Eureka-Maryland Assur. Co. v. Gray, 7643.

• Citation: 74 App. DC 191,121 F.2d 104
• Decision Date: 16 June 1941
• Docket Number: No. 7643.,7643.
• Parties: EUREKA-MARYLAND ASSUR. CO. v. GRAY.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

74 App. DC 191, 121 F.2d 104 (1941)

EUREKA-MARYLAND ASSUR. CO. v. GRAY.

No. 7643.

United States Court of Appeals for the District of Columbia.

Argued March 13, 1941.

Decided June 16, 1941.

W. Gwynn Gardiner and James M. Earnest, both of Washington, D. C., for appellant.

Richard R. Atkinson and Thurman L. Dodson, both of Washington, D. C., for appellee.

Before GRONER, Chief Justice, and MILLER and VINSON, Associate Justices.

GRONER, C. J.

This is a suit on an industrial life insurance policy. The important clause is as follows:

"No obligation is assumed by the Company prior to the date hereof, nor if within two years preceding such date the Insured has been a patient at, or an inmate of, any institution for the treatment of physical or mental disease, or has undergone any surgical operation, or has been attended by a physician, unless it shall be shown by the Insured or any claimant that no such institutional, surgical, or medical treatment or attention was for a serious disease, injury, or physical or mental condition; * * * unless reference to such institutional, surgical, or medical treatment or attention * * * is endorsed on this Policy by the Company.

* * * * * *

"This Policy contains the entire agreement between the Company and the Insured, and the holder and owner hereof; * * *"

On the trial, the beneficiary proved that the policy was issued April 11, 1938, the premium paid, and that death occurred in Gallinger Hospital about two months later as the result of "rheumatic heart disease with congestive failure", and rested. Admittedly, there was nothing on the face of the policy to show that insured had ever suffered any illness or had ever had the attention of a physician. The insurance company attempted to prove through Doctor Horn, a practising physician in Washington, that he had treated the insured at weekly intervals during the period between December 25, 1937, and June 6, 1938, the date of her admission to the hospital, and also to prove through the hospital intern the hospital records showing the history, diagnosis, and treatment of insured and the autopsy report. These records, if admitted, would have shown that at the time of admittance to the hospital the insured had stated that since 1937 she had experienced shortness of breath and had tired easily; had ceased working January 1, 1938, and had then consulted her family physician, who had treated her regularly thereafter; that she had been in bed intermittently since January, 1938, and some years previously had been treated for syphilis and for rheumatic heart disease and pulmonary tuberculosis. On objection of counsel for the plaintiff that the evidence tendered was privileged, and was also barred under the provisions of Section 183, Title 5, of the District of Columbia Code,¹ the trial court, for either one or the other reason, struck from the record the evidence of Doctor Horn and held the hospital records inadmissible, and directed a verdict for the plaintiff.

The two questions for decision involve, first, the interpretation of Section 183, Title 5, and its relation to Section 181b of the same title and, 2nd, Section 20, Title 9, of the District of Columbia Code.

First. Section 183 provides: "Each life insurance company, benefit order and association doing a life insurance business in the District of Columbia shall deliver with each policy issued by it a copy of the application made by the insured so that the whole contract may appear in said application and policy, in default of which no defense shall be allowed to such policy on account of anything contained in, or omitted from, such application."

The written application — assuming there was one — was admittedly not delivered with or attached to the policy. If the effect of the statute precludes any defense in such circumstances, that ends the case. But the contrary of this was decided by the Supreme Court in Washington Fid. Ins. Co. v. Burton, 287 U.S. 97, 53 S.Ct. 26, 77 L.Ed. 196, 87 A.L.R. 191. There it was held that where the policy definitely declares that it constitutes the entire agreement between the parties — as is the case here, — the insurer, notwithstanding its failure to deliver a copy of the application, is entitled to interpose such defenses as would have been open to it if no application had been made. The Court said at page 100 of 287 U.S., at page 27 of 53 S.Ct., 77 L.Ed. 196, 87 A.L.R. 191: "The section 183 does not require written applications to be made or declare that, where one is made but not delivered with the policy, there shall be no defense based on the provisions of the policy itself. And no reason is suggested in support of a construction of the section that would prevent defense based on a provision of the policy, even though a similar or the same provision were contained in an application."

