207 F. 481 | 9th Cir. | 1913
(after stating the facts as above). The defendant denies its liability on the two'insurance policies for $5,000 each, issued to the plaintiffs as beneficiaries, on the life of George S. Moats, on two grounds:
(1) It is charged in defendant’s answer that at the time of making application for such insurance, George S. Moats, the insured, made false and fraudulent answers and representations to two certain questions asked him by Dr. H. L. Underwood, the medical examiner of the insurance company, such answers and representations being material to the risk, and known to be false and fraudulent by both the insured and the beneficiaries. The two questions and answers charged to have been false and fraudulent were preceded by the following general question:
“9. Have you ever had or suffered from any of the following diseases? Answer ‘Yes’ or ‘No’ to each part of this query below. (Give explicit answers and particulars in each case—the medical examiner should satisfy himself that the applicant gives full and careful answers to this question).
“ ‘Yes’ or ‘No’; name of disease; No. of attacks; date; duration; severity ; results.
“(First question). A. Of the brain or nervous system?
“Ans. No. * * *
“(Second question). 11. A. Have you been under the care of or consulted a physician concerning yourself for any cause within five years?
“A. Once 3 yrs. ago.
“B. If so, for what ailment; name and address of physician?
“Ans. A pain in the back. N. Molitor, La Grande.”
If either of these answers was false and fraudulent, it may be assumed that the insurance company had no knowledge of their false and fraudulent character at the time of the delivery of the policies of insurance, and that the answers were material to' the risk.
(2) It is also alleged in defendant’s answer that the policies ox insurance were not to take effect until delivery to the applicant; that subsequent to making application for the policies of insurance on the 16th day of March, 1911, and prior to their delivery to the applicant on April 6, 1911, and pending negotiations for a contract of insurance, the applicánt became insane; that the insurance company had no knowledge of any change in the physical or mental condition or health of the applicant at the time of the delivery of the policies; that a knowledge of such change in the physical or mental condition and health of the applicant was material to the risk, and had the insurance
“Do you find after careful inquiry and physical examination, any evidence of past or present diseases (if so give full details).”
Then followed the direct and specific question (previously asked the applicant): “Of the brain or nervous system,” to which the medical examiner replied, “No.” Then followed a number of questions relating to certain signs and symptoms of disease, from which the skilled physician and examiner would be able to make a diagnosis of the applicant’s condition of health, or lack of it. These signs and symptoms, as reported by the medical examiner, appeared to have been satisfactory. But in addition to this report in detail, the medical examiner was required to state whether there was anything about the applicant’s character, residence, mode of life, or occupation, which would render the risk in any way undesirable. His answer to this question was, “No.” He was further required to state whether he had reviewed all of the answers in his report, and also to state whether he was sure they were clear and complete. His answer to this question was, “Yes.” He was further required to report:
“Do you believe that the applicant has given full and true information in nil respects?”
His answer to this question was, “Yes.” He was further requested to send direct to the home office of the company any information which for any reason he preferred not to embody in his report; that every endeavor should he made by the examiner to make his report as complete and precise as possible, the object being to give the home office a pen picture of the applicant as he presented himself to the examiner; and, if in addition the examiner knew of any fact or had any impression not expressed in the preceding part of his report that in his judgment would probably influence the home office in its estimate of the risk, he was required to note it under the head of “additional remarks.” Nothing appeared in the report under that head; from which it may be inferred that the medical examiner, after having made a careful examination of the applicant, as a representative of the company skilled in the detection of disorder, found no sign or evidence of derangement of the brain or nervous system; that nothing
It was plainly upon the examination and report of this skilled expert of the company that the character of the risk was finally and mainly determined by the company, and not wholly upon the answers and representations of the applicant himself; and particularly must this be so where the inquiry relates to the brain or nervous system of the applicant, wherein a physician and skilled examiner and observer is often a better judge of the physical and mental condition of the applicant than the applicant himself. Dr. Underwood, the medical examiner, whose report we are now considering, was called as a witness in behalf of the defendant, and testified on cross-examination, among other things, that from his examination of the applicant, and the conversation which he had with him, he found nothing out of the normal. He found him a good risk so far as the examination revealed his condition. He had no ailment that the witness detected, and the witness was there as the representative of the company to find out if there was anything. The competency of this witness to so testify was not questioned.
