Bailey, J.
It is manifest from the character of the verdict in this case, that the jury intended to award the plaintiff the full amount of the premiums paid by him on all the policies of insurance issued to him by the defendant, together with interest thereon, and the question arises whether such verdict is sustained by the evidence.
The general rule of law applicable to the right of the assured to a return of premiums paid is, that where neither party is chargeable with fraud, and the contract is not against law or good morals, the assured may, in the absence of express stipulations on the subject, recover back his premiums where the risk has not been commenced, or where the contract is void ab initio. But where the risk is entire, and has once commenced to run, though it be for ever so short a period, there can be no apportionment or return of the premium.
In cases of fraud, it has always been held that the premium must be returned whenever the policy is rendered void by reason of the fraud of the insurer. Thus, for example, where the insurance was made on a certain voyage “ lost or not lost,” when the insurer, at the time he entered into the contract, privately knew that the ship was arrived safe, he was held to be bound to restore the premium. Carter v. Boehm, 3 Burr. 1909. At one time, however, the decisions of the English courts were somewhat fluctuating as to whether the assured was or was not entitled to a return of premium, where the contract was rendered void ab initio by his own fraud. It was contended that, as the insurer received the premium in consideration of his taking upon him self the risk mentioned in tlie policy he could have no right to retain it, if no risk was run; and however improperly or unfairly the assured may have conducted himself, that would not furnish a new consideration to the insurer to be substituted in place of that expressed in the policy, so as to enable him to retain the premium. Wittenham v. Thornbrough, 2 Vern. 206; De Costa v. Scanderet, 2 P. Wms. 170; Wilson v. Ducket, 3 Burr. 1361. But the impolicy as well as the injustice of this view was pointed out by Lord Mansfield, in a case tried before him in 1785, and not long afterwards the contrary doctrine was settled by the court of King’s Bench. Tyler v. Horne, cited in Park on Ins. 218; Chapman v. Kennett, Id. The rule thus established by the King’s Bench, has ever since that time prevailed in England, and has been adopted without any material dissent in this country. Freismuth v. Agawam Hut. Fire Ins. Co. 10 Cush. 587. It is, that where a policy is void by reason of fraudulent misrepresentations or concealments on the part of the assured, the premiums can not be recovered back.
For a full discussion of the foregoing principles, the following authorities may be consulted: 2 Marsh. on Ins. Chap. 16; 2 Arnould on Ins. Chap. 11; Park on Ins. 215; Hughes on Ins. Chap. 16; Ellis on Fire and Life Ins. 24, 153; May on Ins. Sec. 567; 2 Phillips on Ins. Chap. 22; Bliss on Life Ins. Sec. 423; Flanders on Ins. 154.
Of the policies of insurance in question in this case, the first three were issued on an application which represented the plaintiff as being in good health, except that in the certificate of the medical examiner it appeared that he was then afflicted with hemorrhoids. So far, then, as that particular disorder was concerned, there was no misrepresentation or concealment, and the policies were issued with full knowledge of the condition of his health in that respect. The only evidence in the record as to his health at that time, apart from the application itself, and the ‘plaintiff’s mere statement in his testimony, that he was in poor health, is to be found in his letter of October 16, 1874, offered in evidence by the defendant; and it is difficult to see that the letter, so far as it applies to that period, discloses any sickness or disease beyond a severe attack of hemorrhoids. It is furthermore asserted in the letter, that when the application was made, the plaintiff gave to Talbott, the defendant’s agent, a correct statement of his condition, and told him that he did not believe that in his situation any company would insure him; and it also appears, at least inferen tially, thatTalbott, after recovering such information, drew up the application, and the plaintiff, supposing he had correctly stated the facts as disclosed to him, signed the application without reading it.
It thus appears that these three policies were valid, and not subject to avoidance by reason of any misrepresentation or concealment on the part of the plaintiff. The only disease from which the plaintiff was then suffering was disclosed in the application; or even if the plaintiff’s letter should warrant a different conclusion, it appears that the condition of his health was fully disclosed to the company’s agent, who was trusted to draw up the application, and who drew it up without inserting all the facts communicated to him by the plaintiff. A policy of insurance can not be avoided by the insurer on the ground of facts which were known to the agent who made the survey and filled up the application, and omitted to insert them therein. Atlantic Ins. Co. v. Wright, 22 Ill. 463; see, also, Commercial Ins. Co. v. Spankneble, 52 Id. 53; Lycoming Ins. Co. v. Barringer, 73 Id. 230; Reaper City Ins Co. v. Jones, 62 Id. 458.