In view of this construction of the statute by the Supreme Court, we are obviously compelled to hold that there is nothing in the section which prevents or obstructs the insurance company from making any defense that it has under the terms of the policy, and this leaves only the question whether the subsequently enacted Section 181b in any degree modifies or changes the law in this respect.

The latter section² by its terms applies to cases where payment of the policy is refused because of "unsound health" at or prior to the date of issue of the policy. The forfeiture clause in the present policy is conditioned upon proof that insured had been a patient in a hospital or had undergone a surgical operation or had been attended by a physician for a serious disease or injury and had failed to disclose the facts. But we think the difference immaterial. The obvious design of the statute is to make its terms applicable in all cases in which the defense is that the insured had suffered prior to the issuance of the policy either a serious injury or disease and had concealed the truth from the insurer. The words — unsound health — in the statute cover the several specific grounds named in the policy, and the effect of the section is to shift the burden of proof and to make the good faith of the applicant or the insured — as to the representations on which the policy issues — the test, and by its terms to impose on the insurer the burden of proving the contrary.

Second. The admissibility of the hospital records which the lower court excluded presents a more difficult question. In the District of Columbia there is a statute³ which provides that "no physician or surgeon shall be permitted, without the consent of the person afflicted, or of his legal representative, to disclose any information, confidential in its nature, which he shall have acquired in attending a patient in a professional capacity and which was necessary to enable him to act in that capacity * * *".

In this case the proffered testimony, consisting of hospital records, would have shown that the insured when the policy was issued was suffering from heart disease; that she had received treatment for this from a physician for four months prior to the issuance of the policy; and that she had previously been treated for syphilis and for rheumatic heart disease and pulmonary tuberculosis. We think the rejection of this evidence by the court was correct and was required under the express provisions of the statute. The witness who was offered to prove the records stated that the information came from the lips of the patient. His duty as intern in the hospital required him to obtain it for the records and for use of the attending physician. Counsel for the insurance company argue that an intern, not then licensed to practise, is not a physician within the terms of the statute and, therefore, the information given him by the patient in response to his queries — if proper background for the same is shown — is admissible. But the argument, in view of the language of the statute, is not persuasive. True enough, the cases in other jurisdictions differ. Among those which in more or less similar circumstances hold the records admissible are Prudential Ins. Co. of America v. Kozlowski, 226 Wis. 641, 276 N.W. 300; Frederick v. Federal Life Ins. Co., 13 Cal.App.2d 585, 57 P.2d 235; Southwest Metals Co. v. Gomez, 9 Cir., 4 F.2d 215, 39 A.L.R. 1416; First Trust Co. v. Kansas City Life Ins. Co., 8 Cir., 79 F.2d 48. Some of those holding the information inadmissible are Culver v. Union Pac. R. Co., 112 Neb. 441, 199 N.W. 794; Stalker v. Breeze, 186 Ind. 221, 114 N.E. 968; Metropolitan Life Ins. Co. v. McSwain, 149 Miss. 455, 115 So. 555; Meyer et al. v. Russell, 55 N.D. 546, 214 N.W. 857. And there is a general discussion of the problem in the annotation in 75 A.L.R. 378; also see Hale, Hospital Records as Evidence (Jan. 1941), 14 So. Calif.L.Rev. 99. These differing views may be summarized in the statement made in the Gomez case that if public policy demands that the privilege of the physician or surgeon should be extended to nurses or other attendants who are neither physicians nor surgeons, the change should be made by the legislature. Whereas in the Culver case the court remarked that a nurse is often necessarily present at conversations between patient and physician and little good would be subserved if the lips of the doctor were sealed by statute but the nurse or attendant standing by might be free to testify.

The local statute is very broad. It forbids disclosure by the physician of any information obtained by him in his professional capacity. The intern is himself a physician. He is a graduate of a medical school with a doctor's degree, though, it may be, not licensed to practice his profession in the ordinary way by so holding himself out to the public. But it is common knowledge that a part of his duty is to get the medical history of the patient, and in this respect he is the attending physician. Not only this, but in many instances he does the work of the physician and, in other respects, relieves the...