
    Isabella Dougherty, Respondent, v. Metropolitan Life Insurance Company, Appellant.
    
      Insurance — retention of policy and proofs of loss —• a waiver of the condition that suit be brought within six months — a breach of the warranties in an application is an affirmative defense — interested witness — amendment of a complaint to allow a recovery of premiums paid.
    
    In an action brought to recover the amount of a policy of life insurance, the proof upon the part of the plaintiff tended to show that shortly after the death of the insured the beneficiary procured a blank for the proofs of death; that an agent of the defendant took this, together with the policies and papers, promising to fill them out and present them to the defendant; that the defendant retained the proofs of loss and other papers for more than six months before it returned them or rejected the claim. The policy provided that no suit should be commenced upon it before the lapse of ten days after filing proofs of death, nor should any action" be maintained after six months from the date of the death of the insured.
    
      Held, that if the jury found that the defendant retained the plaintiff’s papers it amounted to a waiver of the six months’ limitation.
    
      The defendant claimed that the testimony of one Siegrist, an agent of the defendant, was uncontradicted as to the fact that he notified the plaintiff of the rejection of her claims about a month after the insured died.
    
      Held, that, assuming that the testimony of Siegrist was true, his notification to the plaintiff that her claim was rejected, taken in connection with the retention-by the company of all the papers which were essential to enable the plaintiff to prepare her complaint, could not set in operation the six months’ limitation ;■
    That as Siegrist was an agent of the defendant his credibility was a question forthejury.
    The complaint set forth a" cause of action based upon the policy to which the defendant did not demur nor by its answer deny that the policy was issued, but alleged for a separate defense that the application also constituted a part of the contract and specifically alleged a breach of the warranties contained in the application;
    
      Held, that the court did not err in permitting the plaintiff to introduce the policy in evidence, against the defendants’ objection, without also introducing the application which by the policy was made a part of it;
    That the issue raised was a breach of warranty constituting an- affirmative defense.
    The complaint also set forth a second policy of insurance which the proof showed did not create any contract between the parties, but upon which the premiums had been paid by the plaintiff and were retained by the defendant.
    
      Held, that, as no contract ever existed relative, to the second policy, it was clearly unconscionable for the defendant to retain the premiums on that policy;
    That if it were necessary the conyplaint. could now be amended so that the plaintiff might recover.in this action the premiums paid on the second policy; That as there was no recovery by the defendant upon the second policy it was not entitled to costs.
    Appeal by the defendant, the Metropolitan Life Insurance Company, from a judgment of. the Supreme Court in favor 'of the plaintiff, entered in the office of the clerk of the county of Richmond. on the 1st day of October, 1895, as amended by an order entered in said clerk’s office on the 21st day of October, 1895, upon the verdict, of a jury rendered after a trial at the Richmond Circuit; also from an order entered in said clerk’s office on the 8th day of October, 1895, denying the defendant’s motion for a new trial made upon the minutes, and also from so much of an order made at the Kings County Special Term, and entered in the office of the clerk of the county of Richmond on the 21st day of October, 1895, as denies that part of defendant’s motion which asked for an order amending the judgment herein and denies defendant’s motion for a direction that the clerk tax a hill of costs in its favor.
    
      This action was brought by the plaintiff, as the beneficiary named therein, to recover upon two policies of insurance issued by the defendant upon the life of one Francis Farley, the brother of the plaintiff.
    
      Frederick B. Campbell, for the appellant.
    
      W. J. Powers, for the respondent.
   Hatch, J.:

Plaintiff is the sister of Francis Farley, deceased. Prior to his death, and on September 28, 1891, she procured Farley’s life to be insured for her benefit, with defendant. Subsequently, and on the' 18th day of April, 1893, she applied for a further insurance upon Farley’s life. The application was accepted, the policy issued and delivered June 19, 1893. Plaintiff has paid premiums upon both policies as required by defendant since their issuance. By the terms of the policy the insured was required to be in sound health at the time of delivery, else it would not take effect. There was no claim that any defect existed' in the first policy. As to the second, it appeared that Farley was not in sound health when the policy was delivered, and the court, upon the trial, dismissed the complaint as to it, but held that plaintiff was entitled to recover the premiums paid thereon. Farley died July 22, 1893.

