American Nat. Ins. Co. v. Herrera

• Decision Date: 14 January 1963
• Citation: 211 Cal.App.2d 793,27 Cal.Rptr. 641
• Parties: AMERICAN NATIONAL INSURANCE COMPANY, a corporation, Plaintiff and Appellant, v. Antonio HERRERA et al., Defendants and Respondents. Civ. 6592.
• Court: California Court of Appeals Court of Appeals

Page 641

27 Cal.Rptr. 641

211 Cal.App.2d 793

AMERICAN NATIONAL INSURANCE COMPANY, a corporation, Plaintiff and Appellant, v. Antonio HERRERA et al., Defendants and Respondents.

Civ. 6592.

District Court of Appeal, Fourth District, California.

Jan. 14, 1963.

Docker & Docker and James H. Perkins, Fresno, for plaintiff and appellant.

Hugh Wesley Goodwin, Fresno, for defendants and respondents.

COUGHLIN, Justice.

The decisive issue on this appeal relates to the effect of a provision in an industrial family insurance policy that it shall take effect only if the insured, his spouse, and his dependent children, all of whom are covered thereby, are in sound health at the date of issuance.

Two such policies of insurance were issued by the American National Insurance Company, the plaintiff, cross-defendant and appellant herein, to Antonio Herrera, one of the defendants, cross-complainants, and respondents herein, and to his wife, Feliz Herrera, following receipt of written applications therefor, which also contained a sound-health provision similar to that noted above; each policy provided for payment of designated amounts upon proof of death of the insured or the insured's spouse, and each contained the foregoing sound-health provision. Five months after issuance Feliz died. Mr. Herrera filed a claim under both policies. The insurance company refused to pay the same, claiming that Mrs. Herrera was not in sound health at the time of issuance, and also that she and Mr. Herrera had given false answers to certain health questions in their respective applications. In the meantime Mr. Herrera had assigned part of the prospective proceeds from these policies to other persons. Thereafter, the insurance company brought this action against Herrera and his assignees to effect a rescission of the policies, and the latter, by cross-complaint, sought recovery thereunder. As an incident to its request for rescission, the plaintiff deposited the premiums paid, together with interest thereon, with the clerk of the court, for payment to the defendants. After trial before a jury, and the receipt of an advisory verdict in favor of the defendants, the court found that Mrs. Herrera was not in sound health on the date the policies were issued, and that the answers to the health questions contained in the subject applications were false, but that none of the parties had knowledge of either of the foregoing facts; denied rescission; and awarded judgment against the plaintiff on the cross-complaint.

The insurance applications, which are dated August 19, 1959, were prepared by agents of the insurance company after consultation with Mr. and Mrs. Herrera. The latter were Spanish speaking people who were not able to speak, read or write English. One of the agents spoke Spanish fluently and acted as an interpreter on the occasion in question. The findings of the trial court are predicated on an acceptance of the testimony of Mr. Herrera as to what occurred at this time, and on a rejection of the testimony of the agents relating a contrary version thereof. Under the general rule, we must accept that testimony which supports the judgment, insofar as it constitutes substantial evidence, and the facts hereinafter set forth are stated in adherence to this rule. (Thomas v. Hunt Mfg. Corp., 42 Cal.2d 734, 736, 269 P.2d 12.)

Each application contained similar questions respecting the health of each insured, which the agent purportedly translated for and read to the Herreras. Among these were the following:

(1) 'Do any of the persons to be included have physical or mental defects?'

(2) 'Have you or any dependent to be included ever had any of the ailments listed?'

including among others, rheumatism, arthritis, cancer, high or low blood pressure, and heart disease. The answer to each of these questions, as written by the agent on the applications, was 'No.' Mr. Herrera testified that he and his wife were asked whether either of them 'had' or 'suffered from' heart disease or cancer, to which he replied that he did not know, and that his wife made the same reply. The applications also contained the following: 'List below all causes for which you or any dependent to be included have consulted a doctor in the last five years' and the answer thereto, as written by the agent, was 'None.' Mr. Herrera stated that he was asked to tell all causes for which he or any dependent to be included in the policies had consulted a doctor in the last five years; he replied that his wife had gone to a hospital because of a cold; and his wife said the same thing. They did not say that she had consulted a doctor.

No medical examination of either applicant was required, the policies being issued in sole reliance on the information contained in the written applications.

