Carr v. Prudential Ins. Co. of America

• Decision Date: 06 November 1944
• Docket Number: No. 20376.,20376.
• Citation: 184 S.W.2d 133
• Parties: CARR v. PRUDENTIAL INS. CO. OF AMERICA.
• Court: Missouri Court of Appeals

184 S.W.2d 133

CARR v. PRUDENTIAL INS. CO. OF AMERICA.

No. 20376.

Kansas City Court of Appeals. Missouri.

November 6, 1944.

Appeal from Circuit Court, Jackson County; Paul A. Buzard, Judge.

Suits by Israel Carr against the Prudential Insurance Company of America to recover upon two life insurance policies issued by defendant. The suits were consolidated by agreement. Verdict for plaintiff, and, from a judgment sustaining defendant's motion for new trial, plaintiff appeals.

Judgment reversed and cause remanded with directions to reinstate verdict and enter judgment thereon.

Cornelius Roach, Daniel L. Brenner, and Ted Houx, Jr., all of Kansas City, for appellant.

William C. Michaels, Roy P. Swanson, and Kenneth E. Midgley, all of Kansas City, and Harry H. Edel, of Newark, N. J. (Edward S. Biggar and Michaels, Blackmar, Newkirk, Eager & Swanson, all of Kansas City, of counsel), for respondent.

SPERRY, Commissioner.

Israel Carr, plaintiff, sued The Prudential Insurance Company of America, defendant, on two life insurance contracts issued by defendant to Mary Carr, deceased wife of plaintiff who was named beneficiary therein. The verdict was for plaintiff but the trial court sustained a motion for new trial on the grounds that a submissible case was not made. Plaintiff appeals.

The evidence was to the effect that defendant was in the life insurance business and maintained a branch office in Kansas City of which Howard Austin was assistant manager; that Austin contacted Ted Minkin, who was in the general insurance business, and arranged for Minkin to secure life insurance applications for defendant. Minkin had, for many years, procured insurance on automobiles, property, etc., for plaintiff. He visited plaintiff frequently in connection with their business dealings and plaintiff had informed Minkin fully as to insured's physical condition, long prior to the taking of insured's application for, or the issuance of the policies herein sued on.

Minkin called on plaintiff and solicited him to take out a life insurance policy but plaintiff informed him that he had enough life insurance, whereupon Minkin told plaintiff that insured, who was the owner of the business being operated by plaintiff, should have a policy.

On January 7, 1941, Minkin visited insured and presented to her an "application" for a policy of life insurance in the amount of $2000. The "application" was in two parts. Part one contained questions of a general nature with spaces therein for insured's answers to be inserted. To these questions insured gave true answers and same were recorded by Minkin. Insured then signed part one of said application and Minkin signed as a witness thereto. Minkin then signed an "Agent's statement," which was on a separate sheet but attached to the "application." The "Agent's statement," executed by Minkin, contained, among others, the following questions:

"18. Are you aware of anything about the proposed insured's health history, character or use of intoxicating alcoholic beverages that would render the risk in any way undesirable?

"19. Does the proposed insured appear to be in good health?" Minkin answered No. 18 in the negative and No. 19 in the affirmative.

Thereafter, defendant's examining physician, at Minkin's request, interviewed and examined insured, at which time "Part 2 of application" was executed. The following questions appear therein: "10. Have you ever had a tumor or any disease of the breast?" To these questions, propounded to insured by the physician, insured answered "No"; and said answers were so recorded by the physician. There also appeared therein: "What serious illness have you had? "What surgical operations have you undergone" Her answers thereto were "No," and were so recorded. To the question: "Have you ever been in a hospital, sanitarium or other institution for observation or treatment?" her answer was: "Yes. Normal confinement. Presbyterian Hosp. Chicago."

The form which she signed contained the following: "I hereby declare that all the statements and answers in Parts 1 and 2 of this application are complete and true. * * * I agree that * * * unless the full first premium is paid at the time of making this application, the policy shall take effect only if issued by the company and received by me * * * and the full first premium thereon is paid, all while my health, * * * remain as described in the application. * * *" The said first premium was not paid when the application was executed. Hospital records introduced in evidence, the contents of which were not contradicted, challenged, or explained, disclose that insured knew in June, 1938, that she had a lump in her right breast. Said records disclose that she entered a hospital in July, 1938, where the lump was diagnosed as cancer and the right breast was amputated; that in May, 1940, she was a hospital patient, was suffering from pain in back and right chest, had lost eight pounds in weight during the previous two months, and that while there she received X-ray treatments for metastatic cancer, from which she suffered. While there was no direct evidence to the effect that insured knew she had cancer, nevertheless she suffered from that disease; and she knew all of the facts disclosed by the hospital records excepting only that her malady was cancer. The evidence tends to prove that the medical examiner was not guilty of any bad faith and that he did not know of insured's diseased condition or of her hospital record.

Based on the above application defendant issued its policy, No. 11385336.

On January 27, 1941, insured executed a declaration in substance as follows:

"I the undersigned hereby declare that I am in good health and have been in good health since undergoing the medical examination from which policy No. 11385336 was issued by The Prudential Insurance Company of America, and I do hereby certify that my declarations to the medical examiner at that time are true as of the date above written and may be used by said Company, together with this Declaration, as a part of a new application dated 1-27-1941 for additional insurance on my life."

Based thereon an additional policy in the amount of $2000 was issued.

Insured died of cancer January 4, 1942, and plaintiff instituted two suits, one on each policy, which suits were, by agreement in circuit court, consolidated.

Defendant contends that insured knew of her cancerous condition and knew that she was not in good health, as she represented herself to be in the application, and that therefore plaintiff cannot recover. Plaintiff concedes that insured was suffering from cancer, of which she died, at the time the application was signed. We think that the evidence indicated that the insured must have known of her true condition, that she intentionally gave false answers to the examining physician, and that she concealed material facts pertaining to a disease from which she died. In any case, insured was suffering from cancer which it is conceded caused her death within a year after she applied for insurance, and such fact was not reported to the insurance company. Such being the case, without any further showing, plaintiff could not recover. Kirk v. Metropolitan Life Life Insurance Company, 336 Mo. 765, 81 S.W.2d 333, loc. cit. 343, 344.

However, plaintiff contends that defendant may not avail itself of this defense because defendant's agent, Minkin, had full knowledge of insured's condition at the time the application was executed, that what he knew defendant company knew, and that defend...