
    Asa Cummings v. Connecticut General Life Insurance Co.
    November Term, 1929.
    Present: Watson, C. J., Powebs, Slack, Moulton, and Wnxcox, JJ.
    Opinion filed January 14, 1930.
    
      
      Shields & Conant for the plaintiff.
    
      
      Searles, Graves <& Waterman for the defendant.
   Powers, J.

We have here the record of a retrial of Cummings v. Connecticut General Life Ins. Co., 101 Vt. 73, 142 Atl. 82. The retrial was by jury, and was on amended pleadings. It resulted in a verdict for the plaintiff for the amount of the quarterly premium received by the defendant, with some interest and costs, amounting in all to $24.02, which sum the defendant conceded was due the plaintiff, and had paid ihto court, Judgment was rendered on the verdict for the plaintiff, and he excepted.

The pláintiff was a witness in his own behalf, and in cross-examination he testified that he and his wife had made previous applications for life insurance, and he was asked this question: “Q. And up to that time neither of you had paid the first premium, had you?” Objection was interposed and overruled. The witness answered, “No.” Thereupon an exception was claimed and allowed. But there is nothing in the record to indicate that the exception was treated .below as seasonably claimed, so, the answer being responsive, we can do nothing but apply the ordinary rule and hold that the exception is unavailing. Ford v. Hersey, 92 Vt. 405, 412, 104 Atl. 875; Reeves v. Redmond, 95 Vt. 106, 109, 113 Atl. 711.

One of the defenses made by tbe defendant, and one now covered by the amended pleadings, was tbat the quarterly premium above referred to did not reach tbe defendant during tbe life of tbe insured. Tbe evidence of tbe defendant tended strongly to establish tbat fact. By divers exceptions and in various ways the plaintiff raised tbe question tbat tbe defendant, by its conduct and assertions, bad waived tbat forfeiture, if it bad occurred.

It appeared tbat tbe defendant wrote a letter to tbe plaintiff and somewhat later another to bis counsel. In tbe former, tbe defendant took tbe position that tbe policy was obtained by certain false representatives regarding the health of tbe applicant, and asserted tbat if the true facts bad been known, tbe company would have declined tbe risk. “We have no Option now,” says tbe letter, “but to return to you all premiums paid with interest thereon, as this insurance was issued upon a misrepresentation of tbe facts and was ineffective from its inception.” Nothing is said in tbe letter about tbe failure of tbe premium to reach tbe company while Mrs. Cumm.ings was yet alive or any defense to tbe policy other than tbe false representations referred to above. In tbe letter to tbe plaintiff’s counsel, tbe defendant insists tbat Mrs. Cummings’ application contained material misrepresentations with regard to her physical condition and past history, and concludes with this statement: “We have no option but to maintain our previous position, which is to tbe effect tbat this insurance was never effective.” This letter, too, is silent as to the defense now under discussion.

Tbe defendant insists tbat these letters assert two grounds for its refusal to pay tbe policy in question: (1) False representations; and (2) tbe policy was never effective. And it argues tbat by this construction, tbe new defense is saved to it, whatever tbe result might otherwise be. But tbe true meaning of the letters seems too plain to admit of this construction. What tbe defendant means by tbe language used in tbe letters is tbat tbe policy never became effective because of tbe false representations in tbe application. If confirmation of this state- ■ ment was required, it would be found in Deft’s Exhibit E, which is tbe record card of this policy from tbe office of tbe general agent of the company, whereon this notation appears: “Not settled because of misstatement at time app. (application) was written. ’ ’

The defendant argues that a waiver of a defense in order to be effective must embrace all of the elements of an equitable estoppel, and cites cases so holding. But that is not the law of this State. In Webster v. State Mutual Fire Ins. Co., 81 Vt. 75, 80, 69 Atl. 319, this Court took occasion to draw the distinction between a waiArer and an estoppel as it exists in insurance laAV, and to lay doAvn the rule that, when an insurer elects not to take advantage of a forfeiture, he waives it, and cannot assert it in defense, though the insured was not misled to his prejudice. Such a waiver may be express or implied, before or after the forfeiture. Bates v. German Commercial Acc. Co., 87 Vt. 128, 130, 88 Atl. 532, Ann. Cas. 1916C, 447. An insurance company which thus waives a forfeiture is bound to treat the contract of insurance as though no forfeiture had occurred. Francis v. London Guaranty & Acc. Co., 100 Vt. 425, 430, 138 Atl. 780, 782.

