Maxson v. Llewelyn

Fraud—Circumstantial Evidence.—Fraud may In all cases be proved by circumstantial evidence; and in aid of the direct facts proved, legitimate inferences are permitted to be indulged to establish other facts not directly in evidence.

Id.—False Representations—Reasonable Ground for Belief.— Where a man makes a representation in the reasonable belief that it is true, fraud will not be imputed to him if it afterward be shown to be untrue; but there must be reasonable grounds for his belief, and if neither his belief of its truth, nor a reasonable ground for such belief, is made to appear, fraud in making the false representation may be inferred from circumstances indicating it.

Life Insurance—False Representations by Agent—Defense to Check for Premium—Sufficiency of Proof.—In an action by a managing agent of a life insurance company upon a check given for the first premium upon a policy of life insurance, which was defended on the ground of false representation, made by the special agent who secured the application, as to the favorable nature of the policy to be given, where no belief or reasonable ground for belief of the special agent in the truth of the representations was shown, and it appeared that the policy returned did not conform to the policy represented, and that it was highly improbable that an insurance company doing business legitimately would use such a policy as that represented, the circumstances are sufficient to justify the inference of the fraudulent character of the representations.

Id.—Application -in Writing—Parol Evidence of Fraud.—It appearing that the special agent prepared the application, and that its nature was not understood by the applicant, and was not readily understandable by one not versed in insurance matters, the fact that it was in writing, and that the policy conformed thereto, does not preclude parol evidence of false and fraudulent representations made by the special agent concerning the policy, and that the signature of the applicant was secured by misrepresentation and fraud sufficient to vitiate the transaction.

Id.—Check Payable to Special Agent—Ownership of Company-Action by Managing Agent—Support of Finding.—In an action by the managing agent personally upon a check drawn by the applicant in favor of the special agent for the amount of the first premium, payable four months after date, a finding that the plaintiff did not purchase the check for value before maturity, or at all, but took it as agent for the insurance company, which was its owner and holder, is supported by evidence that, upon delivery of the policy and its immediate return by the applicant, as not being according to the understood terms, the managing agent wrote to the applicant that the application and check when received by him “immediately became the property of the company, and could not be recalled.”