121 F.2d 104 (D.C. Cir. 1941), 7643, Eureka-Maryland Assur. Co. v. Gray

Docket Nº:7643.
Citation:121 F.2d 104
Case Date:June 16, 1941
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

Page 104

121 F.2d 104 (D.C. Cir. 1941)




No. 7643.

United States Court of Appeals, District of Columbia.

June 16, 1941

Argued March 13, 1941.

VINSON, Associate Justice, dissenting.

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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.


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 inadmissable, 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

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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 section 2 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...

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