In Frost v. North British & Mercantile Ins. Co., 77 Vt. 407, 418, 60 Atl. 803, it was held that a denial of liability on a specified ground unconnected with the proof of loss, made within the time such proof was required, is a waiver of that proof. To the same effect are Mellen v. U. S. Health & Acc. Ins. Co., 83 Vt. 242, 248, 75 Atl. 273, and Clarke v. Travelers’ Ins. Co., 94 Vt. 383, 391, 111 Atl. 449. The rule as stated in these cases and other earlier ones therein cited carried the Court as far as it was necessary to go in order to dispose of the questions there presented. But the Webster Case, the Bates Case, and the Francis Case show that the waivers would have been just as effective if they had followed the forfeitures. The logic of those cases requires us to take the broad ground that, when one defense is specified by an insurer as its reason for refusing to pay a loss, all others are waived.

This doctrine finds support in many cases of which the following are accessible: Security Ins. Co. v. Laird, 182 Ala. 121, 62 So. 182, 184; Travelers’ Ins. Co. v. Plaster, 210 Ala. 607, 98 So. 909, 910; Watts v. Metropolitan Life Ins. Co., 211 Ala. 404, 100 So. 812, 813; London & Lancashire Ins. Co. v. McWilliams, 218 Ala. 503, 119 So. 15, 16; Powers v. Bohuslav, 84 Neb. 179, 120 N. W. 942, 944; Hilmer v. Western Travelers’ Acc. Assn., 86 Neb. 285, 125 N. W. 535, 537, 27 L. R. A. (N. S.) 319; Yates v. New England Mutual Life Ins. Co. (Neb.), 220 N. W. 285, 287; Smith v. German Ins. Co., 107 Mich. 270, 65 N. W. 236, 30 L. R. A. 368, 372; Smith v. Grange Mutual Fire Ins. Co., 234 Mich. 119, 208 N. W. 145, 146; Wyatt v. Henderson, 31 Ore. 48, 48 Pac. 790; Eaid v. National Casualty Co., 122 Ore. 547, 548, 259 Pac. 902. See,, also, McCormick v. Royal Ins. Co., 163 Pa. 184, 29 Atl. 747, 750; Western, etc., Pipe Lines v. Home Ins. Co., 145 Pa. 346, 22 Atl. 665, 27 A. S. R. 703, 708; Brink v. Insurance Co., 80 N. Y. 108; Vulcan Ins. Co. v. Johnson, 74 Ind. App. 62, 128 N. E. 664, 665; Travelers’ Ins. Co. v. Fletcher Am. Natl. Bank, 84 Ind. App. 563, 150 N. E. 825, 827; Snyder v. Supreme Ruler of the Fraternal Circle, 122 Tenn. 248, 122 S. W. 981, 45 L. R. A. (N. S.) 209, 214; Royal Ins. Co. v. Drury, 150 Md. 211, 132 Atl. 635, 643, 45 A. L. R. 582.

It is to be noted tbat some of tbe cases say in effect tbat tbe waiver estops tbe insurer. But, as was suggested in tbe "Webster Case, tbe terms “waiver” and “estoppel” are often used as meaning the same thing. In some cases cited, tbe word “estops” is so used, and is not to be given its technical meaning. In others, tbe court finds tbe element of prejudice to tbe insured in tbe fact tbat he has brought suit relying upon tbe expressed or indicated attitude of tbe company toward bis claim.

