*1 had be- in this case of fraud. The opinions divergent estimates fore it merchandise; wit- as to the value witness; of each nessed the demeanor findings accordingly. Such and made findings supported evi- sufficient

dence or inferences v. disturbed. Tennant should not be Ry. Co., 29, 64 P. 321 U.S. Peoria & U. Myers (1944); 409, L.Ed. 520 S.Ct. Reading Co., 331 U.S. S.Ct.

v. (1947). 91 L.Ed. judgment is

Affirmed LIFE INSURANCE

METROPOLITAN COMPANY, Appellant,

v. FUGATE, Appellee.

Lucille L.

No. 19063. Appeals Court of

United States Fifth Circuit.

Jan.

Rehearing Denied Feb.

789 attorneys’ fees, for ment interest and law, recoverable under in addi- Florida policy. tion to the full face amount of The cause U. Dis- S. removed trict Court for District the Southern jury. From Florida was tried a judgment a verdict and Fugate, Metropolitan of Mrs. favor appealed. has issuing pol- Metropolitan admitted icy, during its the death the insured pay Mrs. continuance and its refusal to Fugate, beneficiary, proceeds of allegations policy; but denied the that she and the insured had done singular performed matters all and things required entitle of them to Fugate its Mrs. to recover. second defense, Metropolitan one, an affirmative liability denied grounds under Fugate, insured, J. Fred falsely “No” the follow- had answered ing for the 3 policy:

“8(b) you (al- Have ever used them beverages) coholic so, to excess? If long?” when and for how “5(a) you patient Have ever been hospital, clinic, in or visited dis- pensary or sanatorium for observa- tion, examination or treatment?” “5(f) you any physi- Have consulted cian, practitioner healer or other Bell, Jones, John Knight, John Arthur past years within the 5 rea- Jones, Fla., Bell Tampa, & appellant. son not mentioned above?” Franklin, A. James Jr., John W. Emer- fact, proved As a matter of it was son, Jr., Henderson, Franklin, Starnes & unques- trial uncontradicted and Holt, Myers, Fla., appellee. Fort testimony Fugate tioned that Mr. RIVES, Before CAMERON patient Hospital at Lee Memorial GEWIN, Judges. Circuit 24,1958 4,1958, February to March from Hospital Sep- White from and in Cross GEWIN, Judge. 22, 2, Circuit to October 1958. He tember complaints alcoholism or was treated for Lucille L. sued resulting intoxicants Company, Life Insurance York New hospitals. both corporation, in the Circuit Court of Lee County, Florida, applied because of the refusal pay her, beneficiary prospective owner her husband owner, proceeds and absolute prospective pol- April of a insured on icy by Metropolitan August issued on The were answered in $100,000.00 application. amount B of Part Answers of husband, Fugate, the life of her Fred J. applica- the decedent in Part B of May 24, 1960, who on pol- died while May 1, were made to on tion Dr. Vinson icy judg- was in also force. She claimed same answers were 2,B Dr. McEwan testified he was the in Part Perez

the decedent to Dr. containing July Hospital former on owner of White Cross questions, the same ap- question re- served as its Administrator of the size 1959. A policy proximately was closed until it quires two examinations. *3 chiefly hospital the in August 1959. This was used on was issued pol- for Al- May 24, The the treatment alcoholism. 1960. of on decedent died icy though closed, of rec- period hospital the the for a had in had been existence al- preserved. ords records These death. 9 months before liability produced They under were leged and identified. it denied that when Fugate, as deceased, Fugate, showed that the Mr. policy, tendered of hospital beneficiary, Septem- amount was admitted to on owner and $4,496.00 four occasion, ber 1958. On this ad- reimbursement as completed by mission form premiums paid. was head quarterly duty nurse on at the time. Charts de- Dr. House testified that he saw respect Fugate kept by to Mr. the- patient on cedent for first time as a duty. various on nurses Nurse Cox was. February 24, 1958, came to when he night supervisor when the decedent was physician’s complained aof office and completed admitted she admit- admittedly cough, sweats; fever and signatures history, tance bore the which days drinking for several he of Mr. Nurse- and Dr. Holecek. time. and was intoxicated on the- Cox testified that the information physician he decedent informed history the- admittance was obtained from daily 4 to 6 prone about was to drink patient. She stated that when another stop would at a time and then weeks admission, accompanied patient on normalcy started until he return to she made a notation to that effect and' drinking again. pretext used no on the records there was notation drinking painful was a Fu- back. Mrs. relating a. There was to the decedent. gate accompaniedher at the time husband sheet, history on admission notation House, of the visit to Dr. who informed reading follows: them both that he could not treat the de- drinking, years. “Years 30 Pe- cedent unless to a hos- he was admitted riodical, years, every months, 20 304 pital so that he could be attended nurs- Steady 304 wks.” going Mr. es. resisted agreed go finally hospital, but interpreted meaning- This notation was day and he was admitted. patient engage period' in a drinking every diagnosed 4 Dr. 3 or months House and that the decedent’s would', periods drinking certain of the resulting condition delirium tremens history or 4 last 3 weeks. The from the sheet fur- deprived fact that he was showed, “History hospital, ther produced alcohol in Delirium Tre- which mens, ago”, “Nightmares 6 mos. disturbed brain fre- physiology resulting in first, During quently”. stay Under “Remarks” on hallucinations. hospital, his notation, the nurses’ sheet of chart is the the decedent was unconscious at fifths, drinking one or times and “Has been two thrashed about the in bed get whiskey day drinking.” up. effort to The- He was restrained with succeeding pages of chart show leather wide wristband which was fas- given with a belt decedent was one and a half tened bed frame. Dr. during explained whiskey times decedent, House the- ounces Mr. thought days day stay Fugate, of his the hos- he saw first 5 bulldozers and draglines. pital, of his first two exclusive drinks He awas contractor. After ounces, quarter subsided, delirium amount one and tremens Dr. House this, McEwan, According lectured the decedent Dr. about each. whiskey to the decedent to re- him on released March He having hospital days possibility deliri- of his approximately duce on tremens. this occasion. um