The proof upon the part of plaintiff tended to establish that shortly after his death plaintiff procured a blank upon which to fill out proofs of loss, and that an agent of defendant took the same, together with the policies and papers, promising to fill out and present the same to defendant. By the terms of the policy no suit could be commenced against the company before the lapse of ten days after filing in the home office of the company proofs of death upon the forms furnished by it, nor can an action be maintained against defendant after six months from the date of death of the insured. The action was not begun within this time. But plaintiff gave evidence to establish that defendant retained the proofs of loss and her other papers until after the six months had expired before they returned them to her or rejected her claim. Defendant denied this, claiming that it had rejected the claim, notified plaintiff of its rejection, and returned her papers within the six months. Upon this testimony the court submitted the question to the jury whether defendant retained possession of the papers as claimed by plaintiff, and if so, did such act upon their part amount to a waiver of this provision of the policy, charging that both facts must be found in plaintiff’s favor before she was entitled to recover. The evidence warranted the submission, and ' the form of it was unexceptionable. The jury found in favor of plaintiff, and, unless some error, occurred upon the trial, the judgment appealed from must be affirmed. . ■ .

It is claimed that the testimony of Siegrist, defendant’s agent, is' uncontradicted that he notified plaintiff of the rejection of the claim by the company as early as August 1Y, 1893. If this be true, it does not work the result claimed by defendant. It still retained possession of her policy and papers. It might well be that they rejected the claim, but it would not follow from that, as a conclusive ■proposition, that it intended to insist upon its short Statute of Limitation. Plaintiff was in no position to bring her action until she was possessed of the policy and papers; they were essential in order to prepare her complaint. It would be most reprehensible for defendant to withhold her papers, the evidence of her right to prosecute an action, and then insist that she had notice of the rejection of the claim and was absolutely concluded thereby, unless she acted before the' end of the six months. Good faith required that her papers be returned as soon as defendant had acted thereon. Returning the policies after this event, and then insisting upon this short Statute of Limitations, ought not to receive favor at the hands of the court. It has too much the ear marks of an intention to create a condition where the limitation may be availed of.

Siegrist was the active agent of the defendant in this transaction, and consequently an interested witness; his credibility was the subject of scrutiny by the jury. (Joy v. Diefendorf, 130 N. Y. 6.) Besides, his testimony was contradicted in other essential respects, and the jury would have the right to reject his evidence entirely.

The action was for the money due upon the policies, and demanded a money judgment. The proof showed that no contract had ever existed as to the second policy, that premiums had been paid thereon, and their amount, which were retained by the defendant. The transaction was set out in the complaint, and it was clearly unconsciona- • able for the defendant to retain these moneys under the circumstances proved. It was in no sense misled, and if it were essential, the complaint could now be deemed amended to sustain the recovery-in this regard. As there was no recovery by defendant upon the second cause of action stated in the complaint,, it was not entitled to costs. (Cooper v. Jolly, 30 Hun, 224; Burns v. D., L. & W. R. R. Co., 135 N. Y. 268.)

It is' insisted that the court committed an error in permitting plaintiff to introduce the policy over defendant’s objection, without also introducing the application which by the policy was made a part of the same. In support of this contention plaintiff relies upon the case of Lycoming Fire Ins. Co. v. Storrs (97 Penn. St. 354).

The ruling in that case supports the contention. But the doctrine is without application to the present case, if it be regarded as the rule, which is doubtful in this State. The complaint alleged a cause of action upon the policy, and that alone, as constituting the contract between the parties. The defendant did not demur to the complaint or otherwise indicate that plaintiff had not stated a good cause of action. By its answer it admitted, by not denying, the issuance of the policy. And for a separate defense it alleged that the application constituted a part of the contract, and specifically alleged a breach of the warranties therein contained. This pleading, therefore, raised as the issue the breach of warranty. It was an affirmative defense, and defendant was bound to establish it to the satisfaction of the jury. (Spencer v. C. M. L. Ins. Assn., 142 N. Y. 505.)

Under the issues as framed by the parties, plaintiff was not required to do more than she did to establish her cause of action. (Travelers’ Ins. Co. v. Sheppard, 85 Ga. 751.)

It, therefore, follows that no error was committed in this regard, and the judgment and orders appealed from should be affirmed,, with costs.

All concurred, except Cullen, J., not sitting.

Judgment and orders affirmed, with costs.  