The facts in relation to the §10,000 policy are essentially different. That policy was taken out something more than seven years after the date of the first application, and it does not appear that at that time the plaintiff made any disclosures in relation to his health, save what are embodied in the application then made. In that, his health is represented as good in every respect. The existence of each of the. diseases as to which inquiry is made is specifically denied, and to the question whether, during the preceding seven years, he had been afflicted with any severe sickness or disease, he answered, “had piles from ’65 to ’69—that is all.” That these representations were untrue, and that he was not only still suffering from hemorrhoids, but also from a complication of other disorders which were likely to shorten the period of his life, is abundantly shown by his letter. The statements of the letter stand entirely uncontradicted and unexplained, and no attempt appears to have been made to show by evidence what is claimed in argument, that they were untrue in fact,.and only the creation of the plaintiff’s morbid imagination.
Nor can it be held that the disclosures made to Talbott in 1866, were notice to the defendant of the condition of the plaintiff’s health in 1874. The interval, it may be presumed, was sufficient for the eradication of all curable diseases, and the plaintiff’s application made in 1874, represented in effect that he had recovered from the disease under which he was suffering at the date of his former policies.
It can not be doubted, we think, that the defendant’s refusal to accept the premium on the $10,000 policy when due, and its instruction to its agent to receive no morp premiums thereon, was an avoidance of the policy, so far as the defendant had any right or power to avoid it, and the plaintiffs right to recover back the premiums paid, depends upon whether such avoidance was wrongful. McKee v. Phoenix Ins. Co. 28 Mo. 383. If no proper ground for such avoidance existed, then the plaintiff was at liberty to treat the contract as at an end, and recover back all the money paid under it.
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Bailey, J.
It is manifest from the character of the verdict in this case, that the jury intended to award the plaintiff the full amount of the premiums paid by him on all the policies of insurance issued to him by the defendant, together with interest thereon, and the question arises whether such verdict is sustained by the evidence.
The general rule of law applicable to the right of the assured to a return of premiums paid is, that where neither party is chargeable with fraud, and the contract is not against law or good morals, the assured may, in the absence of express stipulations on the subject, recover back his premiums where the risk has not been commenced, or where the contract is void ab initio. But where the risk is entire, and has once commenced to run, though it be for ever so short a period, there can be no apportionment or return of the premium.
In cases of fraud, it has always been held that the premium must be returned whenever the policy is rendered void by reason of the fraud of the insurer. Thus, for example, where the insurance was made on a certain voyage “ lost or not lost,” when the insurer, at the time he entered into the contract, privately knew that the ship was arrived safe, he was held to be bound to restore the premium. Carter v. Boehm, 3 Burr. 1909. At one time, however, the decisions of the English courts were somewhat fluctuating as to whether the assured was or was not entitled to a return of premium, where the contract was rendered void ab initio by his own fraud. It was contended that, as the insurer received the premium in consideration of his taking upon him self the risk mentioned in tlie policy he could have no right to retain it, if no risk was run; and however improperly or unfairly the assured may have conducted himself, that would not furnish a new consideration to the insurer to be substituted in place of that expressed in the policy, so as to enable him to retain the premium. Wittenham v. Thornbrough, 2 Vern. 206; De Costa v. Scanderet, 2 P. Wms. 170; Wilson v. Ducket, 3 Burr. 1361. But the impolicy as well as the injustice of this view was pointed out by Lord Mansfield, in a case tried before him in 1785, and not long afterwards the contrary doctrine was settled by the court of King’s Bench. Tyler v. Horne, cited in Park on Ins. 218; Chapman v. Kennett, Id. The rule thus established by the King’s Bench, has ever since that time prevailed in England, and has been adopted without any material dissent in this country. Freismuth v. Agawam Hut. Fire Ins. Co. 10 Cush. 587. It is, that where a policy is void by reason of fraudulent misrepresentations or concealments on the part of the assured, the premiums can not be recovered back.
