Pence v. United States

• Decision Date: 11 May 1942
• Docket Number: No. 665,665
• Citation: 86 L.Ed. 1510,316 U.S. 332,62 S.Ct. 1080
• Parties: PENCE v. UNITED STATES
• Court: U.S. Supreme Court

316 U.S. 332

62 S.Ct. 1080

86 L.Ed. 1510

PENCE

v UNITED STATES.

No. 665.

Argued March 11, 12, 1942.

Decided May 11, 1942.

Mr. William B. Collins, of Milwaukee, Wis., for petitioner.

Mr. Richard H. Demuth, of Washington, D.C., for respondent.

Mr. Justice JACKSON delivered the opinion of the Court.

This action was begun in the United States District Court for the Eastern District of Wisconsin by the petitioner, a widow, as sole beneficiary of a policy of United States Government life insurance issued to her deceased husband, Doctor Lawrence W. Pence. The only contested issue was raised by the Government's affirmative defense that the policy had been reinstated as the result of fraudulent representations in Doctor Pence's application for reinstatement of the policy after it had lapsed for nonpayment of premium.

At the close of the evidence in the trial court the Government moved for a directed verdict in its favor. The trial judge withheld a ruling on the motion under Rule 50(b) of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, and submitted the case to the jury, which returned a general verdict for the petitioner. The Government then moved under Rule 50(b) for judgment notwithstanding the verdict, and, in the alternative, for a new trial. The trial judge denied both motions and entered judgment on the verdict for the petitioner. The Government appealed to the Circuit Court of Appeals for the Seventh Circuit, which held, with one judge dissenting, that the evidence was insufficient to establish a case for the consideration of the jury and that there was no independent ground requiring that a new trial be granted. It reversed the judgment of the District Court and remanded the cause for further proceedings in harmony with its opinion. 121 F.2d 804. We granted certiorari. 314 U.S. 602, 62 S.Ct. 185, 86 L.Ed. —-.

Petitioner contends that the evidence raised a question of fact for the consideration of the jury, and that the decision of the Circuit Court of Appeals therefore denies her the right to trial by jury.¹

Doctor Pence had been a physician and medical officer in the military service of the United States from August 7, 1918, to January 9, 1919. While in the service he obtained a $10,000 policy of yearly renewable War Risk term insurance, which he allowed to lapse on March 2, 1920, for nonpayment of the premium due on February 1, 1920. In 1925 he gave up a private medical practice to accept employment as a physician with the Government, acting thereafter as a specialist in eye, ear, nose, and throat diseases at various veterans' hospitals and homes maintained by the Government. On June 21, 1927, Pence applied for reinstatement and conversion of the lapsed term policy. The policy was accordingly reinstated and converted, effective July 1, 1927; and, except for the question of fraud,² was in force at the time of his death on September 21, 1934.

In this application for reinstatement Pence categorically denied, among other things, that he had ever been treated for any disease of the throat, heart or stomach. So also did he deny that since the lapse of the policy he had consulted any physician in regard to his health, or had been ill or prevented by ill health from attending to his usual occupation.

At the trial there was submitted in evidence a communication from the Regional Medical Officer at Sioux Falls, South Dakota, to the Manager of the Veterans' Administration in Milwaukee, Wisconsin, and dated Decem- ber 9, 1931. This reported that a gastro-intestinal X-ray examination had been made of Pence at the Sioux Falls Veterans' Hospital on April 6, 1925, and had resulted in a diagnosis of 'suspected duodenal pathology.' Pence made several statements, subsequent to the reinstatement of his insurance and in support of claims for disability benefits from the Government, that this examination had been made at his request. Mrs. Pence admitted that she knew that such an examination had been made.