79^ episodes in, testimony Metropoli- was men- insurance, After the Neither these tan moved for tioned a directed verdict on the grounds although episode proved the last occurred that it had the substan- gave the decedent tial elements of 7 months before its affirmative defense stating evidence; preponderance that he a fair answers to Dr. Vinson clinic, hospital, dis- and that there nor not been in a was no evidence observation, might reasonably pensary or sanatorium inference which Approxi- drawn viewed from the evidence when treatment examination.1 light plaintiff the last mately months after most favorable to Dr. Perez in her statements visit he made like could sustain a verdict July months Approximately 10 favor. This motion denied and *4 charged jury. elapsed visit last court between the the policy. of the issuance the Metropolitan excepted to the court’s give requested refusal to its Instruction Shafer, underwriter chief William 2 was, course, No. requested 3 which Metropolitan, if testified after the motion directed verdict or physicians the decedent treated who and which in substance instructed the recently hospitals had so the two jury that if it found from the evidence ap- in the mentioned had attended been knowingly the decedent concealed though of the nature even plication, company from the insurance the fact not been diagnosis had or treatment hospitalized, he had twice been as developed Metropolitan have given, would mentioned, application above was when hospital treat- cause the details policy, made for the their verdict should doc- contacted have ment be returned for the Metro defendant. information full obtain tors politan objected then to the court’s in decedent; inall health of as to the jury struction that if the found that the policies rules, accordance beverages, intoxicating decedent did use company. Sha- Witness of the standards not to an as to constitute such extent but company that if testified further fer excessive use thereof defined as satisfactory obtain unable to been had in that then the decedent’sanswer court,3 issue details, declined it would respect would true and should have been positively testified policy. He beneficiary. recovery not defeat jury not policy of the it was Fugate. Metro found for Mrs. people who policies to issue insurance judgment politan moved for a N.O. then for alcoholism treatment under had alternative, V.; trial. for a new or in the elapsed unless 5 Metropolitan denied. The motion was specifies re- no and there a “cure” since lapse overruling error Fugate pre- meantime. give motions, In the refusal several reputable witnesses number sented charge 3, and the No. struction associates and business were friends who jury by the court. husband, who testified her deceased drinking to Metropolitan of his that un not know contends they did Florida, the State statute of der a 1959 excess. ap- application, you to another in answer tbe the evidence that find from 1. The applicant knowingly Rugate, plicant, question, con- disclose Fred J. did ruptured hospitalizations, inter- from a either suffered cealed ap- defendant, them, lower from the when he disk removed vertebral upon, your plied sued ver- in 1956. back for the defendant.” be returned dict shall you that both of instructs “The Court hospitalizations, Memorial word Lee definition of the “used” was 3. The Hospital, opinion Savings Hospital in Provident and White Cross based on Society Exchange ma- in this case to have been Life Assurance v. Bank shown are acceptance 1903, Macon, Cir., 126 to the of the risk F. 360. terial that, company, and if defendant insurance jury. necessary Madden com- The second case how is it not ever, pany representation case not held that prove that a false further con- made with be submitted to the circum in an “ * * * design conceal, or stances ad to have been the evidence scious Although fraudulently men- mits of conclusion than that made.4 no other * * pointed briefs, out there was tioned an intent to deceive argument in this To oral effect are the cases same August Co., statute Rhodes Life Ins. v. dated Cir., 183; v. October and Roosth law until 172 F.2d not become Co., contract. Lincoln An insurance National Life Insurance pol- only apply Cir., 1959, to insurance statute would 269 F.2d 171. subsequent to the effective icies issued In Prudential Insurance Company v. statute, hold we date hence Whittington, (D.C.Ct. Appeal Fla.2nd This applicable in this case. statute 1957), 382, essentially District 98 So.2d according law case must be decided presented. the same prior of Florida it existed Judge Pleus was critical of statute. effective date of the our decision in second Madden case.. *5 concurring Judges The two in the Whit- deciding case, this In must we tington unnecessary case found it to ex- deal v. with Life Ins. Co. press opinion respect an with to the- 446; 1941, Madden, Cir., 117 F.2d 5 Poole case and the second Madden case.. Poole, Metropolitan Life Ins. Co. v. 147 They judgment only”, concurred “in but (1941) ; Fla. So.2d 386 Madden v. 3 did conclude defendant the insur- Co., Cir., 1943, Metropolitan Life Ins. company: ance 984; Pru 151 A.L.R. F.2d “ ** * carried the burden of Company dential Insurance America of proving materiality ques- the of the Whittington, (Fla.App.), v. 98 So.2d falsity asked, tions the of the same applicable other cases. When well as part and the bad faith on the of the before the Madden was this court proof deceased. no was ad- Since 446), (117 first F.2d it was held time plaintiff duced which the- question a answer to seek untrue an jury concluded could false an- ing a fact as to matter material to elicit policy swers in were made in recovery risk, prevented a without to the good faith, no there was issue of given regard was whether answer to go jury, Judge fact to to the and the In intent to deceive. conscious with a should have directed a verdict in fa- appeal after the de Madden the second of vor the defendant.” Supreme Court Florida in of cision reading foregoing cases,, case, felt law a court that the From of the this the Poole changed including case, was and it second Madden we Florida of representation, representation a conclude and hold that concluded then insurance, application policy un though false, for not void the in an whether policy opinion, intent fact or not void with conscious of will made less it was the determination made conscious intent defraud, unless with de- normally ceive, jury matter for the is a intent conscious good 627.01081, “(3) Florida faith Appellant The insurer § cites policy Statutes, issued the or con- either not have F.S.A. omissions, tract, “Misrepresentations, con- have issued or would not facts, premium rate, and incorrect state- or would the same not cealment recovery policy prevent a un- or contract have issued in as- shall ments large amount, pro- or contract unless either: an would not have or der the respect Fraudulent; coverage “(1) or with vided hazard' acceptance loss, resulting if the “(2) true facts- either Material risk, assumed had been made known to the or to hazard insurer as required insurer; either or th& policy or contract otherwise.” undeniably no admits two decide unless the evidence are false. As detriment, (cid:127)other to the matter of conclusion. reliance and opinion it is our that alcoholism or the light foregoing, we must drinking highly of intoxicants is relevant interpret the answers of the decedent to issuance of an insurance agree involved here. We degree and amount of risk “used” word taken in context willing company to take. 8(b) question (“Have you ever used acute, Whether de- chronic some other beverages] them excess?”), [alcoholic gree may n denotesmore than an occasional excessive present, be a alcoholismwas question jury to decide indulgence Savings in alcohol. Provident question jury case. We hold it was Society Exchange Life Assurance v. Bank hospitals here. Visits to for treatment Cir., Macon, 126 F. 360. It is alcoholism or the intoxi- question contended that this calls for strong very on behalf cants opinion applicant, and if an- proposi- of the insurance good faith, swer made question tion that ex- a serious urged would not be vitiated. We are say present. cessive use of To alcohol is conclude, law, as a matter of de- least, company in this 8(b), cedent’s “No” answer to case was entitled to the facts with know especially in view fact that it calls they hospital visits, reference to expression for'an and in facts, prejudiced and it material light submitted, of the evidence the concealment of these facts. law; as a fraudulent matter of and that ques- there was sufficientevidence on this decide the must now W.e tion to submit the issue of this as to whether the concealment *6 decision toas whether the answer by information visits as to good in faith made or not. Mrs. as a mat constituted fraud decedent produced 12 and business friends associ- ques law void in ter of so as to ates, testimony, in addition to her own reasoning of the second tion under the to the effect that the who testified dece- case and the other herein Madden cases dent did not drink “to excess” to their Dictionary, 4th mentioned. Black’s Law knowledge. It is further asserted Ed., 1951, fraud as: defines the fact that the insured visited the two perversion “An intentional hospitals mentioned would not conclusive- purpose inducing truth ly standing show, alone, that the insured upon in part another reliance n “used”alcohol it to excess; that such hos- thing belonging some with valuable pital visits would constitute evidence that legal right ; him or to surrender excess, the decedent did “use” alcohol representation a false of a matter of necessarily but fact, whether words or con- evidence, be bound view of duct, by misleading allega- false or presented. the other In facts view tions, concealment of that our decision as to “No” answer to disclosed, should which have been questions 5(a) 5(f), un- becomes deceives and is intended to de- necessary for us to decide whether the ceive another so that he shall act question 8(b) “No” answer vitiated legal upon injury.” it to his as matter law. may definitions of Further fraud regard to the With “No” an Phrases, found Vol. 17A Words and questions 5(a) 5(f), swers to the rec pp. Gould, Cir., In 5-140. Robbins v. 5 clear, unequivocal, ord contains convinc 116, 1960, necessary 278 F.2d ele- ing and uncontradieted evidence that the categorized of fraud are ments as fol- hospitals visit decedent did the two men lows: and was treated for form of tioned some concerning “(1) a On one he did false statement alcoholism. occasion fact; specific (2) rep- tremens. The answers to these material delirium 794 knowledge deciding rep- not, at least to the

