March v. Metropolitan Life Insurance

Insurance — Life insurance — Misrepresentations in application — Act oj June 23, 1885. Under the Act oi' June 23, 1885, P. L. 131, a misrepresentation or untrue statement in an application for insurance, if made in good faith, does not avoid the policy unless it relates to some matter material to the risk. Where the materiality of a statement to the risk involved is itself of a doubtful character its determination should be submitted to the jury. Questions in an application for life insurance relating to insurance in other companies, to the rejection of the applicant by other companies and to the attendance by physicians are all material to the risk, and it is error to submit the question of their materiality to the jury. The act of June 28, 1885, has nothing to do with such questions. An applicant for life insurance was asked the question: “ Have you ever spit blood:’” To this he answered “No,” without any qualification. The evidence showed that he had had an expectoration of blood which was so great as to amount to a hemorrhage. Held, that the question was falsely answered and that the jury should have been so instructed. In an action upon a policy of life insurance, it appeared that the application for the policy contained certain questions and answers as to health. The company presented a point to the effect that the concealment of a serious ailment by tire applicant was a fraud upon the company’s rights. The court affirmed the point with the qualifying remark, “ If those questions were asked.” Held, that the company was entitled to an unqualified affirmance of the point, as the added remark only tended to confuse the jury- In an action upon a policy of life insurance where it appeared that the insured in his application concealed the fact that he had consumption, the company is entitled to an unqualified affirmance of a point to the effect that if the insured had consumption at the time of the delivery of the policy, the company is entitled to a verdict. As the insured could not be ignorant of the presence of the disease, and as the question is material and the answer a warranty, the court should not include in the answer to the point the element of knowledge and the intentional concealment by the assured. In an application for a policy of life insurance on a wife, a question was: “ Are you now insured!’” The answer was, “ No.” The application was signed by both husband and wife, and the policy was payable to the husband. The husband acknowledged that the answer was false; that he had already taken out another policy on his wife’s life, and that he had paid all premiums ou it. Held, that the husband was not entitled to recover, even though the wife was without knowledge of the first insurance. In an action on a policy of life insurance, where it appears that the insured in her application had slated that she had no serious ailments; that she had not been attended by a physician, and that she had not been-rejected' by any other company, and the uncontradicted evidence shows that these answers were absolutely false, it is the duty of the trial court to direct a verdict in favor of the insurance company.

Appeal, No. 19, Jan. T., 1898, by defendant, from judgment of C. P. Delaware Co., Dec. T., 1897, No. 47, on verdict for plaintiff. Assumpsit on a policy of life insurance. Before Clayton, P. J. The facts appear by the opinion of the Supreme Court. The court charged as follows : This is an action on a policy of insurance upon the life of the wife of the plaintiff. [It is sufficiently proved that she is dead, and, if there has been no false representations made which are material to the risk, the plaintiff is entitled to recover.] [1] There is a distinction between a mere representation, made for the purpose of securing a policy, and a warranty. A representation in the law of insurance is an incidental statement made by the insured with regard to some feature of the risk upon the faith of which the contract is entered into. It is no part of the contract, and need not be literally, though it must be substantially true. It differs from a warranty in that to avoid the policy in case of its falsity it must be a fact material to the risk and must be either wilfully false or grossly negligent in character. If there is a misstatement made, if there is a representation made that is really untrue, yet, if it was made in good faith it does not void the policy, although it may be material to the risk, unless the representation is so grossly negligent that the jury, or, under the evidence, the court would hold that the insured ought to have known the truth of his statement. Now, as I understand this policy by its terms, it makes all the representations warranties. The policy states that it is agreed, that it is hereby declared agreed to be a warranty, or by the undersigned that the answers and statements contained in the foregoing application, and those made to the medical examiner as regard any of the parts A and B of this sheet, together with this declaration, shall be the basis, and taken to be a part of the contract of insurance with the Metropolitan Life Insurance Company, and that they are lull and true, and are accordingly regarded, and