For a full discussion of the foregoing principles, the following authorities may be consulted: 2 Marsh. on Ins. Chap. 16; 2 Arnould on Ins. Chap. 11; Park on Ins. 215; Hughes on Ins. Chap. 16; Ellis on Fire and Life Ins. 24, 153; May on Ins. Sec. 567; 2 Phillips on Ins. Chap. 22; Bliss on Life Ins. Sec. 423; Flanders on Ins. 154.
Of the policies of insurance in question in this case, the first three were issued on an application which represented the plaintiff as being in good health, except that in the certificate of the medical examiner it appeared that he was then afflicted with hemorrhoids. So far, then, as that particular disorder was concerned, there was no misrepresentation or concealment, and the policies were issued with full knowledge of the condition of his health in that respect. The only evidence in the record as to his health at that time, apart from the application itself, and the ‘plaintiff’s mere statement in his testimony, that he was in poor health, is to be found in his letter of October 16, 1874, offered in evidence by the defendant; and it is difficult to see that the letter, so far as it applies to that period, discloses any sickness or disease beyond a severe attack of hemorrhoids. It is furthermore asserted in the letter, that when the application was made, the plaintiff gave to Talbott, the defendant’s agent, a correct statement of his condition, and told him that he did not believe that in his situation any company would insure him; and it also appears, at least inferen tially, thatTalbott, after recovering such information, drew up the application, and the plaintiff, supposing he had correctly stated the facts as disclosed to him, signed the application without reading it.
It thus appears that these three policies were valid, and not subject to avoidance by reason of any misrepresentation or concealment on the part of the plaintiff. The only disease from which the plaintiff was then suffering was disclosed in the application; or even if the plaintiff’s letter should warrant a different conclusion, it appears that the condition of his health was fully disclosed to the company’s agent, who was trusted to draw up the application, and who drew it up without inserting all the facts communicated to him by the plaintiff. A policy of insurance can not be avoided by the insurer on the ground of facts which were known to the agent who made the survey and filled up the application, and omitted to insert them therein. Atlantic Ins. Co. v. Wright, 22 Ill. 463; see, also, Commercial Ins. Co. v. Spankneble, 52 Id. 53; Lycoming Ins. Co. v. Barringer, 73 Id. 230; Reaper City Ins Co. v. Jones, 62 Id. 458.
The facts in relation to the §10,000 policy are essentially different. That policy was taken out something more than seven years after the date of the first application, and it does not appear that at that time the plaintiff made any disclosures in relation to his health, save what are embodied in the application then made. In that, his health is represented as good in every respect. The existence of each of the. diseases as to which inquiry is made is specifically denied, and to the question whether, during the preceding seven years, he had been afflicted with any severe sickness or disease, he answered, “had piles from ’65 to ’69—that is all.” That these representations were untrue, and that he was not only still suffering from hemorrhoids, but also from a complication of other disorders which were likely to shorten the period of his life, is abundantly shown by his letter. The statements of the letter stand entirely uncontradicted and unexplained, and no attempt appears to have been made to show by evidence what is claimed in argument, that they were untrue in fact,.and only the creation of the plaintiff’s morbid imagination.
Nor can it be held that the disclosures made to Talbott in 1866, were notice to the defendant of the condition of the plaintiff’s health in 1874. The interval, it may be presumed, was sufficient for the eradication of all curable diseases, and the plaintiff’s application made in 1874, represented in effect that he had recovered from the disease under which he was suffering at the date of his former policies.
It can not be doubted, we think, that the defendant’s refusal to accept the premium on the $10,000 policy when due, and its instruction to its agent to receive no morp premiums thereon, was an avoidance of the policy, so far as the defendant had any right or power to avoid it, and the plaintiffs right to recover back the premiums paid, depends upon whether such avoidance was wrongful. McKee v. Phoenix Ins. Co. 28 Mo. 383. If no proper ground for such avoidance existed, then the plaintiff was at liberty to treat the contract as at an end, and recover back all the money paid under it. But if, on the other hand, his misrepresentations or concealments were such that, under the rules.of law, or by the express terms of the contract, or both, the policy was voidable, he could have no right to a return of his premiums.