Tbe Supreme Court of tbe United States, as do one or two of the state courts, extends tbe application of this rule to cases other than insurance cases, saying tbat “where a party gives a reason for bis conduct and decision touching anything involved in a controversy, be cannot, after litigation has begun, change bis ground, and put bis conduct upon another and different consideration. He is not permitted thus to mend bis bold. He is estopped from doing it by a settled principle of law.” Ohio & Miss. Ry. Co. v. McCarthy, 96 U. S. 258, 267, 24 L. ed. 693, 696.

Tbe rule works no hardship on the insurer. Considerations of public policy require tbat be shall deal with bis individual customer with entire frankness. He may refuse to pay and say nothing as to tbe basis of bis refusal. In tbat case, all defenses to an action on tbe policy are available to him. He may refuse to pay on a particular ground reserving tbe right to defend on other grounds, with tbe same result. But, when he deliberately puts bis refusal to pay on a specified ground, and says no more, be should not be allowed to “mend bis bold” by asserting other defenses after the insured has taken him at his word and is attempting to enforce his liability.

It is not suggested that this defendant acted in ignorance of the facts. Nor could such a suggestion be accepted, for all the facts were .in its possession in written or printed form.

Waiver is usually a question of fact, since the question most always depends on acts or declarations of an indecisive and doubtful character. Wells, Law & Fact, § 124. But, where all the facts and circumstances are undisputed, the question is for the court. Wells, § 250; 27 R. C. L. 912. The case in hand is of the latter class, and there is nothing to do but say as we did in the Francis Case that the facts and circumstances are ‘1 so inconsistent with the purpose to assert the forfeiture and so convincing of an intent to waive it, that.it must be held to amount to a waiver as matter of law.

This disposition of the matter makes it unnecessary to consider the effect of the so-called temporary receipt, Plff’s. Exhibit 2. The plaintiff by one of his requests to charge (No. 2) asked for an instruction to the effect that the letters referred to, "and its (defendant’s) further conduct in failing to raise such issue (the issue that the policy did not become effective on account of non-payment of the premium during the life of the insured) by its pleadings in the previous case” amounted to a waiver, etc. This request was not complied with, and the plaintiff excepted. The request was defective in that it included an unsound provision. The defendant’s conduct in failing to raise the issue at the former trial had no effect on the waiver. Nothing herein said is to be taken as precluding the defendant from availing itself in a subsequent trial of any defense which it had not waived prior to the bringing of a suit on the policy. There was no error in this connection. Vaughan v. Porter, 16 Vt. 266.

There was no error in the exclusion of the testimony of Frank Burr regarding the plaintiff’s health. That question was not before the court. The physical condition of Mrs. Cummings was involved, and could be shown. But the reason why she worked out of doors was of no importance. It was too remotely relevant to the condition of Mrs. Cummings’ physical condition to make its exclusion error. In re Claflin’s Will, 75 Yt. 19, 22, 5% Atl. 1053, 58 L. R. A. 261.

During- the cross-examination of the plaintiff, he was inquired of regarding his telling his children how to testify in the case. And he denied that he ever told them what to say. Thereupon, he was asked if at the former trial he did not, from his place within the bar, attempt to instruct his daughter, Myrtie, as to how to testify. He denied it. For the purpose of impeachment, the defendant offered certain questions, answers, and comments of the presiding judge as shown by the transcript of the testimony in that trial. This was objected to on the ground that it was irrelevant, but not on the ground that- it was incompetent. It was received and the plaintiff excepted. So much of the transcript as was admitted reads as follows: “ Q. The other day after some one had been testifying here, wasn’t your father telling you right down there on the first landing to the stairs that you had -got to deny that when you took the stand? A. I don’t remember that he did. Q. Don’t you remember that he stood right down there and he was doing like this (indicating) and telling you that you had got to deny that when you took the stand? Q. Don’t you remember that, Miss Cummings? The court: If you do that again, sir, the court will deal with you; and the court is referring to the shaking of the head of the plaintiff toward the witness. ’ ’

At that trial, the plaintiff did not deny the fact charged against him by the court; but at the trial under review, he explained the matter by testifying that he did move his head, but not at the witness.

