Benson v. Bankers Life & Cas. Co.

• Court: Colorado Supreme Court
• Writing for the Court: DOYLE; HALL, C. J., and MOORE
• Citation: Benson v. Bankers Life & Cas. Co., 362 P.2d 1039, 147 Colo. 175 (Colo. 1961)
• Decision Date: 03 July 1961
• Docket Number: No. 19398,19398
• Parties: Floyd S. BENSON, Plaintiff in Error, v. BANKERS LIFE AND CASUALTY CO., a Corporation, Defendant in Error.

Page 1039

362 P.2d 1039

147 Colo. 175

Floyd S. BENSON, Plaintiff in Error, v. BANKERS LIFE AND CASUALTY CO., a Corporation, Defendant in Error.

No. 19398.

Supreme Court of Colorado, In Department.

July 3, 1961.

David B. Richeson, Denver, for plaintiff in error.

Weller, Friedrich & Hickisch, William H. Hazlitt, Denver, for defendant in error.

DOYLE, Justice.

The parties will be referred to as they appeared in the trial court where plaintiff in error was plaintiff and Bankers Life and Casualty Company was defendant. The action sought recovery on a policy of health or medical payment insurance issued March 4, 1958 whereby defendant agreed to pay medical expenses in consideration of the payment by plaintiff of monthly premiums.

The claim alleges that in November of 1958 plaintiff underwent operations which cost $1,153, which operations it is alleged were within the coverage of the insurance contract. Defendant refused to pay.

In its answer, defendant alleged that plaintiff applied for two policies of insurance, one a family medical and surgical policy and the other a preferred family hospital plan; that plaintiff's answers to questions in the application were false and that the policies were issued in reliance thereon.

The false statements contained in the application here pertinent are these: To the question whether the plaintiff had ever been turned down or restricted in attempts to get insurance, the answer was 'no.' To the question whether he had ever had a nervous breakdown or mental illness, the answer was again 'no.' He also answered 'no' to the question whether he had ever had appendicitis, and to whether he had ever had any physical checkup not mentioned. The truth was that plaintiff had been denied insurance in 1945, had had a nervous breakdown requiring hospitalization at the State Hospital at Pueblo in 1937; had had an appendectomy in 1920, had had colonic trouble, and had been in at least two auto accidents. He had fallen and broken his breast bone in 1933 and on another occasion he was gassed in a boiler room.

Plaintiff also answered that he had no other insurance when in fact he had a Blue Cross policy at that time.

He answered 'yes' to the question whether he understood and agreed that the company 'is not bound by any knowledge of, or statements made by, or to any agent, unless set forth herein.'

At the trial plaintiff testified that defendant's agent, a Mr. Emmot, had filled out the application for him and had told him that the company was only interested in his medical history for the past five years. Emmot denied ever making such a statement which was contrary to the provisions of the policy itself. On cross-examination, plaintiff admitted that he had had some undisclosed illnesses during the period of five years previous to the application for this insurance. It appeared that he had been treated by a doctor for minor accidents during the period of 1952 to 1955.

The trial court found:

'That said insurance policy was issued to plaintiff upon an application signed by plaintiff, but which was filled in by the agent for the defendant in response to the agent's questions to the plaintiff.

'That at the time of the application, agent orally informed plaintiff that illnesses occurring five or more years previous to application were of no importance to the policy herein.

'That the subject matter of the misrepresentations as shown on the application herein in no way contributed to the illness for which plaintiff seeks recovery under this policy.'

Thereafter the matter was taken under advisement and finally recovery on the policy was denied and an order was entered for judgment in favor of the plaintiff in the amount of $88.20 which represented the premiums paid. Apparently the court concluded that the facts as found were not legally pertinent and that defendant was entitled to avoid the policy.

1. The primary issue for determination is whether a misstatement of an insurance company agent that the company is interested only in illness which occurred within the previous five year period, which statement is contrary to the express terms of the insurance contract, is binding upon the company so as to require that the policy be upheld and enforced notwithstanding the falsity of the information contained therein.

C.R.S. '53, 72-1-25 provides in part:

'* * * but no statement or declaration made to or by an agent, examiner or other...