Even if it’should be held that the defendant wrongfully ter-" minated the policy, it is plain that the judgment must be reversed, for the reason that the verdict was for too large an amount. The recovery must be limited to the premiums paid on the policy thus wrongfully avoided. Those paid on the first three policies can in no sense be regarded as having been paid on the $10,000 policy. Those three policies had no connection with those of later date, except that their surrender formed a part of the consideration upon which the last mentioned policies were issued. The three policies, so far as this record shows, were in all respects valid, so long, as the plaintiff was able to keep them in force by the payment of the annual premiums, and during all that time the defendant carried the risk thereby assumed, and had the plaintiff died then, the defendant would undoubtedly have been liable to pay the full amount thereby insured.
The surrender of the three original policies may be regarded as forming a part of the consideration of the $10,000 policy, and the $786 paid-up policy, to the extent of their then cash, or surrender value, and no further. This value was by no means necessarily commensurate with, or dependent upon, the amount of premiums which had been paid. What it really was, we have no evidence beyond the estimate which the parties themselves appear to have put upon it. For the surrender of the $5,000 and $3,000 policies, the defendant offered, and the plaintiff accepted, the $786 paid-up policy; and for the surrender of the $2,000 policy there was a like agreement, that $150 cash should be allowed, said sum to be applied in part payment of the first semi-annual premium on the $10,000 policy. There is no evidence of any unfairness in these estimates, or that they were not the full amount the policies to be surrendered were then worth. Furthermore, these values having been agreed upon by the parties with full knowledge of all the facts, and without fraud or coercion, such agreement must be regarded as conclusive between them.
It may be remarked that the evidence shows no direct attempt on the part of the defendant to set aside or avoid the $786 paid-up policy. Whether that policy was so related to the $10,000 policy, that an avoidance of the latter carried with it as a necessary result an avoidance of the former, or whether the paid-up policy is still in force, we do not now feel called upon to determine.
But we think it manifest from the evidence, that the defendant was justified in avoiding the $10,000 policy. The admissions of the plaintiff’s letter of October 16, 1874, render it clear beyond controversy, that he was guilty of gross misrepresentations and concealments in the written application on which that policy was based. The application, which is shown to have been filled up according to his dictation, represents him as being in good health in every respect, and sound in body and mind, while it appears from his letter that he was, and for years had been, suffering from a complication of disorders and ailments of a painful and aggravated character, and which, if they had been disclosed at the time his application was made, would have altogether prevented the execution of the policy. That these representations were false, and were known to be so by the plaintiff, and that the defendant relied upon them in issuing the policy, is, as the evidence now stands, beyond dispute. It thus appears that the policy was avoided in consequence of the plaintiff’s own fraud, and it necessarily follows, from well established rules of law, that he can not be entitled to a return of the premiums paid.
The same result follows from the terms of the contract itself. In the application, which was made a part of the contract, the plaintiff agreed and warranted that the answers therein given were true, and that if said application was in any respect false or fraudulent, the policy should be void; and all moneys paid on account thereof should be forfeited to the defendant. This condition in the contract of the parties must be held to be valid, and under it, the plaintiff "is precluded from recovering back his premiums. A condition in a proposal for a policy of life insurance almost identical with this, was considered by the English Court of Exchequer in Duckett v. Williams, 2 Cromp. & Mees. 348; and it appearing that certain representations in the proposal were untrue, it was held that under this clause the policy was void and the premiums paid forfeited to the company, so that they could not be recovered back.
The instructions of the court below were, in the main, in accordance with the principles above laid down, but the jury seem to have disregarded the instructions, and to have found their verdict against both the law and the evidence. Their verdict should have been set aside, and for the error of the court in refusing to set the verdict aside and award a new trial, the judgment must be reversed and the cause remanded.
Counsel for the defendant have urged with considerable force their assignment of error, based upon the admission in evidence of the plaintiff’s letter of December 26, 1873, to Talbott, and Talbott’s answer indorsed thereon. It became material in one view of the case, to prove the date at which the three policies were transmitted by Talbott to the plaintiff before their delivery to Day, and as it is shown that they were inclosed by Talbott with those letters, we think the letters themselves contain some evidence on that question. We do not see that they were admissible on any other ground or for any other purpose. It is very clear, at least, that the plaintiff’s statements in his letter, not assented to or even noticed by Talbott in his answer, are not competent to prove the facts thus stated.
Judgment reversed.