The credibility of a witness is always open to attack, and a wide latitude is allowable to a cross-examiner for the purpose of showing who and what the witness is. State v. Slack, 69 Vt. 486, 493, 38 Atl. 311; Shores v. Simanlon, 99 Vt. 191, 196, 130 Atl. 697. It is a matter lying largely in the discretion of the trial court — as we have often held. The plaintiff insists that his evidence involved a collateral matter on which the witness could not be impeached. It is true that such matters may not be gone into for the mere purpose of eliciting something to contradict. But collateral matters may be within the discretion of the court. Hambleton v. U. Aja Granite Co., 95 Vt. 295, 299, 115 Atl. 102. If this plaintiff, at the former trial, coached his witness or attempted to do so, by' signals indicating what answer he desired her to give, it was a flagrant impropriety wholly inconsistent with honesty and good faith. His act would be of the same character and effect as if he had instructed or attempted to instruct the witness before she took the stand. It would amount to an implied admission against him (1 Elliott, Ev. § 226; Com v. Min Sing, 202 Mass. 121, 88 N. E. 918, 919), and would be evidence of his unreliability as a witness.

But the question before us is one of an admission. The fact that the plaintiff thus attempted to coach the witness could not be proved by the transcript, alone. So far as this trial is concerned, it showed an 'Unsworn statement of the presiding judge, which would be hearsay. Its probative value, if it has any, lies in the fact that it was undenied by the plaintiff. Its admissibility, then, depends upon the question whether the plaintiff was obliged to deny it to avoid the implication that he admitted that it spoke the truth. If the occasion was such that he was not called upon to deny the accusation therein, the transcript and his silence were irrelevant. Lawson, Presumpt. Ev. 632. In very many cases silence amounts to an admission. But to have this effect, the circumstances must be such as to call for or admit of some reply by way of denial or explanation. It is in such cases only that “silence gives consent.” So it is that, generally speaking, silence at a judicial proceeding cannot be treated as assent. 2 Wig. Ev. § 1072. This question has usually arisen in criminal cases wherein a witness has made some incriminating statement which the respondent does not deny, like Com. v. Zorambo, 205 Pa. 109, 54 Atl. 716, 717, and Com. v. Kenney, 12 Metc. (Mass.) 235, 46 A. D. 672. But Hauser v. Goodstein, 76 N. J. Law, 66, 66 Atl. 932, was a civil case, as was Buchanan v. Morris, 198 Ind. 79, 151 N. E. 385, 389. In these cases it was held that the doctrine of acquiescence did not apply to silence at judicial proceedings. -Chief Justice Shaw, in Com. v. Kenney, supra, laid down the rule to this effect: If the statement is made by a witness during judicial proceedings, the party sought to be charged with assent to it cannot interfere and deny it, since that would be to charge the witness with perjury, and be alike inconsistent with decorum and the rules of law. The last clause of this statement is no longer applicable, because a -party may now be a witness, but could not be at the time that opinion was written, as was pointed put in Blanchard v. Hodgkins, 62 Me. 119, 121.

This Court has recognized this rule. It was said by Judge Peck in State v. Gilbert, 36 Vt. 145, that “what is stated in the presence and hearing of a party under circumstances calling for a reply, is sometimes admissible against the party if not contradicted by him. But this is not true as applicable to testimony against a party in the course of judicial proceedings, especially in a case where the party cannot testify the occasion not being one that calls for a reply or contradiction, and hence there is no implied admission arising from the silence of the party.”

The situation of the plaintiff at the time the court rebuked him was such that an immediate denial was not to be expected. It would have been “inconsistent with decorum.” Not only would it have interrupted the orderly progress of the trial, it would have involved the plaintiff in a dispute with the court, and would or might have seriously prejudiced his case before the jury. He was not then in a position properly to do more than he did do, and therefore no admission was then involved in his silence.