that no information or statement not contained in this application received or acquired at any time by another person shall be binding upon the company or shall modify or alter the declaration and warranties made in this application. That is what is called a warranty. . . . If it is a warranty it makes no difference whether it is true or false, it is warranted to be true and, although the party making it believes it to be true, if it is false, it makes no difference, the warranty avoids the policy if it is false, whether material or not. Now the effect of that law was so unjust that our legislature changed it, and they have materially altered the common law as to the effect of a warranty in a policy of insurance. By the Act of Assembly of June 28,1885, P. L. 134, it is declared “ whenever an application for policy of life insurance contains a clause of warranty of the truth of the answers therein contained, no misrepresentation or untrue statement in such applications made in good faith by the applicant, shall effect a forfeiture or be a ground of defense in any suit brought upon any policy of insurance issued upon the faith of such application, unless such misrepresentation or untrue statement relate to some matter material to the risk.” Without that act of assembly they would have worked a forfeiture whether they were known to be true or not true. By this act of assembly these warranties will not avoid the policy unless the false statement or misrepresentation, if made in good faith, is material to the risk; and that is the only difference between the common-law warranty in a policy of insurance and the warranty as it is now and as it exists under our act of assembly. I therefore charge you, gentlemen of the jury, that every question contained in this application and answered by the insured, if the answer was made in good faith, whether it was true or not, will not work a forfeiture of this policy of insurance unless the statement is made upon some subject which is material to the risk, and if it is, then it will have the effect of avoiding the policy. [This policy also declares that no suit shall be brought in any court except in the courts of New York. I charge you, gentlemen, that this being a foreign insurance company, it has no right to do any business in the state of Pennsylvania, under a heavy penalty, ■without first complying with an act of assembly which requires it not only to designate a person who shall be authorized to receive the service of process for it, but it is also required to file an agreement that process may be served anywhere in this state upon that agent, and that that is a waiver upon the part of the company of its right to insist upon this suit being brought in New York.] [7] • [Now having brushed away those technicalities, we will come down to the real issue iii the case, and there is but one real issue contained in it; that is, if any false representation or warranty has been made, were they material to the risk? That is the question, as I understand it, although I announce this with some doubt, because my first impression was that the materiality, where the facts are undisputed, would be for the court, but as I understand the decision of the Supreme Court, as read by the counsel in the case, the question of materiality is for the jury. Of course you will not find against the evidence, if that is all one way, and where you are satisfied from the evidence that the fact stated was material, that is to say, that if that representation had not been made this policy would not have been issued; if you find there were false representations made and they were material to the risk, then under the act of assembly I am bound to charge you that whether the insured knew it or not, if they were material, they are warranties and she is bound by them, and if they are false and material there can be no recovery. The great question, therefore, for the jury to consider is the materiality of these statements.] [2] [Now, it is held by the counsel for the defendant, that the first material question asked the insured, and which was answered in a negative was, “ Are you insured in any other company ?” And the representation, as it is written in answer to that question is, “ no.” The defendant alleges that that was a material misrepresentation, and it will be for you to say whether it was, and you will decide whether it was, under all the surrounding circumstances. It might be material in one sense and it might be immaterial in another. If the company, when they asked that question, received the answer, “yes,” it might have induced them, if the insurance was not completed, to believe that the person had already been examined, and then it was a good risk. Now they want the information for some reason, and if the answer had been “ yes ” instead of “ no,” it may be that it would have been favorable to the insured, that is to say, they might reasonably suppose if the applicant had passed an examination in some other company that it could not hurt them. If some other company had to pay the premium, and if the other had passed her, then we may. But that is only one view of it. Another view of it might be that if she had said “ no,” they might then say, “ well, we must be more particular in regard to this applicant and we must make a closer examination.” I say that may be. It may be that if she said “yes,” and gave the name of the company, though I believe, that in giving the answer to that question the name of the company is not required, they might go to the company and make some inquiries relative to it, or if that was answered “yes” it might be followed before they issued the policy by the inquiry “what other company did you insure in, how much was the policy, and are you over insured.” So, under the surrounding circumstances of the case it will be for you to say whether it is material to the risk, that is to say, whether that answer had anything to do with inducing these people to give her a policy of insurance. So much for that. I will leave that, therefore, to you to say whether that was a material representation, because there is a great number of questions which are asked here, and I suppose they take it for granted that they were all material, but it will be for the jury to say whether they are or not, under all the circumstances of the case.] [3] Now as to the second question, which was, “Are you now insured?” Then comes the question, “If so, in what company or association ? ” And then, “ For what amount ? ” “ How much has been granted during the past year; enumerate each, and if insured in this company state the policy and number?” Now then the answer to that is “None.” It seems, however, that she had an insurance in two other companies, but the allegation is that they were not valid because they were not made by her, and that she did not know they were made. It appears that they were made by her husband, and the allegation is that in this insurance no medical examination was required ; on the other hand, it is alleged that a medical examination was required in one. You have the evidence, and the whole thing will be for you, for if she was over-insured, that might be a reason to decline to insure her, because, if there was an over-insurance, there would be an interest for the beneficiary in terminating the life of the insured, and it makes the risk greater if there is an enormous insurance; it might indicate that there was danger that the insured might be permitted to die for the purpose of the beneficiary securing the policy, and insurance companies are very property cautious about insuring persons who are over-insured; insured to an unreasonable amount. You are to consider all ’these questions, and pass upon the materiality of that answer. Then as to the next question. That question is, [“Have you made applications and been rejected, or has any insurance company, etc., declined orally or in writing to insure you?” And to that question she has answered, “No.” Well, now, according to her husband’s testimony, she did not know that he had taken out these policies ; they seemed to be not very large, upon her life, and if that answer was material to the risk, and was false, the policj' is forfeited, but I take it it is for the jury under all of the circumstances to say whether it was material.] [4] Now, we come down to the question of her complaints. The question was asked, “ Have you had consumption ? ” and she says “no.” Now under all the evidence it may be doubted whether the woman ever had consumption as meant by the word here used, and I charge you that this word means consumption in the ordinary and proper sense of the word, and not according to its technical meaning, or as doctors would use it. As it is used here, it means consumption of the lungs, a disease which is known to everybody as being a disease of the lungs, by which they gradually decay, and the person eventually dies from loss of tissue caused by the failure of circulation in the lungs, or by the tubercules becoming decayed and falling in, causing cavities in the lungs. I charge you that it relates to pulmonary consumption and not consumption of the bowels, kidneys, or any other part of the system. She answered “no ” to this question, and it will be for you to say whether the answer was true or false. You have heard the testimony of the doctors who have been called in this case. The doctor who examined her for this very policy said she had no signs of consumption, and I take it for granted that you will take his evidence as being of more weight than that of those who examined her before or afterward. He says that everything he did was done property, and that he examined her, although he has no particular recollection of the case, but that whatever he said in his record is true, and he says she was in good health. Even Dr. Cohen does not say that she had consumption, but that she had threatened consumption, and he said that her condition was doubtful, that she might get well or run into consumption, and it is for you to say whether that is a false representation. You will, of course, consider what Mr. Starr and all the other witnesses say upon the subject. It is for you to weigh the testimony. Dr. Starr says he told her that she had consumption. He says he was not examining her as a physician, but that he was examining her as the medical agent for the company in which insurance was aslced to be taken, and it may be that he thought she had, and