■“Looking into the application upon the faith of which the policy was issued and accepted, we find much justifying the conclusion that the company did not require the insured to do more, when applying for insurance, than observe the utmost good faith, and deal fairly and honestly with it, in respect of all material facts about which inquiry is made, and as to which he had or should be presumed to. have knowledge or information. * * « If it be said that an individual could not be afflicted with the diseases specified in the application, without being cognizant of the fact, the answer is that the jury would, in that case, have no serious difficulty in finding that he had failed to communicate to the company what he knew or should have known was material to the risk, and that, consequently, for the want of ‘fair and true answers,’ the policy was, by its terms, null and void. But, whether a «disease is of such a character that its existence must have been known to the individual afflicted with it, and, therefore, whether an answer denying its existence was or not a fair and true answer, is a matter which should Iiave been submitted to the jury.”
Dr. Charles Henry Upton testified that the deceased had called to see him some time during the spring of 1911; that he had made no record of the consultation and could not recall the exact date; that he could not recall whether it was before or after the 16th day of March; that the deceased was accompanied by his wife; that he had on that occasion complained of nervousness and sleeplessness; that he examined him and advised him to go to a lower altitude and consult a physician there; that he at that time had considered it a case-of neurasthenia.
The two visits to Dr. Molitor, the first on the 3d of March, 1911,. and the second on the 14th of March, 1911, the visit to Dr. Uauglilin on the morning of the 16th of March, 1911, and the visit to Dr. Upton some time in the spring of 1911*, are the only instances in which it is' claimed that the deceased consulted physicians, at any time within five years prior to the date of his application for insurance, with the-exception of a former visit to Dr. Molitor about three years before-that time, which visit was admitted and set forth in the medical statement signed by the deceased at the time of applying for insurance.
It is contended by the insurance company that the deceased consulted the physicians above named within five years prior to applying for insurance, that such consultations were for a disease of the brain or nerves, and that the statements, answers, and representations made by him at the time of applying for insurance, to the effect that except on one occasion he had not consulted a physician for any cause whatever, within five years prior to the date of the application, and that lie had never been treated for any disease of the brain or nerves,, amounted to a deception and a fraud upon the insurance company.
But there was a material conflict as to whether the deceased did, in fact, consult either Dr. Molitor or Dr. Upton, except as admitted with respect to Dr. Molitor. Concerning the two alleged consultations of the deceased with Dr. Molitor, at which the latter testified that Mrs. Moats was present, she testified that some time in the spring of 1911, the exact date of which she could not remember, she had gone to consult Dr. Molitor, and that the deceased had gone with her; that he had not gone to consult the doctor concerning himself; that the only conversation between Dr. Molitor and the deceased on that occasion was that Dr. Molitor said something aboutj his stomach being out of order; that that was the only time the deceased had seen Dr. M olitor in her presence, except once about three years before that time, when he had consulted Dr. Molitor for a pain across liis back.
Concerning the alleged consultation with Dr. Daughlin, on the morning of March 16, 1911, at which consultation Dr. Daughlin testified that Mrs. Moats was present, she testified that she and the deceased had not visited Dr. Daughlin on that date; that they had visited him one day some time after that date; that she thought that the date on which she and the deceased had called on Dr. Daughlin was March 21, 1911.
“Now, then, I do not understand that consulting a physician about some slight ailment or indisposition—failure of an applicant, for insurance, to state that he had consulted a physician about some slight or immaterial ailment—would be necessarily a fraudulent statement within the meaning of this policy, but it must be something substantial, something of some import or serious character. It is the duty of an applicant to be honest, fair, conscientious, state the facts as he understands them, so that the company may determine for itself whether it will issue the policy or not. These are proper questions of fact for you to determine from the testimony in the case.”
It is not contended that there were any false representations made by the deceased at any time after applying for insurance and before receipt of the policy by him, nor is it contended that there were any affirmative acts of deception on his part. But it is contended that the failure of the deceased to inform the insurance company, or its agent, at the time of the delivery of the policy to him, that he had been confined in the Mountain View Sanitarium between the dates of March 21, and March 27, 1911, amounted a deception and a fraud upon the insurance company.
The only conditions subsequent stipulated in the application signed by the deceased, concerning the delivery of the policy, were that the first premium be paid and the policy delivered to and received by the deceased during his lifetime, and that the policy when so delivered should then relate back to and take effect as of the date of the application. And in the policy itself it was expressly provided that after its delivery to> the deceased it should take effect as of the 16th day of March, 1911. There was no proviso, in either the application or the policy itself, that the policy should take effect only if delivered to and received by the deceased during good health and insurable condition, although, in fact, at the time of receipt of the policy by the deceased he was apparently in good health and physical condition, haying been discharged from the Mountain View Sanitarium about 10 clays prior to that time.