About fifteen months after his application for reinstatement, and on August 27, 1928, Pence applied to the Government for disability compensation, claiming that he was disabled by chronic sinusitis, ethmoiditis, atrophic rhinitis, and by myocarditis. On September 7, 1928, he executed and submitted a sworn statement in support of his application for disability compensation that he suffered from the following disabilities: 'sinusitis, frontal, ethmoiditis, chronic, atrophic rhinitis, chronic, with loss of sense of smell, myocarditis, chronic * * * incurred * * * on or about October 1918.' He also stated 'That a physician was called in to treat me on Jan. 1927, when he pronounced my disability sinusitis, frontal, acute exacerbation and prescribed serum and local treatment tending to induce drainage. Treatment was carried out by myself. Was confined to bed for 8 days.' Together with this he submitted a supporting 'Physician's Affidavit,' by Doctor L. Grant Glickman, a practicing physician stationed at the time of the asserted examination at the National Home at Leavenworth, Kansas, where Pence was stationed; and employed at the time of the trial by the Veterans' Administration at Fort Snelling, Minnesota. ³

In 1931 and 1933 Pence made statements in support of other claims for benefits similar to those set forth above in that they contradicted the representations made in his application for reinstatement involved in this case. On November 28, 1931, he submitted a statement in support of an application for retirement, to the effect that in 1918 a camp physician by whose authority he remained in barracks under special care while in service examined his heart and told him it was 'shot'; that he had acute myocarditis and a severe gastric upset which 'turned out to be a forerunner of duodenal ulcer which perforated in 1920 and again in 1925'; and that because of distress and certain symptoms he later requested a gastro-intestinal examination at the Veterans' Bureau office at Sioux Falls, South Dakota. He concluded his statement: 'I never had a day of sickness in my life before this and I do not believe I have had an entirely well one since.' On December 8, 1933, he submitted a sworn application for pension for disability resulting from active military service, stating that since the beginning of service one civilian physician had treated him for sinusitis and myocarditis; and four others for sinusitis alone. One of the latter examinations was stated to have been made by Doctor Glickman in 1926, and another was stated to have been made at a time after the lapse of the policy in suit.

Doctor Glickman was produced at the trial as a witness for the Government, in whose employ he still was at the time. The trial judge ruled out as improper, questions by petitioner's counsel bearing upon the question whether disciplinary action had been taken against Glickman and others because of the execution of affidavits in support of Pence's claim for disability compensation and other of his claims. Upon being asked whether he had an independent recollection of the examination referred to, he stated that he had copies of 'records', but not the 'originals.' The Government's attorney then asked: 'Well, Doctor, do you have a recollection of your examination—refresh your recollection of your examination of Dr. Lawrence Pence in January, 1927.' Glickman answered 'I do.' The Government could not locate the record of the treatment made on Glickman's report as officer of the day—apparently the only record made of the treatment—and it was not produced at the trial.

Glickman testified further as follows: Pence called upon him for treatment on January 16, 1927, while he was acting as officer of the day. He concluded that Pence was suffering from sinusitis and ethmoiditis. Pence knew what his findings were, and stated that he was suffering from a recurrence of a chronic condition. Glickman treated Pence at Pence's home on two or three occasions between January 16 and January 25. Mrs. Pence was at home then, although perhaps not on all occasions. Pence had no cold, but Glickman prescribed a cold serum for him, and also some argyrol packs.

Mrs. Pence testified, however, that: She had no knowledge that her husband had consulted a physician. She was close to him, and constantly with him, and believed that he would have told her of anything seriously the matter with him. He never told her, however, of consulting a physician, or that he suffered from sinusitis, ethmoiditis, or myocarditis. Her husband led an active, vigorous, life, and was never confined to bed except by occasional colds, and suffered from no other sickness. It appeared from her testimony, however, that she was unable to differentiate between a 'cold' and a sinus infection.

Pence's two sons and two friends also testified to his active life and apparent good health.

With the evidence in this condition, the Circuit Court of Appeals held that the District Court erred in refusing to withdraw the case from the jury.

The Government, which the Circuit Court of Appeals held was entitled to a directed verdict, had the burden of proof on the issue of fraud. Under the circumstances we have recited, the credibility of Doctor Glickman, its witness, was clearly for the jury. The evidence of the gastrointestinal examination was likewise insufficient to sustain the direction of a verdict. We assume without deciding that the jury could not have refused to believe that such an examination had been made. Yet the jury could have properly refused to deduce from this all the necessary elements of the defense of fraud, established by our decisions to be: (1) a false representation (2) in reference to a material fact (3) made with knowledge of its falsity (4) and with the intent to deceive (5) with action taken in reliance upon the representation.⁴

The case of the Government for a directed verdict rests, therefore, upon the statements of Pence made after the reinstatement of his...