yet it may be that she had not, because it appears that when she died, so far as the evidence goes, she died from meningitis, and that she had sound lungs. The testimony of the physician who attended her was that she died from meningitis superinduced by a running down of the system, and perhaps she had consumption or decay of the bowels ; that may be, but there is no question in regard to that disease among the many questions here asked. It will be for you to say therefore whether that was a false representation or not. [Then we come to the question, “ Have you ever spit blood.” To which she answered “no.” Now the evidence seems to be that she said that in her younger days she had had hemorrhages, and I charge you, this is to be strictly construed against the company. And if they wanted to know whether she had hemorrhages they ought to have asked her that question, and not whether she spit blood. It is not necessary, implying that spitting blood is a hemorrhage. A hemorrhage is a rupture of a vessel full of blood, and spitting blood may be applied to colored mucus coming from the lungs or throat and indicates consumption, while hemorrhages do not always indicate consumption, but the spitting of blood referred to here does; that is, where the mucus is soiled with blood, then it indicates a diseased condition of the lungs, and that the mucus is coming from the lungs, and it indicates consumption. You must consider all these things and say whether that was a false representation or not, but it seems to me, it would be material.] [8] [The fifth, which is to my mind the most serious of them all is, “ Give full particulars of any illness you may have had since your childhood.” Now that is a sweeping question. “And name the medical attendance or attendant? ” Now that is certainly a sweeping question; to a certain extent it is an unreasonable question to ask a person who is twenty-six years old to state everything she has had and every medical attendant, is asking a great deal. The one that asks these questions I suppose took the answers. I do not know. In whose handwriting are these written? Are they in Dr. Johnson’s? Mr. Schaffer: It so appears, yes, sir. The Court: She answered, and whatever her answer was, he wrote it down. “ Have had but slight ailments, not needing a physician.” That was her answer. Now it appears, as a matter of fact, that she had serious ailment; that she had been in the hospital; that she was threatened with consumption, and she had been, according to most of the testimony, in a delicate condition for a good while. It does not appear that she had many physicians; she may not have considered Dr. Cohen as her physician, but he was. He was the hospital physician, and she was there; and if you find that this was material to the risk, and it seems to me that this answer was, then, if it was false, this policy is void and there can be no recovery. Now, you will consider all the evidence upon that. You will consider the questions put by Dr. Johnson. It is hardly to be supposed that he would just ask the questions, and put down an answer; but the supposition is that the examining physician not only asks the questions, but that he would try to have her understand and give intelligent answers. Now, here is the answer in writing, she has signed it, and she has made that warranty, and if it is material, it appears not to have been truly answered, and if it is material to this risk, it is a forfeiture rendering the policy void and there can be no recovery. It is my duty to say that to you as the law, whatever sympathy you may have had for the woman or for her husband, this, according to law, gentlemen, and you must find your verdict according to the evidence as it is delivered to you from the witness box, and you are not to decide these questions according to your sympathy. If you find that that was a material representation, and that it was false, I charge you there can be no recovery.] [5] [Now the sixth is : “Name your usual medical attendants.” Now, that seems to me might be got over, because I take it that that applies or might have been understood by her as applying to the medical attendance at that time. For she is asked what medical attendance she had before, and she tells who her family physician is, the name and residence “ of your usual medical attendants.” She says it was Dr. Stoever; that appears to be true. The seventh question is, “ When and for what have his services been required ? ” And the answer is, “ In confinement.” That seems to be true. That was all he was attending her for. “Have you consulted any other physician, and if so, when and for what? ” Now, I would take that as applying to the present time, that is while Dr. Stoever has been their family physician. “ Have you consulted any other ? ” If you see fit to give it that construction you can do so, but you have no outside evidence upon that subject, and at that time she does not appear to have had any other physician. Dr. Ulrich attended her at another time, but it was before that. He was called in to attend her while she was having some trouble, and he cured it. He says that there was displacement of the uterus, what we commonly call falling of the womb, and that she recovered from