The first year’s premium had been paid by the deceased at the time of making application for insurance on March 16, 1911. The premium, amounting in each case to the sum of $134.15, was the amount of the first premium provided for in each policy, and constituted payment for the period of one year, from March 16, 1911, to March 16, 1912. All the time subsequent to making application for insurance and payment of the first year’s premium, up to the time of the death of the deceased, was part of the period covered by that premium, which was the payment for the risk assumed during that period.
The case of Cable v. United States Life Insurance Company, 111 Fed. 19, 49 C. C. A. 216, relied upon by counsel for the insurance company in support of the doctrine of continuing representations, and which the insurance company asserts is decisive of the issues in this' case, is very different from the case at bar. In that case the policy of insurance, provided that it should take effect only upon payment
The case of Equitable Life Assurance Society v. McElroy, 83 Fed. 631, 28 C. C. A. 365, to which we are referred by counsel for the insurance company, also presents an entirely different state of facts from those contained in the present case. In that case the insured, McElroy, had allowed a policy of insurance to lapse and he forfeited on account of nonpayment of premium. Subsequently negotiations were had between him and the society with a view of securing reinsurance; and during these negotiations he became seriously ill with appendicitis. On the morning of June 28, 1894, the surgeons decided that his situation was grave, and that an operation offered the only chance for recovery. McElroy then called his secretary to his room, delivered to her some blank checks signed by him, and told her to get the policy of insurance from the society and to pay the premium therefor, but not to tell the officers of the society that he was ill. With full knowledge of McElroy’s serious illness, and that he was about to be operated on, his secretary went to the offices of the society, told the employes with whom she talked that her employer, McElroy, was away on business, paid the premium on the insurance policy, and secured the policy. The testimony showed that McElroy was dead at the time the policy was delivered to his secretary, although she was not aware o E this fact. The basis of the court’s decision in that case was that the evidence was undisputed, and that it seemed to show that there was no contract to insure, and no intention to make any such contract, until the premium was paid. The court, therefore, held that the failure of the insured, or of his secretary, to disclose to the society the condition of his health at the time of the payment of the premium by and delivery of the policy to the secretary was a fraud upon the society which vitiated the contract of insurance.
'Chat the doctrine of continuing representations is inapplicable to the facts as disclosed in this case is fully sustained by the decision of the Supreme Court of the United States in the case of Insurance Co. v. Higginbotham, 95 U. S. 380, 383, 24 L. Ed. 499. The facts in that case were very similar to those in the case now before the court. The policy in that case was for life, and was dated the 16th day of July, 1869. It stipulated for the payment of the annual premium on or before 12 o’clock on the 16th day of July in every year, and provided that in case the premium should not be paid at the times mentioned, the policy should cease and determine. The first premium was duly paid, hut when the next premium became due, on July 16, 1870, it was not paid, and the policy lapsed. In the following October the insured made application to the company for reinstatement of the policy, and the company agreed to reinstate it upon the conditions and in the man
“The facts referred to, we think, show that although actually completed on the 14th of October, the jury would have been warranted in finding that the contract was understood and intended by the parties to take effect by relation as of-the 1st of the month. The money was paid to the agent at Washington on that day. The full amount of the premium for one year was paid by the applicant, viz., $137.50. The company cut off the insured from 2% months of his policy when they issued it on the 1st of October, and dated it as of July 16th, although taking payment of the premium for a year. We think that they did not necessarily intend to cut off an additional 14 days, but may have meant it to be as of the date when the insured paid his money and presented a risk that they were willing to take, and of the time that it would have taken effect if they had responded without a delay of two weeks. Had it been otherwise, we cannot see how the sagacious business men who control this company would have assented to the delivery of the policy without inquiry as to the intermediate time. More than three months elapsed before Day’s death, monthly returns being matde by the agent; and the company must have known and assented to the delivery of the renewal receipt not only, but to the fact that there had been no inquiry or information as to Day’s health after October 1st. The jury might account for it on the theory that the whole contract was intended to be and was as of October 1st, and that it spoke from that date. There is every indication that Day thus relied upon that contract, nor is there any reason to believe that he intended to deceive or to conceal. The company made inquiries to its own satisfaction, so far, in such direction, upon such points, and within such periods, as it thought proper. It was not for him to advise the company of what it should do, or to volunteer information which it did not seek. He paid his money, delivered his certificate, received the renewal when the company chose to give it, found upon examination that it covered the whole period from the July preceding. He lived in the same town with the agent, and received no suggestion from him that anything further was expected, and was warranted in assuming that his contract was intended to take effect from an earlier period than its actual delivery. He probably died in the honest belief that he had thus provided for his widow. It would be 'far from good faith to his representatives should it now be held otherwise.”
The judgment and decree of the lower court is affirmed,