Cardwell v. United States

• Decision Date: 17 January 1951
• Docket Number: No. 13264.,13264.
• Citation: 186 F.2d 382
• Parties: CARDWELL v. UNITED STATES.
• Court: U.S. Court of Appeals — Fifth Circuit

186 F.2d 382 (1951)

CARDWELL v. UNITED STATES.

No. 13264.

United States Court of Appeals Fifth Circuit.

January 17, 1951.

H. O. Williams, San Angelo, Tex., for appellant.

O. Morris Harrell, Asst. U. S. Atty., Dallas, Tex., Frank B. Potter, U. S. Atty., Fort Worth, Tex., for appellee.

Before HUTCHESON, Chief Judge, and McCORD, and BORAH, Circuit Judges.

BORAH, Circuit Judge.

Plaintiff-appellant, Jessie Brunette Cardwell, as the sole beneficiary of a National Service Life Insurance policy issued to her deceased husband, Ross Cardwell, brought this action against the United States under the National Service Life Insurance Act of 1940, as amended, 38 U.S.C.A. § 801 et seq., to recover the proceeds of the policy.

In its answer, the Government set up as an affirmative defense that as a result of fraudulent representations made in his application for reinstatement dated October 9, 1947, the insured had fraudulently procured the reinstatement of the policy which had lapsed for failure to pay the premium due on July 1, 1945.

The cause came on for trial before a jury and at the close of all the evidence the Government moved for a directed verdict in its favor. The trial court found that the evidence unmistakably showed that the applicant made a false representation as to his having consulted a doctor; that this was a material representation which the Government relied upon when it issued the policy and, therefore, it was in law a fraud which vitiated the contract. Accordingly, the trial court instructed the jury to return a verdict for the defendant and from the judgment which was entered upon the jury verdict, plaintiff appeals.

Insisting that the court erred in holding that the evidence was such as to establish all of the elements of the defense of fraud as a matter of law and that the court erred in instructing the jury to return a verdict for defendant, plaintiff urges in support thereof two principal points. First, that there were ample grounds for a jury to find that the representations in his application for reinstatement were not made fraudulently and with intent to deceive; and second, that misstatements contained in the application for reinstatement were immaterial.

The evidence, so far as it need be stated, shows that Ross Cardwell entered the military service of the United States on March 15, 1941. While in the army he obtained a $10,000 National Service Life Insurance Policy, which he allowed to lapse for nonpayment of the premium due on July 1, 1945. In the fall of 1947 the Veterans Administration conducted a publicity drive, including radio programs, urging veterans to reinstate their lapsed National Service Life Insurance and advising that such insurance could be reinstated upon payment of two months premiums if the veteran was in as good health as he was when the insurance lapsed. The insured heard these radio programs and asked the plaintiff to take his honorable discharge papers to the local Veterans Administration Office and secure a reinstatement of his policy. The plaintiff presented these papers to a typist in the Veterans Administration's office, who in turn asked whether the insured was in as good health as he was when he came out of the army and whether he was receiving a pension. Upon receiving an affirmative answer to the first question and a negative answer to the second, the typist then proceeded to fill out the application for reinstatement of the policy¹ and instructed the plaintiff to have her husband sign the application, enclose a check and mail it that day. When the insured returned home from work that evening he signed and mailed the application and enclosed his check as directed. The application was approved by the Veterans Administration and thereafter the reinstated policy was converted to thirty-year payment life.

The application, among others, contained two questions which it is claimed the applicant knowingly answered falsely. These questions and answers are as follows:

"8. Are you now in as good health as you were on the due date of the first premium in default?

"Answer: Yes.

"9. Have you been ill, or suffered or contracted any disease, injury, or infirmity, or been prevailed by reason thereof from attending your usual occupation, or consulted a physician, surgeon, or other practitioner for medical advice or treatment at home, hospital, or elsewhere, in regard to your health since the lapse of this insurance?

"Answer: No."

From the evidence it appears that after the policy had lapsed in July 1945 for nonpayment of premium and before its reinstatement in October 1947, the insured consulted Dr. K. H. Beall on several occasions for pain in the abdomen, loss of weight and nervousness. Dr. Beall died in November 1946, but plaintiff, who was present when the doctor gave his diagnosis, testified that he ascribed the condition to nervousness and imagination and said that there was nothing physically wrong with the insured. It further appears that during this same period of time the insured also consulted with Dr. R. H. Smith for an injured hand and abdominal pains. Dr. Smith diagnosed the abdominal distress as a simulated appendix and did not administer any treatment. Throughout this entire period the insured worked continuously at his carpentry trade and in the opinion of others did not appear to be sick. In the fall of 1948 he became ill and consulted Dr. W. B. Lassiter, who was of the opinion that the insured was suffering from appendicitis. An appendectomy was performed and it was then discovered that the insured had a perforated cancer of the bowel, and extensive spread throughout the peritoneal cavity. Thereafter the insured submitted to the Veterans Administration two applications for pension, one claiming that his disability was service connected and the other claiming that disability was nonservice connected. In both of these applications the insured stated that he had been treated by Dr. Beall on October 22, 1945 for stomach trouble. The Veterans Administration awarded compensation on account of disability resulting from conditions incurred or aggravated during insured's war service, effective as of October 1, 1948, and the insured died on March 14, 1949. In respect to the representations made by the insured in his application for reinstatement, Dr. J. F. Rowe, an employee of the medical department of the Veterans Administration, testified that if the insured had stated in his application that he had been examined by physicians regarding his health he would not have approved the application without further investigation.

The representation made by the assured that he was in as good health on the date of application for reinstatement as he was on the due date of the first premium in default expressed an opinion of the insured. There is nothing in the evidence...