resenter’s extent of great false; (3) an inten- whether he should be resentation is considered too representation tion induce risk for a life that the (4) $100,000.00. it; upon con- amount We another to act sequent injury conclude party representations ques other in answers to represen- acting upon 5(a) 5(f) tions reliance constituted sufficient fraud tation.” within meaning vitiate of the word “fraud” to case, 171, 178, In the Roosth 269 F.2d language policy. In the sec “ substantially the * * * same elements are out- case, ond Madden the evidence lined : than that admits of no other conclusion * * there to deceive intent “(1) A false representation; (2) Co., su Ins. Rhodes v. Life fact; reference to a (3) material 183; Cir., pra, 1949, Dana- 5 172 F.2d knowledge made falsity; with of its 1950, States, Cir., 184 her v. United 8 (4) and (5) deceive; intent to States, 673, 675; v. United F.2d Meadors with action taken in reliance 277, (D.C.E.D.Ky., F.Supp. 1954), 118 representation.” 438); Cir., (Affirmed F.2d 219 Viewing the evidence L. York v. to Mutual Ins. Co. New favorable Life plaintiff permit, Hilton-Green, (1916), as the record 241 U.S. S. will it is 5(a) 1202; clear that questions the answers to v. Ct. 60 L.Ed. United Pence 5(f) false; States, (1942), answers S.Ct. 316 U.S. fact; certainly related to a material 86 L.Ed. 1510.5 decedent knew facts which had so to the issues above men- In addition recently transpired; and he knew that tioned, urgently most con- correct; answers were not and the falsity of the answers to tends policy was issued in reliance 5(a) 5(f) cannot be raised escape answers. We cannot the conclu- alleged was not the same because sion required by the information com- defense of the insurance affirmative intentionally answers was withheld. support pany, 8(a) F.R.Civ.P. Rule answered, When were first following argument, excerpt of this *7 the decedent had been in the White Cross Metropolitan is cited: from answer Hospital period days for a only of 10 Fugate’s months before. His answers disclosed an facts of Fred J. “If the true operation prior on his back several beverages alcoholic to excess use of policy. to the issuance mind, own defend- known to the his made thought may application required by decedent have as ant from, suffering upon, not alcoholism. defendant sued opinion no good There is room about the not have issued faith would in hospital visits. policy, With information and it would not is- hand, hospital premi- visits in the company the insurance at the same sued right policy provides, would have had a to decide and it policy um rate as disagreed it with decedent or have issued such a whether not following is from the 5. The Hilton-Green left no room for con- “His admissions falsity previous jecture case: of the as to the light application, in most favorable “Considered in and of statements knowledge the. quoted possible, falsity. above incorrect of such From these requisite statements are materi- intent to defraud is facts presumed, and, nothing representations; ap- al else and therefore need not be by countervailing pearing, proven if known be untrue as- in absence of made, Materiality when and sured invalidate the reliance were evidence. proof conclusively further of actual in- without con- established design (Citing cases)” proof trial, scious to defraud. at if indeed such troduced following opinion by The is from the needed.” Mr. Justice Jackson in the Pence case: by way receipt large $100,000.- of this evidence an amount in as stating only supplied) it related (Emphasis 00.” representation ques- made answer Metropolitan affirma- is contended It pro- 8(b). 15(b) tion Rule F.R.Civ.P. tively only of the “use issue raised as follows: vides beverages no and to excess” (cid:127)of alcoholic allegation “When issues not raised other; is no that there by express pleadings or true facts tried if the are answer to the effect they implied parties, (cid:127)regarding hospitalization the dece- consent of the respects as if known, shall be treated in all dent were policy. they plead- She raised would not have issued (a) ings. plead- questions 5 of the Such amendment answers (cid:127)claims that the ings may necessary to cause 5(f) in evidence be (cid:127)and were admitted only them to conform to the evidence by the court and (cid:127)considered may de- made they to raise these issues related insofar as is, any any by Metropolitan, party pleaded motion of fense time, judgment; fail- bever- but alcoholic even after “use” of decedent’s ages information ure to not affect so amend does which was excess sought by 8(b). issues.” result of the trial these spirit Counsel for Mrs. insists that fail- Federal Rules object requires pertaining ure to to the evidence (cid:127)of Civil Procedure us to construe questions 5(a) any given 5(f) pleadings cannot be case most strongly construed to mean that pleader. these issues were in favor of the by express implied tried consent. second defense the answer was the We agree do one, with such construed most contentions. affirmative us, strongly clearly From pleader, appears the record before favor of the clear that (cid:127)shows that the mentioned issue rais trying theory the case on the that false ed. The answer states that the com following questions 5(a) recovery 5(f) answers to pany denies on void- “the policy. support- grounds”, ed the conclusion Such followed a statement of the point pressed question 8(b), ed the fact that the here answers a state raised ment relative to the two visits at appeal. time until the case reached us on of alcohol and for treatment from use allegation Company following Vernon Lumber v. Harcen Con- then made: Co., Cir., 1946, struction 155 F.2d 348. “The stated above render false facts 15(b) It should be noted that Rule is not Questions 5(a) “No” the answers terms, unequivocally permissive in its but 5(f) BII in Part BI and Part by express that issues im- states tried application.” plied shall consent be treated as if raised *8 Following quoted excerpt the above is pleadings. the If there been ob- upon presentation of the the defense evidence; jection or if Fu- to such Mrs. Mrs. relies to the which narrow gate attempted receipt, to limit its argued view, In our even if it be