Gabbett v. Connecticut General Life Insurance

303 Mass. 433 | Mass. | 1939

Cox, J.

The plaintiff, a registered nurse, had an accident insurance policy, in a company other than the defendant, that expired on October 30, 1936. On or before September 30, 1936, she signed an undated application for an accident insurance policy of the defendant. She delivered the application to the defendant’s agent, telling him that the policy was to take the place of her other policy. She expected the defendant’s contract to take effect on October 30. There is no question as to the payment of *434premium. In her application the plaintiff answered the following questions in the negative. “21. (a) Have you ever been advised to have a surgical operation? (b) Have you ever had a surgical operation performed? ” On October 14, 1936, the plaintiff was operated upon for the removal of a bunion on her left foot. The operation was performed by the removal of a wedge-shaped section of the big toe knuckle, resulting in a folding and resection of the bone, shortening the toe and virtually making a new joint. The policy was issued on October 30, 1936. Neither the defendant’s agent, nor the defendant, knew of this operation of October 14, 1936, at the time the policy was issued, and the defendant had no actual knowledge of the operation until a long time after. No question of loches is involved. The plaintiff admitted that she did not see or communicate with the agent during the month of October, 1936.

The jury could have found that prior to the time the plaintiff signed the application she had been advised to have the operation. The plaintiff herself testified that she had had a bunion removed on her right foot by an operation in 1928, that after the second operation she returned to her work as a registered nurse in about four weeks from October 14, 1936, and that she could have returned at the end of three weeks. About three weeks after she returned to work she injured her back, and seeks to recover for that injury in this action upon the policy issued by the defendant. At the close of the evidence the judge submitted four questions to the jury: “1. When the plaintiff gave the application for insurance to Mr. Carmichael [the agent] did it contain a misrepresentation? 2. If the previous question is answered in the affirmative, was such misrepresentation made with actual intent to deceive? 3. If you answer the first question in the affirmative, did the matter misrepresented increase the risk of loss? 4. Did the operation on October 14 increase the risk of loss?” The jury answered the first question in the affirmative, the second and third in the negative, and the fourth in the affirmative, whereupon the judge, upon motion by the defendant, ordered a verdict for the defendant. The plaintiff excepted. The *435only issue raised by this bill of exceptions is whether the judge erred in allowing the defendant’s motion. The bill of exceptions states that the defendant’s answer admitted all the allegations in the plaintiff’s declaration, but pleaded “certain facts as an equitable defense in proper form to cover the matters hereinafter set forth.”

The equitable defence was properly pleaded, and, if established, is a good defence to the plaintiff’s action. G. L. (Ter. Ed.) c. 231, § 31. Barton v. Radclyffe, 149 Mass. 275, 280. Bancroft Trust Co. v. Canane, 271 Mass. 191, 198, 199. See Corbett v. Craven, 193 Mass. 30; Stevens v. William S. Howe Co. 275 Mass. 398.

We think there was no error. The policy of insurance as a contract did not become operative until the offer of the plaintiff by way of her application was accepted by the defendant, and the policy was delivered as of its effective date, October 30, 1936. Markey v. Mutual Benefit Life Ins. Co. 103 Mass. 78, 89. Allen v. Massachusetts Mutual Accident Association, 167 Mass. 18. Carleton v. Patrons’ Androscoggin Mutual Fire Ins. Co. 109 Maine, 79, 83. Stipcich v. Metropolitan Life Ins. Co. 277 U. S. 311, 316. In some of the cases involving facts somewhat similar to those in the case at bar, the application for insurance has been described as a continuing representation. The important question is to what point of time does the application relate. We are of the opinion that that time is when the contract of insurance is made or, as was said in the case of Kester v. Metropolitan Life Ins. Co. 228 Mo. App. 550, at 554, “the representations . . . must be regarded in law as though they were made at the time the policy was delivered.” As qualified by provisions of our statutes, the language in Stipcich v. Metropolitan Life Ins. Co. 277 U. S. 311, 316, is pertinent: “Insurance policies are traditionally contracts uberrimae ffdei and a failure by the insured to disclose conditions affecting the risk, of which he is aware, make the contract voidable at the insurer’s option.” In that case at page 317, the court goes on to say: “If, while the company deliberates, he [the applicant] discovers facts which make portions of his application *436no longer true, the most elementary spirit of fair dealing would seem to require him to make a full disclosure. If he fails to do so the company may, despite its acceptance of the application, decline to issue a policy ... or if a policy has been issued, it has a valid defense to a suit upon it.”

The-jury, by its answer to question No. 4, found that the operation of October 14 increased the risk of loss. If the operation had been performed prior to the making of the application, and the plaintiff had concealed it, the answer of the jury that the operation increased the risk of loss would bring the case within G. L. (Ter. Ed.) c. 175, § 186, which provides that "No oral or written misrepresentation or warranty made in the negotiation of a policy of insurance by the insured or in his behalf shall be deemed material or defeat or avoid the policy or prevent its attaching unless such misrepresentation or warranty is made with actual intent to deceive, or unless the matter misrepresented or made a warranty increased the risk of loss.” The jury found that there was a misrepresentation in the application for insurance at the time she gave it to the agent, but that such misrepresentation was not made at that time with intent to deceive, and that that matter did not increase the risk of loss. These findings are not decisive. The jury, in effect, has also determined that between the time of the making of the application and the issuance of the policy something happened to the plaintiff which increased the risk of loss, or, in other words, that during that interval there was a material change in the condition of the plaintiff. We think that she had a duty to inform the defendant of this change, and that, in view of the jury’s finding, her failure to do so is a defence to her action. The plaintiff contends that in many of the cases in which this same question has arisen, the change in the condition of the insured was of a serious character, but the answer to this contention is the finding of the jury that the change in the plaintiff’s condition increased the risk of loss. The point is that the circumstances of the plaintiff were altered to her knowledge after she made her application, but the de*437fendant had no knowledge of this change. It well may be that if the defendant had had this knowledge it would not have issued the policy. In any event, it has the right to complain of the plaintiff’s failure to inform it. Our view is supported by the great weight of authority. Canning v. Farquhar, 16 Q. B. D. 727. Stipcich v. Metropolitan Life Ins. Co. 277 U. S. 311. Whitley v. Piedmont & Arlington Life Ins. Co. 71 N. C. 480. Harris v. Security Mutual Life Ins. Co. 130 Tenn. 325. Cummings v. Connecticut General Life Ins. Co. 101 Vt. 73. Kester v. Metropolitan Life Ins. Co. 228 Mo. App. 550. Butler v. New York Life Ins. Co. 213 N. C. 384. New York Life Ins. Co. v. Gay, 36 Fed. (2d) 634. Equitable Life Assurance Society v. McElroy, 83 Fed. 631. Western & Southern Life Ins. Co. v. Tomasun, 358 Ill. 496. Compare Doyle v. Goldberg, 294 Mass. 105; Royal Indemnity Co. v. Perry, 296 Mass. 149.

Exceptions overruled.