American Cent. Life Ins. Co. v. Bott

• Decision Date: 01 April 1921
• Docket Number: No. 10779.,10779.
• Parties: AMERICAN CENT. LIFE INS. CO. v. BOTT.
• Court: Indiana Appellate Court

76 Ind.App. 439

130 N.E. 432

AMERICAN CENT. LIFE INS. CO.

v.BOTT.^*

No. 10779.

Appellate Court of Indiana, Division No. 2.

April 1, 1921.

Appeal from Circuit Court, Floyd County; John M. Paris, Judge.

Action by Margaret Bott against the American Central Life Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Stotsenburg & Weathers, of New Albany, and Woolen, Cox & Welliver, of Indianapolis, for appellant.

Charles W. Schindler and Charles D. Kelso, both of New Albany, for appellee.

McMAHAN, J.

This appeal is from a judgment in favor of appellee on a check issued to her by appellant, she being the beneficiary in a policy of insurance, issued by it on the life of her husband, he having died with such policy presumptively in force.

Appellant filed an answer admitting that on November 6, 1919, it drew the check mentioned in the complaint for the sum of $1,000 payable to the order of the appellee; that said check was as it purported on its face to be, in full for all claims under a certain policy theretofore issued by it on the life of one John Bott and which was terminated October 27, 1919, by his death; that said check was delivered to appellee November 8, 1919, and deposited by her for collection, and in due course was presented to the bank on which it was drawn for payment, but that the bank on notice and order from appellant refused to pay the same.

The answer then alleged that the insured, John Bott, prior to the time when he made application for insurance, was suffering from certain diseases; that he then and for several years prior thereto had been receiving a pension from the United States government from and on account of physical disability, which facts were well known to the insured but were unknown to appellant until after the execution and delivery of said check; that the said disability of the said insured, and the fact that he had consulted physicians with reference to said disabilities and was drawing a pension, rendered him unfit as a risk for life insurance. It is then alleged that the insured, for the purpose of deceiving appellant and inducing it to issue said insurance policy, falsely and fraudulently stated in the application therefor that he was not suffering from any of the named disabilities, had not consulted or employed a physician for himself, and had never applied for and secured a pension on account of any disability, which statements it is alleged were false and known to be false by the insured when made, and were made for the purpose of procuring such insurance; that appellant did not learn of the falsity of such statements until November 10, 1919, after the delivery of said check, whereupon it stopped payment on said check and notified appellee that it would not be bound by said policy or said cheek, and that it on said day tendered and offered to pay appellee the amount of the premium paid on the policy with interest, which sum it paid into court for the use of appellee.

A demurrer for want of facts having been sustained to this answer, appellant excepted, and, refusing to plead further, judgment was rendered against it for the amount of the check.

Appellant contends that the court erred in sustaining the demurrer to this answer, and in support of this contention says that it is fundamental that statements made by an applicant in his application for life insurance relating to his health and physical condition are material to the risk and if false avoid the policy, and that where the knowledge of such fraud did not come to the insurer until after it had issued its check, such facts would be a good defense in an action upon the policy, or would be sufficient on which to base an action to recover the money paid on such policy.

Supreme Lodge v. Miller, 60 Ind. App. 269, 110 N. E. 556,Iowa Life Ins. Co. v. Haughton, 46 Ind. App. 467, 87 N. E. 702, and Fidelity, etc., Ass'n v. McDaniel, 25 Ind. App. 608, 57 N. E. 645, cited by appellant, were actions based on the policy itself, and not on a check voluntarily issued by the insurer in payment of the policy, without any demand by the beneficiary as appears to have been done in this case, and are not of controlling influence.

Centennial Mutual Life v. Parham, 80 Tex. 518, 16 S. W. 316, was an action by the insurance company against the appellee who was the beneficiary in a policy of insurance issued on the life of his wife. The action was brought on the theory that the policy was obtained through false representations made by the insured in her application, breach of warranties contained in the policy, and fraudulent combination between the insured and appellee to thus obtain the policy, as well as false and fraudulent statements made by appellee after the death of his wife for the purpose of securing the payment of the insurance.

In National Life Ins. Co. v. Minch, 53 N. Y. 144, the beneficiary in the policy was the husband of the insured, and it was charged that he and his wife entered into a conspiracy to procure the issuance of a policy of insurance on the life of his wife in his favor, knowing at the time that she was suffering from an incurable malady, and that after the death of his wife the beneficiary made false and fraudulent statements as to...