was instructed by the ried, but was engaged to be married, and was general agent of defendant not to consider in fact married the next day. The policy was them as assurance companies.

held “sustainable at law, on account of the We think the evidence was properly admit- nearness of the relationship between the parted in each instance. On the issue as to ties, and especially as Mrs. France, at the time une insurance was effected, was one of Chew's , such sums as he may have disbursed for the bext of kin. prospectively interested in his purpose of keeping the policy alive; and the estate as a distribuiee."

surplus may be collected for the benefit of the The doctrine is well settled by the weight of heirs of the person whose life was insured. authority that a person not having an insura. We see no reason why the same rule may not ble interest in the life of another cannot take be applied to a person designated in the policy and hold by an assignment a policy upon the as the beneficiary treating him. when he bas life of such other person, and that a creditor no insurable interest as an assignee, appointee can only take and hold such a policy, by as or trustee, to receive the proceeds for whoever signment, to an extent sufficient to secure his inay be lawfully entitled to enjoy them. The debt. Cammack v. Lewis, 82 U. S. 15 Wall. insurer will then be required to pay the sum it 643 (21 L. ed. 244); Warnock v. Davis, 104 U. has promised to pay, and the money cannot be S. 782 (26_L. ed. 927]; Price v. Knights of appropriated by anybody not having a legitiHonor, 68 Tex. 366.

mate right to it. It is contended by appellee that every person The exact degree of relationship that must has an insurable interest in his own life, and exist between two persons to give one an insur. that when he is the actor he may take out an able interest in the life of the other, on account unlimited amount of insurance upon his own of the relationship alone, we bave not found to life and make it payable to whomever he may be clearly defined. Brothers and sisters seem please, as beneficiary, without regard to such to be on the dividing line. Wbether that deperson's having an insurable interest in his own gree of relationship can be includeil, hus been life.

disputed. The case of Ælna L. Ins. Co. v. In Bliss, on Life Insurance, it is said: “A France, supra, is an authority in support of person bas undoubtedly an insurable interest in the proposition that it may be incluiled, and his own life, and that interest supporis a policy we are unwilling to hold that it ought io be whether he makes the loss payable to himself. excluded. bis executors, or his assigns, or to a nominee To what extent a creditor may insure the or appointee named in the policy. Nor is a life of his debtor is not announced when it is policy obtained by one on his own life, for the decided that he can only appropriate of such benefit of another, wbich latter advances the insurance an amount suilicient to pay his debt premium, necessarily void. The question is and interest. He must be allowed to provide whether ihe policy was in fact intended to be for a sum sufficient, when collected, to cover what it purports to be, or whether the form his demand, and such disbursemenis as may be Wis adopied as a cover for a mere wager. If required to keep the policy in force, with acthe plaintiff and the insured confederate to crued interest. The sum required for the pur. gether to procure a policy for the plaintiff's pose may very many times exceed the debi. benefit, when he is not, and does not expect 10 It would be an extreme case in which a court be, a creditor of the insured, and with a view would be justified in saying that the amount of having the policy assigned to him without secured was too great. When the insurance is consideration, the policy is void.” Section 26. obtained by a person on his own life, and made

The only distinction we can see in any case payable originally, or by assignment, 10 an. between tbe assignment of a policy taken by a oiber, having pone, or only a limited insurable person on his own life to one baving no insur interest in his life, as the surplus after the payable interest, and the designating such person, ment of the charges will go io the party whose without insurable interest, in the original life is insured, we see no reason for limiting transaction as the beneficiary, is that the in the amount for which the insurance may be surer may not know of the assignment, but taken out. When the insurance is not conwould necessarily be aware of the designation tracted for by the person whose life is insured, in the policy. So far as the question of public but by a creditor, in bis own dame, so that policy is concerned, we can see no substantial there is no porty to the contract except him distiuction between the two proceedings; and self and the insurer, it becomes iminaterial if one is invalid, it seems to us the other ought what amount may be contracted for, as no to be held equally so.

more will be collected that will be uliimately An assignment of a valid policy to one bav. sufficient to discharge bis debt and disburse. ing no insurable interest in the life insured does ments on the policy, including interest upon not in validate the policy. The assignee may both. collect and apply the proceeds, if he is a cred- We find no error in the proceedings, and the itor, to the extinguishment of bis own debt and I judgment is affirmed.

F. F. ADAMS, Appt.

the amount due as attorney's fees, 0.

“should suit be commenced or an attorney em

ployed,” destroys its negotiability under Civ. C. C. SEAMAN, Impleaded, etc., Respt.

Code, & 3188, proviaing thac negotiable instru

ments must be “ without any coudition not cer(........Cal.........)

tain of fulfillment." A provision in a note for a percentage of

(January 25, 1890.)

Effect on negotiability of note. See note to Bowie v. Hall (Md.) 1 L. R. A. 647.

NOTE.-A stipulation in a note for ten per cent attorney's fees in addition to interest is void in Michigan. Wright v. Traver (Mich.) 3 L. R. A. 50, note.

