COHEN, FRIEDLANDER & M. CO. v. Massachusetts MLI Co., 10469.

• Decision Date: 17 May 1948
• Docket Number: No. 10469.,10469.
• Citation: 166 F.2d 63
• Parties: COHEN, FRIEDLANDER & MARTIN CO. v. MASSACHUSETTS MUT. LIFE INS. CO.
• Court: U.S. Court of Appeals — Sixth Circuit

166 F.2d 63 (1948)

COHEN, FRIEDLANDER & MARTIN CO. v. MASSACHUSETTS MUT. LIFE INS. CO.

No. 10469.

Circuit Court of Appeals, Sixth Circuit.

February 5, 1948.

Writ of Certiorari Denied May 17, 1948.

George R. Effler, of Toledo, Ohio, for appellant.

Ross Shumaker, of Toledo, Ohio (Fraser, Shumaker, Kendrick & Winn, of Toledo, Ohio, on the brief; Ross W. Shumaker and John W. Winn, both of Toledo, Ohio, of counsel), for appellee.

Before SIMONS, ALLEN, and McALLISTER, Circuit Judges.

Writ of Certiorari Denied May 17, 1948. See 68 S.Ct. 1086.

McALLISTER, Circuit Judge.

Appellant corporation and its president, Hyman Blitz, made application, on August 29, 1945, to appellee insurance company for an insurance policy upon the life of Blitz, to be payable to the corporation as beneficiary. The application, which provided that it should form the basis of the contract of insurance applied for and which also provided that it should become part of the contract when issued, set forth and represented, in answer to questions relating to his physical condition, that Blitz had never had any symptoms of heart trouble, or suffered from heart disease. These representations were true, or, at least, true as far as appellant and Blitz were aware. On August 30 and August 31, 1945, he was examined at the request of the insurance company by two physicians designated by it, and neither of the examinations disclosed any heart defects or disease or other health defects affecting the insurability of Blitz.

Neither the annual premium on the insurance nor any part thereof was paid to the insurance company or its agent at, or prior to, the time that the application was made on August 29, 1945. Such premium was paid at the time the insurance company delivered the policy of insurance to appellant corporation on September 19, 1945.

However, on September 12, 1945, one week prior to the delivery of the policy to appellant and payment of the premium therefor, Blitz suffered a severe heart attack, known as angina pectoris with coronary thrombosis. Five days after the first attack and two days before the payment of the premium and the delivery of the policy. he suffered another similar attack. During the period between these attacks, he was in a critical condition under the care of physicians.

During the period from the time when the application for the policy was filed on August 29th, until September 17th, the date of Blitz's second heart attack, the insurance company was making an investigation of facts disclosed by the periodic health examinations of Blitz which were referred to in the application for insurance. On September 17th, these investigations were completed and disclosed no evidence of heart diseases or defects or any other health defects. Two days later, the policy was delivered to appellant company and it was at that time that the annual premium on the insurance was first paid by appellant. A little more than six months later, Blitz died as a result of a third heart attack on March 31, 1946.

When the policy was finally delivered, the insurance company knew nothing of any disease or illness suffered by Blitz during the intervening period between the time of the application for the policy and its approval and delivery by the insurance company. It acquired its first knowledge of the several heart attacks on or about April 18, 1946, when it received the notice of claim and proof of death of Blitz which was filed with the insurance company by appellant corporation. After an investigation of the facts thereby disclosed, the insurance company served notice of cancellation and rescission of the policy and tendered to appellant the amount of the premium which had been paid, with legal interest from the time it had been received. Thereafter, the insurance company filed a complaint to cancel and rescind the policy. After hearing, the district court entered a judgment decreeing the policy of insurance to be null and void on the ground that good faith required the appellant, pending approval of the application for insurance, to disclose any conditions affecting the risk that occurred subsequent to the application for, and prior to the issuance of, the policy; that appellant had knowledge that Blitz's heart attacks occurred in this intervening period; that such circumstances affected the insurability of Blitz and the risk contracted against; that in contracts of insurance, uberrima fidis — "the most perfect good faith" — was required of the parties to the contract; and that appellant's non-disclosure of the pertinent facts showed a want of such good faith, and required cancellation of the contract of insurance.

The question before us is one of law. Appellant claims that the parties contracted on the basis of conditions as they existed on the date of the application and medical examination made by the physicians employed by the insurance company; that the insurance company agreed that the insurance would take effect as of a date prior to the time when appellant acquired knowledge of the change in the physical condition of Blitz; and that, since it was provided...