that and bad children afterwards, and it seems to me that it is a question of materiality for you. You may, perhaps — well, I will permit you to pass upon that question without giving any opinion upon it. To my mind the most serious question in the case is the one in which she says she has never had any but slight ailments and not needing a physician. If you find that that is material to the risk, then it voids the policy.] [6] Defendant’s points and the answers thereto were as follows : 1. Under all the evidence the verdict must be for the defendant. Answer: I decline to so charge you. [9] 2. If at the time of the delivery of the policy in the suit the decedent, Mary H. March, was not in sound health, by which it is meant that she was suffering from or afflicted with any ailment which naturally tends to shorten life, and frequently terminates fatally, and that fact was not communicated to the company defendant, then it was a fraud upon their rights, and the verdict should be for the defendant. Answer: If those questions were asked they were material, and if she answered them falsely, the verdict should be for the defendant. That is my answer. [10] 3. If at the time of the delivery of the policy now in suit the decedent, Mary H. March, was suffering from any ailment which affected the system seriously, and was the foundation of a grave, important or weighty trouble, then the verdict should be for the defendant. Answer : If these questions were asked and she answered them falsely, I hold that they were material, and affirm the point. [11] 4. ■ If at the time of the delivery of the policy in suit the decedent, Mary II. March, was suffering from an ailment, which if known to the defendant would have caused the rejection of the risk or the exaction of a higher rate of premium, then the failure to communicate it to the company was a fraud upon the company, it is not bound, and the verdict should be for the defendant. Answer: If she knew there was such an ailment, and the question Avas asked and she concealed it, this point is affirmed. [12] . 5. If at the time of the delivery of the policy in suit the decedent, Mary II. March, was suffering from phthisis pulmonalis, tuberculosis or consumption, which afterward contributed to her death, then she was not, at the time of the delivery of the policy in suit, in sound health as required by the provisions thereof, and your verdict should be for the defendant. Answer: If you find she had any of these diseases (the evidence is for you), and if she knew it and concealed it when she was asked to reveal it, this point is affirmed. These questions would be material to the risk. [13] 6. As the application for the policy in suit states that Mary H. March, the deceased, was not then insured in any other company or companies, and the proofs of death and the uncontradicted evidence showed that she was so insured in other companies, then there can be no recovery, and the verdict should be for the defendant. Answer: Affirmed; but if you believe gentlemen that the policy was taken out by her husband without her knowledge, and that she did not sign the application, then I decline to affirm that point. [14] 7. If Mary H. March, the deceased, spat blood, or had an habitual cough, or if she had a physician attending her for lung trouble before the application for the policy in suit was made, then there can be no recovery, and the verdict should be for the defendant. Answer: I say to you, gentlemen, that if she had those troubles, they were material to the risk, and if she made false representations on that subject, the policy is void and the verdict should be for the defendant. An habitual cough does not mean a cough contracted from a cold. It does not mean a cough which comes on at times, it means a cough that is the normal condition of the patient, a cough that is chronic, a cough that has become a habit. It does not mean a cough that a person has when he lias-a cold, but an habitual cough is what is referred to. The evidence on that subject will be for you. [15] 8. If Mary H. March, the deceased, prior to the date of the policy in suit, had been attended by a physician for a serious disease which materially tends to shorten life, or which contributed to her death, there can be no recovery, and the verdict should be for the defendant. Answer: If the facts set forth in this point are true, and she was asked upon that subject, and she knew or ought to have known it, and answered falsely, it was material to the issue, and as it was material to the question, the point is affirmed. I do not hold, gentlemen, that a person who has some secret disease, not known to himself, and that could only be ascertained when he was dead and dissected, that for him to state he had no such disease, would be such a false representation as would void the policy and there could be no recovery from it. It would be a disease he had and might to know that he had from the nature of the disease, from the surrounding circumstances. That is what I mean by saying, if she knew, or if she ought to have known, it is the same thing as if she knew. [16] Verdict and judgment for plaintiff for $1,087. Defendant appealed. Errors assigned were (1-16) above instructions, quoting them.