John Hancock Mut. Life Ins. Co. v. Yates

Docket Number24220.
Decision Date08 February 1935
Citation179 S.E. 239,50 Ga.App. 713
PartiesJOHN HANCOCK MUT. LIFE INS. CO. v. YATES.
CourtGeorgia Court of Appeals

Rehearing Denied Feb. 27, 1935.

Syllabus by Editorial Staff.

Generally contracts are to be governed as to their form, validity, and effect by laws of place where they are made (Civ. Code 1910 § 8).

Mode of procedure, character, and extent of remedies on contract sought to be enforced, and rules of evidence are governed by law of state in which action is instituted.

Manner in which question of materiality of representations made by insured in application for life policy is to be determined is matter affecting remedy only, and not validity, form, or effect of contract, and is controlled by law of place where action is brought and not place where contract was made.

Where insurer's agent incorrectly records answers in application for life policy as to matters material to risk after being informed as to true facts by applicant agent's actual knowledge will be imputed to insurer, estopping it from asserting invalidity of policy because of incorrect statements.

Statement in application for life policy that applicant is in good or sound health is not a warranty on part of applicant that his health is absolutely perfect.

Insured's representation that he was in sound health at time life policy was applied for and issued does not authorize avoidance of policy by insurer unless insured had knowledge that he was in bad health or circumstances were such that should have led him to that conclusion.

Term "sound or good health," as used in life policy, means that applicant or insured has no grave impairment or serious disease, and is free from any ailment that seriously affects general soundness and healthfulness of his system.

Whether fact that insured had indigestion troubles in March, April, and May of 1932, and died from cancer of intestines in June, 1932, rendered life policy applied for and issued in May, 1932, void, where insurer's agent had been informed of insured's indigestion troubles, held for jury.

Where action on life policy is defended on ground that insured made misrepresentations of facts material to risk, burden of showing materiality of representations and their falsity is on insurer.

Whether life policy applicant who, shortly before making application, had gone to physician for treatment for indigestion falsely represented facts material to risk in answering questions as to previous illness and as to consultation with physician in negative held for jury, it not appearing to physician that applicant was suffering from any serious or dangerous ailment such as affected his general health, especially where applicant stated true facts to agent who recorded answer in negative.

Limitations on insurer's agent's authority contained in life policy apply only to matters occurring subsequently to issuance of policy.

Where life policy applicant covenants that statements to medical examiner are true, and statements are made part of policy, variation material to risk will avoid policy, whether statements were made in good faith or willfully and fraudulently.

Whether applicant's statements in application for life policy are material to risk depends on whether knowledge or ignorance of facts to which statements relate would materially influence insurer's action (Civ. Code 1910, §§ 2479-2481, 2483).

If insurer's soliciting agent had notice that insured was not in good health but nevertheless life policy was issued and delivered and premium accepted by insurer, presumption existed that insurer waived condition avoiding policy in event of insured's illness at time of application and delivery of policy.

Applicant for life policy correctly answering questions propounded by soliciting agent is under no duty to afterwards examine application and policy to ascertain on what representations policy purports to have been issued.

Error from City Court of Carrollton; J. J. Reese, Judge.

Action by E. K. Yates against the John Hancock Mutual Life Insurance Company. Judgment for plaintiff. Defendant's motion for new trial was denied, and he brings error.

Affirmed.

Smith, Smith, & Bloodworth, of Atlanta, and Boykin & Boykin, of Carrollton, for plaintiff in error.

Smith & Millican, of Carrollton, for defendant in error.

Syllabus OPINION.

SUTTON Judge.

1. While it is true that it is the general rule that contracts are to be governed as to their form, validity, and effect by the laws of the place where they are made, that is, by the lex loci contractus (Civil Code, § 8); it is also true that the mode of procedure, the character and extent of the remedies on the contract sought to be enforced, the rules of evidence and so on are governed by the lex fori, that is, the law of the state in which the action is instituted. Chamblee v. J. B. Colt Co., 31 Ga.App. 34, 119 S.E. 438; Davis v. Melton, 46 Ga.App. 639, 168 S.E. 320; Beck & Gregg Hardware Co. v. Southern Surety Co., 44 Ga.App. 518, 162 S.E. 405.