But subsequently in that trial, this plaintiff was a witness for himself, and his failure to improve that opportunity to deny or explain the charge made by the court is as significant as if an opportunity for immediate denial was offered and declined. 2 Chamb. Bv. § 1431; 2 Jones, Ev. § 290; Blanchard v. Hodgkins, supra; Harlow v. Perry, 114 Me. 460, 96 Atl. 775, 777, Ann. Cas. 1918C, 37.

This is the logical result, though it is held otherwise in some jurisdictions. Thus in Blackwell D. T. Co. v. McElwee, 96 N. C. 71, 1 S. E. 676, 60 A. R. 404, it is held that the rule did not apply though the party afterwards took the stand as a witness; but Professor Wigmore says that on this point the case is wrong. 2 Wig. Ev. (2nd ed.) § 1072, note 11.

There was no error in admitting this evidence.

Subject to exception, defendant’s counsel said in argument, “This plaintiff, Asa Cummings, instead of going to a doctor whom they knew, went to a stranger.” This referred to Dr. Weymouth, who examined Mrs. Cummings at the time she made her application, and the inference which the jury was expected to draw from it was that the plaintiff sought out this doctor for some fraudulent purpose. There was evidence tending to show that Dr. Weymouth was selected to make the examination by the defendant’s agent, Shores. If that had been all the evidence on that subject, the argument would have been improper. But there was more to it. The testimony of Dr. Allen tended to show that Dr. Weymouth was selected because the plaintiff thought that he would be more likely to “pass” Mrs. Cummings than some other doctor. We cannot say that the argument was unwarranted.

The argument wherein suggestion was made that Mrs. Cummings took heart tablets just before her examination was improper and should have been omitted. The only basis found in the evidence for it was the fact that she had such tablets, and that she gave false answers in her application. This gave rise to nothing more than a surmise that she may have thus deceived Dr. Weymouth. The argument regarding her brother’s varicose ulcer was too unimportant to have been harmful.

The plaintiff seasonably requested the court to charge the jury to the effect that the plaintiff was under no obligation to inform the defendant of the change in his wife’s physical condition unless he knew that he was the beneficiary named in the policy. This request was refused, and the plaintiff excepted.

This instruction should have been given. The company’s defense was based in part on the plaintiff’s concealment of the fact referred to. Concealment of the character to avail an insurance company as a defense, is defined to be “a designed and intentional withholding of any fact material to the risk, which the assured ought in honesty and good faith to communicate.” Mascott v. First Nat. F. Ins. Co., 69 Vt. 116, 125, 37 Atl. 255, 258. There is no doubt that when a material change for the worse in the health of the applicant takes place after the making of the application and medical examination and before the policy becomes effective, it is the duty of the applicant to disclose it, if he knows about it. Fitzgerald v. Metropolitan Life Ins. Co., 90 Vt. 291, 300, 98 Atl. 498; Cummings v. Conn. Gen. Life Ins. Co., 101 Vt. 73, 89, 142 Atl. 82. Knowledge lies at the very foundation of the duty. Livinggood v. N. Y. Life Ins. Co., 287 Pa. 128, 134 Atl. 474, 476. Such is the law when the concealment of the insured is relied upon. But here the defendant relies upon the concealment of this plaintiff, the beneficiary. No doubt the law above stated applies to him, if he was in duty bound to speak. But a stranger to the policy would be under no obligation to report to the company, nor would his silence stand in his way if it should turn out eventually that he sought some benefit from the policy. If a beneficiary named in the policy is ignorant of his relation to it, he is under no obligation to tell what he knows. Knowledge of that fact is an essential element of a defense predicated upon his silence. He was the agent of the insured, to be sure, in forwarding the premium, but this fact, alone, did not impose upon him the duty of disclosing a matter having nothing to do with his agency.

There was no question for the jury regarding the effect which the so-called “flu” had on Mrs. Cummings’ health. By all the evidence, it was a temporary ailment, not serious in character, which did not affect her general health, and the court should have so instructed the jury.

Judgment reversed, and cause remanded.  