issue. duty would have been it the trial 5(a) questions false answers to that the permit an court to amendment. Such an 5(f) separate do not constitute de- and prejudiced would not amendment pleadings framed, as fense under Fugate. case of Watson v. Can- false remains these answers the fact Co., 165 F.2d non Shoe Cir. 311. they whether this court relate before are course, 15(b) not, applica Rule of is and such issue answers another claims, well as to defenses as and to material to the risk of ble deemed to are company. applicable, which it is At the extent it trial the insurance exception objection operates to the rule no the introduc- was there pleaded pertaining not are waived. Moore’s to the defenses dece- tion of p. Practice, 5(a) Ed. 2d In a questions and Federal answers dent’s given case, any placed fact that a defense has not 5(f), limitation nor there ground independent formally if pleaded immaterial as an is of defense. implied by express or The latter reason will be considered first. the issue was tried Cir., Roseberry, 9 Haskins v. consent. pages majority The of devotes several Consequently, we 119 F.2d opinion Fu- to a discussion of Mrs. falsity of the hold matter of the that the gate’s contention affirmative 5(a) 5(f) were questions and answers to pleading Metropolitan upon which the the trial court. before sepa- predicate was tried did not judg- foregoing reasons, independent rate and defense For the (f) and 5(a) Reversed lower asserted and ment of the judgment court false answers to answers, favor and these here Rendered did contend that standing Insurance appellant, Life not related alone and charge drinking, Company. avoid excessive policy. rendered. Reversed and opinion quotes 15(b), Rule F.R. Civ.P., argues that evidence concern- Judge CAMERON, (dissent- Circuit ing 5(a) (f) and objection answers was admit- ing). concludes, ted without pleading I construe the that the respectfully I dissent from the decision present ground did independent majority appellee is barred defense. right opinion This statement from her to recover on this insur- epitomize holding: seems to holding that, ance based its law, falsely as a matter of the insured us, “From the record before fraudulently appears answered clear that the insurance 5(a) 5(f) application. company For trying on the ease reference, convenient theory these are ques- that false answers 5(f) copied margin in the order in 5(a) tions voided they appeared application.1 policy.” This conclusion was ma- reached Nobody knows, assume, I what was in although jority 8(b) question it held that the mind of company. But. properly and its answer were submitted doubt, I beyond think the record shows jury; hold, and it declined pleading by Metropolitan filed law, matter was viti- susceptible was not of such a construction ated the decedent’s answer majority puts as the upon it; and it is. dealing use of al- excessive equally Judge clear that the District cohol. proceed upon theory majority agree deference, Metropolitan. cannot With I with attributes lan- majority’s guage the that, conclusion plea, charge I think because affirmative considering all in of the the answers court and its refusal of the instruc- whole, jury ques- quoted as a majority tion footnote of the that, presented opinion reject tion as to completely whether the thesis guilty application; fraud in his there was politan defense offered Metro- beyond alleged and because in its false answer to pleadings question 8(b) dealing asserted that with the excessive only by rendered beverages; they answers were false its use alcoholic dem- *9 negative ques- answer to questions claim onstrate that answers 8(b) fraudulent, brought 5(a) (f) false and by tion and and were in rely question on the pleading by 5 answers and considered the court and you patient “5(a) past any Have ever been a in reason not men- hospital, clinic, dispensary visited tioned above?” observation, you “8(b) or sanatorium examina Have aver used them [alco- beverages] or treatment?” so, tion holic to excess? If when you “(f) physician, long?” Have consulted and for how practitioner or other healer within the jury solely tending beverages prove as evidence holic to such extent that in- alleged falsity 8(b) patient answer. hospitals sured had been a in two for treatment for alcoholism and had been Substantially the entire Second De- by Rumberg treated Dr. for the results margin copied fense is in the this drinking of “excessive of alcoholic bev- point.2 The entire before the erages.” Only pleading then did the as- upon was based that defense. It seems sert that “The above stated render facts pleading to me clear that this shows 5(a) questions false the ‘No’ to answers company’s plainly sole reliance that ** *” 5(f) added.) Emphasis and Question placed upon the claim language these two 8(b) concerning of al- the excessive use copied pleading, not even in the as was beverages deliberately coholic language question and sub- its falsely by answered and that the insured divisions. appellee’s this false answer barred right death. to recover the insured’s pleading then continued with the scope and mean- construction This statement “If the true facts Fred ing out, of the Second Defense borne Fugate’s beverages J. use of alcoholic by every according my para- known”, policy excess had been made graph in it. would not The final issued. setting the insured paragraph pleading After forth that makes it clear in charging set forth answered footnote, an- the entire “The in aforesaid incorrect statements plead- being copied application swers verbatim upon policy for the sued ing, answers it is asserted that misrepresentations were conceal- Fugate’s had used alco- were false in that insured use ment to Fred J. of facts liability under patient Hospital denies “Defendant in at St. White Cross plaintiff's upon says policy Florida, Petersburg, during sued which con- prevented recovery should be thereunder following grounds, finement was treated Dr. Frank upon to-wit: Petersburg Holecek alcoholism. of St. “Question July in two sheets “Also, No. 8 in he was treated designated Myers Part B I B II and Part Fort Dt. at his in Wilson home application policy Myers Rumberger for the sued is as A. of Fort for the follows: of alcoholic results of excessive beverages. you ‘“8(a) use al- To what extent do í beverages? coholic stated “The facts above render false “ you ‘(b) Questions 5(a) Have ever them to ex- used ‘No’to the answers and 5 long?’ so, (f) how cess? If and for I in B and Part B II of the Part question 8(a) application. “The answer Part ‘Socially light,’ Fugate’s B I and the an- is: “If facts the true of Fred J. beverages swer to the same Part B use of alcohlic to excess had ‘Formerly past II is: None for social. been made known to defendant as re- quired by application 10-11 months.’ policy for the “Question 8(b) is ‘No’ upon, good answered in both sued defendant in faith would Part B I and Part B n. policy, not have issued the and it would “Those answers policy were and are such a not have issued at the same false applicant premium provides, Fred J. as the rate beverages had used alcoholic excess it would not have issued large to such extent $100,000.00. that he been a in as an amount as patient hospitals two for observation “The aforesaid incorrect statements by physicians treatment for alco- sued Specifically, patient misrepresentations holism. he was and a Hospital Myers, Lee Memorial at Fort concealment as to Fred J. Fu- of facts Florida, February gate’s from 24 March beverages alcoholic use to ex- 1958, during which time he was accept- treated cess which were material to the Myers also, Dr. Curtis R. House of Fort ance of the risk defendant and resulting for conditions chronic al- were material to the hazard assumed *10 [Emphasis coholism. the defendant.” added.] “Also, September approxi- from 22 to mately September 30, 1958, he was a * *” beverages to alcoholic excess. in Lee Memorial and Cross Hos- White of [Emphasis pitals policy. the would avoid The re- added.] manifestly fusal of the instruction was not, therefore, quote pleading does upon ground the that had no such issue language 5(a) (f) the of and pleading. company’s been raised the being basis a substantive defense the of rely upon If had desired to upon policy at all. or to the the action the in- defense contained in the refused the denial not make claim that It does the struction, opportunity ask the to had physi- by Fugate of consultations with pleadings that so as to the be amended were, trips of cians or of the to permit reliance defense. anything themselves, to but the material followed, This course and the was not alleged or were of alcohol excessive use proceeded charge jury court in to the independent intended as defenses allegations pleading, line the of with the allegedly policy. action the These Questions is, that that the answers upon in the answers relied false only 5(a) (f) be considered and should charge solely the pleading of as evidence of in the exces- connection defense knowingly concealed that the insured had necessary sive use alcohol. It bewill and, use alcohol his asserted excessive quote extensively to charge from the rather defense, proof was, in as my that this true. to demonstrate that presented the defense charge copied parts are Pertinent of the pleading. by the the court below margin.4 giv- charge of the court Before the question that The record shows without jury, presented the en or ease was below, correctness whose court Metropolitan’s re- had the court refused testing, “try we actions are re- No. which quested instruction margin.3 theory copied instruction that false answers to That case on questions sought 5(f) pol- present 5(a) conten- and voided the Fugate icy.” Moreover, proof record does not dis- the mere that tion that hospitalizations anything knowingly his was done that concealed close * * * applica- you Fugate, both of in that instructs Fred J. “The Court hospitalizations, in Lee Memorial made de- tion for ** * Hospital, question: ceased, Hospital Cross this and in White asked you ma- case to have been do use intoxi- are this what extent shown “To acceptance beverages? cating risk terial company, deceased, he, and insurance answered: So- defendant “And you formerly, socially, that, cially light, that if find from and Fugate, ten, applicant, past know- Fred J. eleven months. for none hospitalizations, Fugate ingly concealed such he said Fred J. “And them, defendant, question: you Have either asked the also your upon, policy them, intoxicating beverages, applied for the sued used ever excess, so, be for verdict shall returned the defend- and if when and for how long? ant.” question: “And he answered the said * * * by Answer, defendant, its “The No. delivery company alleges the issuance of the admits policy insurance “The insurance, admits those answers were are false company proof was furnished to the the said Fred J. used beverages deceased, excess, the death Fred J. Fu- alcoholic payment gate, pa- and that demand that he such an extent had been a hospitals amount has been made in tioo tient observation * * * Fugate, by physicians Lucille and admits treatment al- coholism, life insurance said has treated home paid Myers the amount of said results of Fort excessive plaintiff. beverages. 'drinking of alcoholic way “By alleges defense insurance com- “The defendant further pany says required it should not said payment to make of the amount under was asked in its Fred J. sub sec- you because, question: says, 5(a), of insurance as it tion this Have ever *11 appellee to mislead or the ordinarily express be either implied or Metropolitan’s court. It was defense parties consent of the for the trial of * * * being tried, the burden pleadings issues not raised in the prop- upon plead Implied rested it to its defense usually consent is found where erly develop in such a party and to the record one raises an issue material to the way bring properly party’s it before case, as other where ” * ** court. objection introduced without It appearing that the issue raised case, my This not a by pleading, is, think, equally it I unpleaded which, 15(b), under Rule by clear that there was no consent waiver by brought con- case issue was into the appellee’s arising part recep- on parties. As is stated in from the sent Ed., page Practice, tion, objection, 2d Moore’s Federal without of evidence relat- indicated, must there “As has been ing 847: to the omitted defense. used them to excess? If for to the

