166 F.2d 63 | 6th Cir. | 1948
Appellant corporation and its president, Hyman Blitz, made application, on August 29, 1945, to appellee insurance company for an insurance policy upon the life of Blitz, to be payable to the corporation as beneficiary. The application, which provided that it should form the basis of the contract of insurance applied for and which also provided that it should become part of the contract when issued, set forth and represented, in answer to questions relating to his physical condition, that Blitz had never had any symptoms of heart trouble, or suffered from heart disease. These representations were true, or, at least, true as far as appellant and Blitz were aware. On August 30 and August 31, 1945, he was examined at the request of the insurance company by two physicians designated by it, and neither of the examinations disclosed any heart defects or disease or other health defects affecting the insurability of Blitz.
Neither the annual premium on the insurance nor any part thereof was paid to the insurance company or its agent at, or prior to, the time that the application was made on August 29, 1945. Such premium was paid at the time the insurance company delivered the policy of insurance to appellant corporation on September 19, 1945.
However, on September 12, 1945, one week prior to the delivery of the policy to appellant and payment of the premium therefor, Blitz suffered a severe heart attack, known as angina pectoris with coronary thrombdsis. Five days after the first attack and two days before the payment of the premium and the delivery of the policy, he suffered another similar attack. During the period between these attacks, he was in a critical condition under the care of physicians.
During the period from the time when the application for the policy was filed on August 29th, until September 17th, the date of Blitz’s second heart attack, the insurance company was making an investigation of facts disclosed by the periodic health examinations of Blitz which were referred to in the application for insurance. On September 17th, these investigations were completed and disclosed no evidence of heart diseases or defects or any other health defects. Two days later, the policy was delivered to appellant company and it was at that time that the annual premium on the insurance was first paid by appellant. A little more than six months later, Blitz died as a result of a third heart attack on March 31, 1946.
When the policy was finally delivered, the insurance company knew nothing of any disease or illness suffered by Blitz during the intervening period between the time of the application for the policy and its approval and delivery by the insurance company. It acquired its first knowledge of the several heart attacks on or about April 18, 1946, when it received the notice of claim and proof of death of Blitz which was filed with the insurance company by appellant corporation. After an investigation of the facts thereby disclosed, the in
The question before us is one of law. Appellant claims that the parties contracted on the basis of conditions as they existed on the date of the application and medical examination made by the physicians employed by the insurance company; that the insurance company agreed that the insurance would take effect as of a date prior to the time when appellant acquired knowledge of the change in the physical condition of Blitz; and that, since it was provided that the insurance would become effective at such a prior date, the failure of appellant to inform the insurance company of such change of physical condition was not evidence of bad faith.
Appellant’s application for insurance, in this case, contained, among other provisions, the following: “If there has not been paid to the Company’s agent the premium on the insurance herein applied for, such insurance shall not become effective until the Company has approved this application at its home office, the first premium has been paid and the policy delivered to me or to the owner designated therein during my lifetime; and that thereupon the insurance shall become effective upon the date of issue stated in said policy.”
In its decision, the district court relied upon the authority of Stipcich v. Metropolitan Life Insurance Co., 277 U.S. 311, 48 S.Ct. 512, 513, 72 L.Ed. 895. In that case, a party, after making his application and before the delivery of the policy, suffered a recurrence of duodenal ulcer which was the cause, subsequently, of his death. Although he consulted physicians who advised an operation for removal of the ulcer, he did not, according to the claim of thd insurance company, inform it of his changed condition. The application for insurance in that case provided that “the company shall incur no liability under this application until it has been received, approved, and a policy issued and delivered, and the full first premium stipulated in the policy has actually been paid to, and accepted by, the company during the lifetime of the applicant.”
There is very little difference between the Stipcich case and the case before us. In the Stipcich case, the application provided that the company should incur no liability until the application had been approved, the policy delivered, and the premium paid during the lifetime of the applicant. In the instant case, the application provided that the policy would not be effective until the company had approved the application, had delivered the policy, and had been paid the first premium, and that, thereupon, the insurance would become effective upon the date of issue stated in the policy. The fact that the insurance liability was to be related back to a prior date, only after the policy was delivered, does not differentiate the case from the Stipcich case. In both, liability was to attach, only upon delivery of the policy.
The Supreme Court observed that an insurer could, of course, assume the risk of such changes in the insured’s life as might occur between the date of application and the date of issuance of the policy, and .that where the parties contract exclusively on the basis of conditions as they existed at the date of the application, the failure of the insured to divulge any later known
We do not find in the decisions of the courts of Ohio any holding that this obligation of disclosure which, as the Stipcich case declared, was an obligation imposed by law, is in any way modified or that it is otherwise changed by statutory provision.
Appellant argues that the rule of the Stipcich case cannot be considered the law in this controversy which arose in the State of Ohio, because of the authority of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, and Ruhlin v. New York Life Insurance Co., 304 U.S. 202, 58 S.Ct. 860, 82 L.Ed. 1290. No Ohio cases are relied upon by appellant as controlling, but certain adjudications from other states are referred to as establishing the validity of its contentions. Among the cases cited by appellant, one involved prepayment of the premium, and, therefore, completion of the contract of insurance when the application was accepted; in other cases, agents knew of the illness of the applicants subsequent to the application; or the insured, himself, had no knowledge of the changed condition of his health on the effective date of the policy; or the parties had agreed that the effective date of the insurance liability would be prior to the issuance of the policy. These cases do not involve nondisclosure of the insured’s changed physical condition (of which the insurance company was ignorant) prior to the time when the insurance liability became effective; and neither these, nor any other cases cited are applicable to the present controversy. There are no Ohio statutes or decisions of the Ohio courts upon the point in question, and we, accordingly, follow the Stipcich case as the controlling authority.
In accordance with the foregoing, the judgment of the district court is affirmed.