On appeal from the Supreme Court.
For the appellant, John C. Stockel and Edward I. Gaulkin.
For the respondent, David T. Wilentz.
The opinion of the court was delivered by
HETFIELD, J. This is an appeal by the defendant below from a judgment rendered in the Supreme Court, Middlesex
Circuit, on a jury verdict for $1,100. Plaintiff was the beneficiary designated in an insurance policy dated July 28th, 1932, on the life of one Menyhert Battyanyi, issued by the defendant which was a fraternal beneficiary association. The insurance contract was solicited by Eugene Toffler and Louis B. Nagy, the former being the district agent for the defendant, and the latter president of the local lodge. The application for insurance was prepared in the presence of the insured, the beneficiary, Toffler and Nagy, at the home of the beneficiary, where the insured lived at the time, and all answers to the questions contained therein were inserted by Toffler. The insured signed the application by making his mark, and it provided that in the event of death, the insurance be paid to "Mary Papp," setting forth that her relationship to the insured was that of "cousin." It is admitted that the beneficiary was in no way related to the insured. After the death of the insured, which occurred April 21st, 1933, the beneficiary filed a proof of claim, which the insurer refused to honor by reason of the fraudulent misrepresentations made in the application, and it forwarded a check for $40 to the beneficiary, representing premiums paid on the policy during the insured's lifetime, which she refused to accept.
It appears that section 173 of the general laws of the order provided, in substance, that the person designated as the beneficiary in any insurance policy shall in every instance be one or more members of the family of the insured, or some person or persons related to or dependent upon such insured, or be an affianced wife or husband. It is not contended that the beneficiary came within any of these classifications.
The main issue litigated in the trial was the question of fraudulent misrepresentation made by the insured with respect to his relationship to the beneficiary.
The plaintiff testified that when the application was being prepared, the question of relationship was not mentioned; that the word "cousin" was inserted without the knowledge of either the insured or herself; that when the policy was delivered they noticed, for the first time, that she was referred to as a cousin of the insured, and Toffler and Nagy were then informed that no such relationship existed. She further testified: "Mr. Toffler and Mr. Nagy said we shouldn't worry about it. That is nothing. They could put that in there."
Toffler and Nagy both testified that all information contained in the application was supplied by the insured, in the presence of the beneficiary, and that neither of them was ever informed that the relationship, as set forth in the application and policy, was not the fact. It appears, however, that within a few days after the policy had been delivered, the insured executed a will, which was prepared in Nagy's office, and witnessed by him and Toffler, wherein he bequeathed to the plaintiff the entire proceeds of the policy now involved.
When the motion of the defendant to direct a verdict in its favor was denied, the trial court stated, in part: "I think a fact question has been raised as to whether or not such representations were made, or whether or not there was knowledge on behalf of the agents of the defendant of the conditions, as far as the relationship is concerned, existed, and I think that under Howard v. Commonwealth Beneficial Association, 98 N.J.L. 267, raises a fact question for the jury, as to whether or not this is so. For that reason, believing that a fact question exists, the motion to direct a verdict will be denied, with an exception to the defendant upon all of the reasons advanced by the defendant's counsel."
An examination of the insurance contract leads us to conclude that the defendant was entitled to a direction of a verdict, irrespective of the fact that there might have been sufficient evidence to warrant a finding that Toffler and Nagy had ...