applicant, question that Part fendant beverages: Fred J. hazard erages to the statements nection rf* tions icy. made pany, true facts alcoholic company (B-l) stated with reference of the said renders you swered: No. been a other clinic, dispensary servation, swered : No. (a) “The Court further “Relates “To “The defendant “The defendant “Defendant further “And to this “And then “And to this how answers thereto were made policy, consulted * * * known and concealments respective what extent do practitioner acceptance sued long? false the answers patient with excessive 5(f), Fugate’s assumed 8, reading: required by here involved beverages while any examination (a) excess which were then the of Fred Fred J. (B-2) he was further also were —related just any physician, question reason not question defendant insurance not have issued in or visited a times when the answers part respective of the risk or sanitorium alleges referred to. use Question further within the Fugate J. defendant insurance to excess had been alleges application (b) you charges to the or treatment? reading: Fugate’s Have Fred material use of misrepresenta- of facts application that alcoholic so, mentioned? of the same use asked: [i. alleges deceased times when Fugate time defendant. when and e., in con- healer, you treatment in Parts past alcoholic material hospital, alcohol] the de- use if prior Have com- facts ever bev- pol- five an- an- ob- phasis count of as as well as his visit and treatment in the coholic Jcnowledge thereof, with the claimed jury ment treatment the answer of the insured in connection insurance plaintiff connection with Mr. a false answer in $ excess knowingly gave from a that his answer in that used that he knew answered this lied quired used # claims that theretofore, application, excess, the insurance out, answer in the that is, claims that it was misled ance. structed and as the Court has thereto were made “In “On the other “Now, ^[*] j bearing & * facts upon Mr. intoxicating may alcoholic by any the defendant is, £ determining added] intoxicating beverages, * * about in his in St. beverages and of course the defendant whether Mr. preponderance Mr. and circumstances talce into consideration all of time of his answer that he had not this used alcoholic Mr. on ac- institution doctor or * use of alcoholic company beverages Petersburg, Fugate’s, negative; jury beverages hospital he, misrepresentation, hand, is at the time whether he used al- claims he good application by he had to excess and his has during insurance Fugate’s application could not recover. * * * respect claims that had before then if the of the evidence or bad faith of to excess Fugate already respect, at the time he in other answer to the in Fort applicant, and his treat- beverages done the insured’s did, the time in- excess, proved then if he was false. beverages for insur- visit and ” jury company had ever company then the so, Myers, pointed use as the words, [Em- that find his re- in- *12 concerning patient hospitals of the an- a All the in evidence for alcoholics and questions 5(a) by to fraudulently swers insured had concealed these facts. (f) and and of consultation with his company put the But ten on witnesses doctors admissible as was relevant and gave the stand who than one hun- more support of in defense evidence of the sixty pages testimony dred of substan- question beverage alcohol. excessive use tially all which to related the specifically referred affirmative defense of whether insured used alcohol exces- to that the these answers as evidence sively. beyond produced No witness was 8(b) No to false. answer he had doctors nurses stated that and who objection to valid made could have been that ever seen him or heard intoxicated reception re- the of that evidence insured he alcohol to used excess. made. purpose, none was stricted Moreover, and and this had lived in small communities it below restricted the court produce failure to witness purpose answer relied jury. entitled consideration except appellant court’s did not evi- fail find The fact is that I restricting these it. Under action in so support tending to dence in the record circumstances, the court see I do not how nega- Metropolitan’s contention trying the put can in error be below false, question 8(b) was tive answer to pleadings in strict observance case except undisclosed of the two actions to test filed. We are bound testing answer that In visits. in record the trial court questions light in of the answers my ad- case, record, in necessary view the 5(a) (f), it is interpretation. of no mits other signed by in- duplicate applications fact, appears ap- it to me that entirety. in sured their pellant presenting is one is who Metropolitan’s prepared appli- theory form new in its contention us before twenty-nine presented cation it entitled to a directed verdict that was counting separate ground subdivision as a on each the insured’s asserted questions were, turn, Questions question. 5(a) (f) These answers to false eight sections, divided into each divided inde- were sufficient vitiate the extending a line en- pendent the other of excessive use defense tirely The first and across the sheet. This cannot be done under alcohol. appli- had to do with principles second sections well of law settled only present a his- reviewing cant’s state health court will consider tory theory upon The third section illnesses. tried which was dealing questions all propounded eleven revealed the court below applicant ever been whether the record.5 concerning sought - for or advice treated Metropolitan’s affirmative defense of of ail- ailments series eleven different only thing is fraud in individual subdi- Some of these ments. us, which thing before as it was the eight separate dis- visions referred before court below. Whether general very and some were cast eases Fugate practiced fraud must be deter- terms. considering testimony all of mined including record, Immediately relating following the third section all the answers to all of found the six subdivisions application. (section put four). to him in The es- No. (a) Subdivision above, (quoted queried defense was of the affirmative sence Fugate whether applicant patient excessive user of al- had been a in or falsely hospital, clinic, and that he stated cohol visited dispensary or part observation, A the insurance com- not. sanitarium for examination pany’s proof treatment) he had twice been or appliea- each of the two Realty 897, 903-904, 6; Co. v. Commis Weaver F.2d 5. Nelson fn. 5 Am. Revenue, Cir., 1962, Jur.2d, Appeal Error, 546, p. of Internal sioner § negative imply indulgence tions showed a answer to that an occasional query. Yet, strong doctors who wrote down drink. It means to ac- *13 explained righthand customed, practice the answers in the to of. make the * * * applicant syn- column that had two It is a word is which major onymous operations meaning is, besides electrocardio- with—that grams, examinations, periodic X-ray ‘habit,’ or, same with—‘custom’ or check-ups, profession- indulgence.’ physical case, and other in this ‘habitual * * * carry attention, language normally al which as I construe the dispensary. hospital, him questions, to a of sought clinic those defendant has guard against (f) Subdivision ask- the same number to men who any physi- habitually applicant drink, ed if cian, had consulted use and es- ardent <my against practitioner pecially other healer or ever ha- * * who those * above, bitually reason not each mentioned drink to excess. negative Supreme placed doctor after answer The Court of United questions question. All of in the case of Com- States Insurance preceding pany Foley section four and the sections v. 26 L.Ed. [105 U.S. passed practically had to The do illness disease. 1055] with question question, con- answer the crucial decision to same * * * and that cerning beverages ought controlling. to be alcoholic There the light interpreted inquiry was, temper- party of its relation- ‘Is the ship always questions comprising resi- ‘Has ate habits?’ he application. due of the ‘Yes.’ The so?’ The were answers companies contended that in sections six five and tes- that was not true. One witness entirely prior related to such matters as 1872 he and in tified pension applications disability ben- family physician of the in- was the efits, military rejection service ; that at the insured sured that time companies. other life insurance These drinking during hard; was year separated two sections the four sections delirium attended him for he relating to disease sickness and from the tremens, for in- once or twice eighth question. crucial The inclusion produced, thought, disposition concerning query hospital visits intoxicat- excessive use of from the ing drink; physician portion consultation of a regarded him and that he exclusively devoted * * intemperate habits. a man likely suggest diseases would be passing facts on these court in average person were ‘ * * * use of His occasional said jury related to diseases alone—or so the intoxicating liquors not render inferring. would warranted in be habits, intemperate man of him a wording The exact 8 should exceptional of ex- nor would It relates to use alone and observed.. justify application of this cess solely beverage it relates alcohol. '* * * An at- to him. character charging In the court below may some- delirium tremens tack of portion opinion read a this single in- excessive times follow Savings Court in Provident Assur Life * * *” dulgence. Society, supra,6 quota ance and a brief quoted tion from case in which we my there is considerable language approval trial question whether the evidence shows that illuminating: court —is partook beverage ever al- the insured “ * * * adopted The word ‘used’ cohol When that term is em- to excess. purpose especially of this ployed, does in connection with Reported holding Co., La.App. 598, (1929), at 126 F. 360. Its Insurance general 147; See, g., in line Life Ins. with the rule. and Penn Mutual e. 122 So. pp. 1279, seq., (1936), Nunnery, annotation in 26 A.L.R. et 176 Miss. Co. v. and Brennan v. National Life & Accident 167 So. 416. thoughts “used,” turn instinc- caused the had lessened or verb tively one’s ceas- drinking, to those who ed. to social enough “tight” get in order imbibe forget testimony, therefore, His wife’s con- everybody; troubles; to love their doctors, firmed some extent af- away, drive to dissolve dull care trips firmed two themselves into ecstacies. “using result, Fugate’s not of Fugate drank, way cer- beverage alcohol”, taking That is not the but of alco- tainly life latter of his pain, hol as a medicine lessen *14 supposed episodes excessive two of admittedly suffering. he was joined place. had of He use alcohol took any doI not find that testified witness March, his wife and the church in insured had ever made excessive he no convivial stated that beverage. of On the use alcohol as a every home He at after that. remained hand; or witnesses other a dozen more any night belong not to social and did contrary. gave testimony of to Two back was his club. He drank when Fugate’s partners of and one business hurting dull him and in an effort prac- foremen, him his tically all of day; saw whom pain. from For several he suffered president every of the vice op- disc, ruptured vertebral which bank, him, open loans which made pain The continued on erated in 1956. personal with contact constant who was hospitalizations took both until after investigations Fugate made had and testimony indi- place. of doctors neighbor alcohol; use of about his he that, occasions cated approximately was located whose home fifty drinking, told he appeared been Fugate’s sixty home feet from his so to alleviate that he had done them pain. drink had an occasional with and who constantly him, was close him and saw wife, pain According had his to his enough anything went if unusual hear excruciating was com- that he so been heavy home; of a salesman on still and pelled to and could not sit walk a number sales equipment who made time, the doctor At one comfortable. be investigated his and to the deceased standing his one of prescribed elevation including community, his shoes. alcohol; non to the use addiction vel fishing companion, respect and to the With to the deceased’s visit White testimony gave Hospital, positive Cross where alcoholics were dozen others half treated, trip they known him drink this had never made the in- his never heard of own instance.8 Mrs. took and had sured’s to excess un- alcohol. The chief and use of him the doctors did excessive him, who desire that visit but she for she derwriter night file, every him admitted with on the tele- all talked studied had nothing good phone found but favorable and him normal and file contained concerning spirits. the insured and al- comment twelve-page retail re- credit cohol. took him to Before she Cross White friends, containing port statements drinking steadily Hospital had he neighbors of the and associates business hours four five because of the about dispute that no- without showed deceased pain. to that time he had Prior excessive body had heard knew or in one two After he a drink weeks. drinking by the insured. hospital, from the he never returned death, Judge until another drink his took The case was tried below a pain spirits long who, many experience fine and decades, Relative, Fugate, shoe] to the White realized “Q. his he that he was Hospital you getting tell if from acquired lift Cross us will he decided relief Fugate’s up going what to Mr. he had led there? taste al- quit. Well, “A. after Dr. treated him wanted It House cohol [Emphasis him [elevation added.] and advised about lift Ms oion idea." acquainted respect way; had held the of those the other dead, judge his services state who with .court are not here answer them- Judge. selves, height work United States District it would be the of in- case, justice At the trial cruelty, conclusion to disturb their jury: ashes, court stated to sanctity and violate the grave, unless the fraud you one of “I want to thank each clear, beyond a reasonable doubt.” jurors serving on this respectfully for the close Court attention I dissent. gave you this observed that case. sup- your verdict, course, And evidence, ported by sufficient evi- ” * ** dence briefly out- The evidence which I have coupled