See also 33 L. R. A. 767.


the Superior Court for San Diego County dorsee before maturity, not subject to any equi. allowing defendant's claim to a set-off in an ties of the maker against the original payee, if it action upon an alleged negotiable promissory did not contain the following clause: "Should note. Affirmed.

suit be commenced, or an attorney employed, to The case sufficiently appears in the opinion. enforce the payment of this note, I agree to

Messrs. Haggin, Van Ness & Dibble, pay the additional sum of 5 per cent on princi. with Messrs. Hunsaker & Britt, for appel- | pal and interest accrued as attorney's fees in lant:

such suit." The court below held that this The percentage clause did not render the note clause rendered the note non-negotiable, and non-negotiable.

we think that the court was right in so holding. Peyser v. Cole, 11 Or, 39; Sperry v. Horr, 32 When one man promises to pay money to Iowa, 184; Heard v. Dubuque Co. Bank, 8 Neb. another in the future, if he puts that promise 10; Seaton v. Scovill, 18 Kan. 435; Smith v. in the form of a negotiable paper, he gives to Silrers, 32 Ind. 321; First Nat. Bank v. Canat- the promise characteristics which do not be. sey, 34 Ind. 149; Stoneman v. Pyle, 35 Ind. 103; long at all to ordinary indebtedness. If A Gaar v. Louisville Bkg. Co. 11 Bush, 180. merely promises, either orally or by common

Where the provision is for a specified per- writing, to pay B $1,000 at the expiration of centage, the note is negotiable.

ten months, and dur that time B becomes Dietrich v. Bayhi, 23 La. Ann. 767; Overton indebted to A on other transactions in the sum V. Matthews, 35 Ark. 147; Farmers Nat. Bank of $500, the latter sum can be set off against the v. Rasmussen, 1 Dak. 57; Hubbard v. Harrison, former; and it can be so set off against an as38 Ind. 325; Trader v. Chidester, 41 Ark. 244; signee of B if it accrued before notice of asNickerson v. Sheldon, 33 Il. 372. See also signment. But, if the promise be made in the Hughitt v. Johnson, 28 Fed. Rep. 865; Schles- shape of a negotiable promissory note, then, if inger v. Arline, 31 Fed. Rep. 648; Smith v. Bindorse the note before the expiration of the Kendall, 9 Mich. 211; Leggett v. Jones, 10 Wis. ten months to a third party, the latter can 34; Horoenstein v. Barnis, 5 Dill. 483; Wilson compel A to pay him the whole amount of the Sering Mach. Co. v. Moreno, 6 Sawy. 37. note, no matter how many set:olls he may have

Where the amount to be paid is ascertain against B. In order, however, for this to be able upon the face of the note, without resort so, the note must clearly comply with the to evidence dehors the instrument, the paper is requisites of negotiable paper. And one of Degotiable.

the main requisites, in addition to negotiable Windsor Sad. Bank v. McMahon (Iowa) 3 L. words, such as payable "to order” or bearR. A. 192, 38 Fed. Rep. 283.

er,” is absolute certainty as to the amount of The amount to be paid is certain where the money to be paid; a certainty which must apsum to become absolutely payable upon it at pear on the face of the instrument. No part any given time is ascertainable upon its face. of tbe amount must depend on any contingency Toune v. Rice, 122 Mass. 67.

which may or may not bappen, or upon the Notes containing stipulations to pay counsel proof of any fact other than the genuineness of fees are in common use in this State.

ibe instrument itself. See Whitcher v. Webb, 44 Cal. 127.

There have been many conflicting decisions If the additional stipulations be regarded as in other States on the question whether, at com. in the nature of penalties, and therefore void, mon law, a promise in a note for attorney's tney would simply be surplusage, and would fees, in case suit be brought, destroys the cer. pot impair the negotiability of the paper. tainty which negotiable paper must have. The

1 Daniel, Neg. Inst. 3d ed. 620; Gaur v. point has never been conclusively determined Louiscille Bkg. Co. 11 Bush, 182; Witherspoon by this court; but in Chase v. Whitmore, 68 v. Musselman, 14 Bush, 214; Bullock v. Taylor, Cal. 548, the opinion of the court coniains the 39 Mich. 138; Myer v. Hart, 40 Mich. 517. following language: Besides, the note proMr. F. W. Burnett, for respondent: vided for the payment of a reasonable attor

The clause referred to in the note rendered pey's fee, and that, under our Code, destroyed it non-negotiable.

its negotiability. . . . In other States the rule Civil Code, $ 3087; Chase v. Whitmore, 68 is not uniform upon this subject, some of them Cal. 515; Garretson v. Purdy, 3 Dak. 178. holding that such a provision does, and otbers

that it does not, destroy the negotiable character McFarland, J., delivered the opinion of of the instrument.” the court:

It is contended by appellant that Chase v. This action was brought by plaintiff upon Whitmore is not conclusive authority on the what he alleges to be a negotiable promissory point, because in that case the assignment was note made by defendant Seaman to the order of made after the maturity of the note, and the one 0. S. Hubbell, and indorsed and assigned language quoted was not necessary to the deby Hubbell to plaintiff before maturity. Sea- cision, and therefore dictum. This is true; man, in his answer, pleads as set-off certain but, as the point appears to have been quite debis due bim from Hubbell before the assign- elaborately considered, and as the opinion was ment. Plaintiff demurred to this part of the an. concurred in by the whole court in bank, wbat swer, and his demurrer was overruled. After was said is entitled to great weight, if it be not trial the court allowed certain of these set-offs, taken as anthority in the strict sense. The and gave judgment for plaintiff only for the language there employed was directly based on balance due on the note, after deducing the set the provisions of our Civil Code upon the offs. Plaintiff appeals from the judgment. The subject; and we think that it correctly applied only question presented is, Was the instrument the meaning of the Code to the question under sued on a negotiable note? The instrument discussion. Section 3087, art. 1, cbap. 1, title

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