(a) "The materiality of representations made by the insured in his application, under the laws of Georgia, is a question for the jury to decide. The manner in which this question shall be determined, being a matter affecting the remedy only, and not the 'validity, form, or effect of the contract,' is to be controlled by the lex fori, and not by the lex loci contractus." Massachusetts Benefit Life Ass'n v. Robinson, 104 Ga. 256 (8), 30 S.E. 918, 919, 42 L.R.A. 261.

(b) The law of New York is that when a life insurance policy is delivered to the insured, he must read it (or have the same read to him), and the application forming a part thereof, and if the application does not contain correct answers to the questions asked by the agent of the insurer, the insured is under a duty to so inform the insurer and have the same corrected, and when he fails to do this a recovery will not be permitted, in an action on the policy by the beneficiary against the insurer, even though the insurer's agent was informed of the facts and incorrectly recorded the answers of the applicant. Minsker v. John Hancock Mutual Life Ins. Co., 254 N.Y. 333, 173 N.E. 4, 81 A.L.R. 829; Travelers' Ins. Co. v. Pomerantz, 246 N.Y. 63, 158 N.E. 21. In this case it is undisputed that the insured visited a physician four times during April, 1932, prior to his death in June of that year, when he was suffering from indigestion, and that the application shows that the question as to whether he had received medical advice during the past five years was answered in the negative. Under the New York law, as pronounced in the above decisions, a recovery could not be had by the beneficiary on this policy. However, under the law of this state, a different rule prevails. Our decisions hold that while an insurance policy will be avoided where the applicant therefor has made false answers as to matters material to the risk in the application for the insurance, such as to previous illness, soundness of health at that time, etc. (Southern Surety Co. v. Fortson, 44 Ga.App. 329, 161 S.E. 679); yet where the agent of the insurance company incorrectly records the answers of the applicant to questions propounded in the application as to matters material to the risk, after being informed by the applicant as to the facts, the agent's actual knowledge thereof will be imputed to the insurer and it will be held to be estopped from asserting the invalidity of the policy because of such incorrect statements as to material matters. National Casualty Co. v. Borochoff, 45 Ga.App. 745 (1), 747, and citations, 165 S.E. 905, 907; Southern Surety Co. v. Fortson, 46 Ga.App. 265 (1, 2), 167 S.E. 335.

2. A statement in an application for an insurance policy, that the applicant is in good or sound health at that time, is not to be construed to be a warranty upon the part of the applicant that his health is absolutely perfect. Massachusetts Benefit Life Ass'n v. Robinson, supra, 104 Ga. 256 (10), 30 S.E. 918, 42 L.R.A. 261. Under the facts of this case, the policy sued on was not void as a matter of law because the applicant stated that he was in good health, when he had informed the insurer's agent that he had had indigestion and when the physician who treated the applicant did not inform him that he was afflicted with a dangerous or deadly malady, the physician not being able to determine this from the applicant's condition, and it not appearing that the indigestion suffered by the applicant seriously impaired his physical state or system in any way, but it appearing however, that the applicant worked every day and seemed always to be in good spirits and health up to the time he went to the hospital for an examination of his condition in June, 1932. It is essential that the insured should have knowledge that he was in bad health or that there were circumstances which should have led him to that conclusion, in order for a policy of insurance to be avoided by the insurer, in this state, on account of the representation by the insured that he was in sound health at the time the policy was applied for and issued, when in fact he was suffering from a malignant malady in an incipient form, from which he died shortly after the policy was issued. The term "sound or good health," as used in a policy of life insurance, means that the applicant or insured has no grave impairment or serious disease,...

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