lined, fact *15 applied he after the insurance importuned his home three agent who times four DISTRIBUTORS, STERLING INC., out should stressed take he Appellant, subject to the constant because v. working heavy machinery, hazard of UNITED America, STATES of business, I think his line which was Appellee. trial points soundness No. 19393. jury. court’s statement United States Appeals Court of questions of fraud It is axiomatic Fifth Circuit. jury normally This decision. are 13, Feb. 1963. * * * “Fraud is once Court said:9 define; there no absolute is difficult fraud; facts constitute to what rule as provide law one ‘lest does and the ” This, may ingenuity avoid it.’ knavish me, typical case for the seems foregoing recognition I rule. wisely below acted court think question to the it submitted the to set verdict declined its aside. note of this fails to take All universally accepted fact that fraud must convincing clear

be established asserting party it has and the proving reasonable it with

the burden

certainty by preponderance of convinc- Story ing Mr. Justice ex- evidence.10

pressed memorable words in the idea in 481, Gratz, 6 5 Prevost v. Wheat.

L.Ed. 811: ought

“Fraud, trust, or breach of lightly imputed to the liv- legal ing; presumption Producing Co., Union 9. White et al. v. v. Jemison Commissioner Cir., Internal Cir., Revenue, 4; F.2d F.2d Co., v. Lincoln Roosth National Life Ins. F.2d 5 Cir.. 1959. 269 171. 179.