The evidence shows without conflict that Mrs. Herrera went to the Fresno County Hospital on August 15, 1957, which was two years before the applications in question were signed, and gave a history of heart fluttering whenever she would lie on her left side, which commenced 11 years before and continued without change; of irregular and fast heart beats whenever she would lie on her left side; of blackouts when lying on her left side; and of taking medication for the past seven years. A week later she returned to the same hospital and reported that she still had the same trouble from lying on her left side and also gave a history of frequent sore throats and frequent joint pains when she was young. On August 10, 1959, which was 9 days before signing the subject applications, Mrs. Herrera again went to the Fresno County Hospital; complained of increasing palpitation in her chest for the past two months; also complained of a sharp pain under her right breast which radiated around to her side; and indicated that the pain was relieved by lying down. Two weeks later, which was the day the subject policies were issued, Mrs. Herrera, who then was 36 years of age, again went to the hospital, told the doctor that she had rheumatic fever at age 21, which lasted for three months; said she felt reasonably well after that, but had 'heart trouble' during pregnancy the next year; stated that at age 23 she began to have shortness of breath which had increased since her first visit to the hospital in 1957; and also related having occasional chest pains. The foregoing facts are established by the hospital records; the information given and recorded therein could have been obtained only from Mrs. Herrera; and the correctness of their contents are not denied.

The court found that Mrs. Herrera 'had in fact suffered from rheumatic heart disease and that she had had heart fluttering and other symptoms of such heart disease, and that on or about August 10, 1959 she had been aware of physical difficulties resulting therefrom and had received treatment at various times therefor, and that she had seen and had been examined by a licensed medical doctor at the General Hospital of Fresno County'; and also found that she 'was not in fact in sound health at the time of the execution of the applications for said policies, or at the time of the issuance of said policies, and that she was at said time suffering from rheumatic heart disease with atrial fibrillation, mitral stenosis and regurgitation, angina pectoris and acute dilation of the heart due to endocarditis of mitral and tricuspid valves.' These findings are supported by the diagnoses appearing in the hospital records, which were made at the time of Mrs. Herrera's visits to that institution, and by other medical evidence. Any other findings would have been contrary to the evidence. However, the court also found that neither Mr. nor Mrs. Herrera knew that she had the diseases in question, and concluded that because of such lack of knowledge the insurance company was liable under its policies even though Mrs. Herrera was not in sound health at the time of their issuance, and even though the answers to the questions in the subject applications, which heretofore have been considered, did not truthfully or completely relate the facts sought to be obtained thereby. The trial judge filed a written memorandum opinion in which he set forth his conclusions and indicated that in reaching the same he relied upon the rationale in the case of Brubaker v. Beneficial etc. Life Ins. Co., 130 Cal.App.2d 340, 346, 278 P.2d 966, and the decisions in Bankers Indem. Ins. Co. v. Indus. Acc. Comm., 4 Cal.2d 89, 92, 47 P.2d 719; Wills v. Policy Holders Life Ins. Ass'n., 12 Cal.App.2d 659, 665, 55 P.2d 920; Irving v. Sunset Mut. Life Ins. Co., 4 Cal.App.2d 455, 459, 41 P.2d 194; Weiss v. Policy Holders L. Ins. Ass'n., 132 Cal.App. 532, 23 P.2d 38; Pacific Employers Ins. Co. v. Arenburst, 85 Cal.App. 263, 266, 259 P. 121, and other similar cases. The court also found that issuance of the subject policies with knowledge that Mrs. Herrera had gone to the hospital because of a cold, constituted a waiver of any claim of reliance upon the sound-health provisions therein, or upon the alleged misrepresentations made by Mr. and Mrs. Herrera.

The insurance company has appealed from the judgment entered, contending that the sound-health provisions in question and the findings of the court in the premises relieved it of any liability under the subject policies; that the evidence establishes as a matter of law that the answers given to the health questions contained in the applications for insurance were knowingly false; that no waiver occurred; and that the court erred in refusing to permit it to introduce a certified copy of the coroner's investigation which contained a statement allegedly made by Mr. Herrera who, in response to the question: 'Has Mrs. Herrera been ill or seen a doctor recently?' purportedly replied: 'Yes, for a long time she has been sick with Rheumatic heart and Dr. Tahan has been treating her, but he has not seen her for about three months.'

A provision in a life insurance policy that...