McKay v. New York Life Insurance

BRITT, C. In this cause the defendant demurred to plaintiff’s amended complaint for alleged want of facts to constitute a cause of action; the demurrer was sustained and judgment passed in defendant’s favor. It is in substance alleged in said complaint, among other things, that one Houser, an agent of the defendant insurance company, represented to plaintiff that in consideration of the payment by the latter of a specified annual premium, the company would issue to him a policy of life insurance in such form as to entitle him (among other benefits) to receive from defendant the sum of five thousand dollars in case he survived a period of ten years; that plaintiff believed such representations to be true, and in reliance thereon, and at the instance of said agent, made a written application to defendant for a policy; that the agent prepared such application and read it to plaintiff and assured him that it was properly drawn and “all right”; that plaintiff, induced by said statements and conduct of said agent, signed such application without reading it; that the agent then knew his said representations to be false and fraudulent; that plaintiff paid the first annual premium, and in due time received a policy from defendant which, upon [272]examination, lie discovered would entitle him upon the expiration of the ten-year period to receive the sum of two thousand five hundred and -twenty dollars only; that thereupon he returned the policy to defendant “and repudiated and rescinded the contract of insurance therein set forth.” He prays judgment for the amount of the first premium paid as aforesaid.

Among the stipulations contained in said application for a policy (a copy of which is annexed to the complaint as an exhibit) was the following: “Inasmuch as only the officers at the home office of the company in the city of New York have authority to determine whether or not a policy shall issue on any application, and as' they act on the written answers referred to, no statements, promises, or information made or given by or to the person soliciting or taking this application for a policy .... shall be binding on the company or in any manner -affect its rights, unless such statements, promises, or information be reduced to writing and he presented to the officers of the company, at the home office, in this application.” Plaintiff does not claim that the policy issued to him was not such a policy as was required by the ter-ms of said written application.

Defendant contends: 1. That the averments of the complaint are insufficient to make a case of fraud on the part of Mouser, the agent. We- are disposed to concede that as against a demurrer for uncertainty the complaint could not stand; but the demurrer is general, merely that the complaint does not state facts sufficient to constitute a cause of action, and this objection, it has often been held, cannot prevail when the essential facts substantially appear, although some of them are stated defectively. (See Santa Barbara v. Eldred, 108 Cal. 294.) The particular of the complaint concerning which we have -had most doubt is whether it shows that plaintiff did not, without his own fault, understand the terms and effect of the application signed by him. The paper, however, was itself such that its full import would not be understood readily by one not expert in matters of insurance; it is shown by the application that plaintiffs business is unconnected with such matters, and it seems probable that if he had employed his entire available time in perusing the document from the date of his signature thereto until the present, he could scarcely have as-'