THE OBLIGATION OF THE INSURED AND THE

INSURER.

BY

R. C. MCMURTRIE, Esq.

WITH regard to the relations of the medical profession to life insurance, they occur in the formation of the contract and in the inquiry into causes of death.

1. As the contract is based on the average duration of human life, the known conditions that tend to shorten it are essential in forming a judgment as to the probability of the particular life that is to be insured coming up to the average or falling short.

These facts cannot practically be obtained from any one but the applicant or person whose life is to be insured, i.e., on the termination of whose life a payment is to be made. The facts when thus ascertained are made the subject of examination by medical experts. Accuracy is essential, as it is in all cases where inferences are dependent on facts. But the limitation of accuracy is the capacity of the person examined to give the information. This the insurer takes on himself unless the contract interferes. The insured, on the other hand, takes on himself the burden of answering truthfully.

Obviously there are likely to occur cases where the answers are perfectly truthful and yet absolutely untrue. The insured assumes this peril where the contract stipulates for accuracy as a basis of contracting. The person inquired of may have forgotten absolutely or temporarily a most important fact, or he may have been misinformed on a matter which he never could know saving by information, but which all of us speak of as if we knew; e.g., our age and the ages of ancestors, even relationship and parentage, are mere matters of hearsay, and yet are always spoken of as known facts. So they are practically; but it is evident that if they prove to be untrue there has been a misrepresentation in an essential fact which is the agreed basis of the contract. But this depends on the contract.

There is, then, another and a distinct class of facts, which are subject, however, to the same rule. It frequently happens that a fact is not supposed to be material, and is therefore omitted.

On the other hand, it is plain that as the insurer is the questioner and proposes to act on the information received, he must so frame his ques tions that men must be able to comprehend what facts they include.

Now here there must come in the same rule that, strangely enough,

seems to have surprised the legal profession when enunciated in Peek vs. Derry, 14 Appeal, 337.

Even where there is a warranty of the truth of the answers, this rule must be applied where the answer is literally correct but is liable to the charge of being an evasion. The insurer is entitled to a truthful answer; but whether the question has been truthfully answered must depend on what was understood by the question. It is impossible that the insured can be held to warrant the truth of the answer if no person but a highly educated expert could have supposed it included an inquiry as to a particular fact. This question is one for the jury-the answer being literally accurate-Did the man believe what he said, or did he knowingly conceal or suppress with intent to deceive by evasion? It is not what somebody else thinks he ought to have known from the information he had. This would make the matter turn on a false issue, and substitute the comprehension of a judge or jury for that of the man who spoke, which is near to requiring a warranty of truth irrespective of the comprehension of the question. It is obviously the same thing as what occurred in Peek vs. Derry. The question was whether there was a fraudulent and deceitful representation. The court below held there was a liability if the representation was founded on information which ought not to have been believed, or was quite insufficient to warrant the statement, it being such as no prudent man would have acted on. The court subsequently disclaimed all intention to assert willful and conscious falsehood.

In the House of Lords it was ruled, and it is now the settled law of England-till it shall have been changed by act of Parliament-that while the frivolity of the evidence on which a man is said to have made a representation is a ground for refusing belief to his assertion that he did rely on it, still there can be no action for deceit unless there was intentional or conscious falsehood. It is difficult to resist the argument that a fraudulent deceit involves moral turpitude, and that to substitute another's judgment as to the sufficiency of the evidence to found belief omits the essential ingredient of the charge. Whether this will be accepted in this country or the old formula will be preferred, however inaccurate, is of course an open question. This line of reasoning emphatically applies to all cases of inquiries on which it is proposed to contract. If converted into warranties, as they are when recited in the contract or referred to as a basis of contracting, no doubt the fact asserted must be literally true; but whether the answers are also truthful answers must depend on the intention of the speaker. They may seem to be evasiveespecially when the judgment is aided by competent counsel-but it is evident that must depend on the capacity of the speaker to comprehend the purport of the question, not on the capacity of a jury to see a meaning when aided by the trained dialectician.

No better illustration can be given than Huckman vs. Fernie, 3 M. and W. 505, 4 H. and H. 149, where the question was, "Who was the usual medical attendant of the life about to be insured?" That person had been attended for many years by a physician for a chronic disorder. Within a short time that physician had retired from practice and another was employed by the family, but who had seen the life insured only in reference to a matter of no moment. In reply the name of this gentleman was given. It is quite plain that to any one who comprehended the object

of the question this was absolutely false while literally true, and so it was held by the court in banc.

It may be, though, that all these distinctions are useless, because if there is a question for the jury it will always be answered in one way. There is no doubt about the fact that justice is very unfairly administered by juries if we mean justice according to law, and there can be no other standard in a court. But to a great extent the courts are themselves to blame for the miscarriage. If they would compel a categorical answer by the jury to the crucial question of fact, there would be much less probability of a false verdict. When juries are permitted to render a general verdict hypothetically based on their findings of certain facts, it is much more likely that what has been stated as a condition will be overlooked or disregarded; that when they are asked to say, “Did A believe that statement to be true, or did he intend to mislead?" it may be doubted whether this is not the only mode in which an ordinary jury can be used to advantage.

2. The medical profession is also intimately connected with the inquiry into the causes of death. They are necessarily experts in the proper inference to be drawn from facts ascertained after the event as to the condition of things before the death. Do these prove that the answers of the insured were false? Or wherever medical testimony as such can be pertinent to the issues raised in actions on policies, these necessarily include all things relating to the causes of death where they are relevant

to the issues.

These statements seem to be supported by authority:

(1) If there is a warranty or a contract that a fact is true and it is made a condition, the materiality is unimportant. A fortiori is the intention to deceive.

Anderson vs. Fitzgerald, 4 H. L. Cases, 484; Fowkes vs. Manchester, 3 B. and Sm. 917; Jones vs. Provincial, 3 C. B. N. S. 65; Wheeler vs. Hardesty, 8 Ellis and Bl. 332; McDonald vs. Law Union, 9 L. R. Q. B. 328.

(2) But where there is a mere representation or where the contractual representation is so qualified as to be evidently a mere representation, as where "believed" is inserted, then materiality and intentional deceit are essential.

Huckman vs. Fernie, 3 M. and W. 505; and 1 H. and Hurles, 149. It appears to be implied in Parke's, B., remark in Wainwright vs. Bland, 1 M. and W. 35; British Eg. vs. G. W. Ry., 38 L. J. Chan. 316; Duckertt vs. Williams, 4 Tyr. 242.

(3) That an evasion must have been known to be such where the statement is literally true. Maynard vs. Rhode, 1 C. and P. 360, where it is rested on the contract. Geach vs. Ingall, 14 M. and W. 93; Perrans vs. The Marine and General Travelers Insurance Co., 2 E. and E. 317; British vs. G. W. Ry., 38 Law Jour. Chan. 132, 314; General Prov. in re Damdriel, 18 W. R. 396; Fowkes vs. The Manchester, 3 Fost. and Fin. 440; 3 B. and Sm. 916. It seems to be plain that if incorrectness is in itself sufficient to avoid the contract, it is misleading to call attention to the effect of the contract on making the truth of the statement a basis of the contract, and therefore essential, or, in the language of pleading, a material averment.

(4) Where there is an ambiguity the paper is to be read against the company who prepares it. Anderson vs. Fitzgerald, 4 H. L. Cas. 484-507.