Cohen v. Penn Mut. Life Ins. Co.

• Decision Date: 21 June 1957
• Parties: Elizabeth R. COHEN, Plaintiff and Respondent, v. The PENN MUTUAL LIFE INSURANCE COMPANY, a corporation, Defendant and Appellant. S. F. 19647.
• Court: California Supreme Court

Page 241

312 P.2d 241

48 Cal.2d 720

Elizabeth R. COHEN, Plaintiff and Respondent, v. The PENN MUTUAL LIFE INSURANCE COMPANY, a corporation, Defendant and Appellant.

S. F. 19647.

Supreme Court of California, In Bank.

June 21, 1957.

As Modified on Denial of Rehearing July 16, 1957.

Henry C. Clausen, Henry C. Clausen, Jr., Walker Lowry and McCutchen, Thomas, Matthew, Griffiths & Greene, San Francisco, for appellant.

Rockwell & Fulkerson and John L. Rockwell, San Rafael, for respondent.

SPENCE, Justice.

Plaintiff sued as beneficiary to recover on a policy of insurance issued by defendant on the life of her deceased husband. After a verdict in plaintiff's favor, defendant unsuccessfully moved for a judgment notwithstanding the verdict and judgment was entered on the verdict. Defendant appeals, claiming principally that its motion should have been granted because of the deceased's misrepresentations and concealment of material facts in stating his medical history. Since the record sustains defendant's position on this point, other alleged errors need not be considered.

There is no conflict as to the material facts. On September 10, 1949, the deceased, a 32-year-old physician, applied to defendant for the insurance policy. He answered the following questions, among others, in his application:

'4. (a) When did you last consult or receive treatment for your health from any physician, surgeon or practitioner? 10 years ago.

'4. (d) State name of every other physician, surgeon or practitioner who has attended or treated you or whom you have consulted for any reason or ailment, serious or not serious, within the past 5 years. (Give all dates and details.) None.

'4. (e) Are you in good health? Yes.

'5. Have you ever had a health or physical examination? (Give dates, reasons, and names and addresses of persons who made examinations.) U. S. Army induction 1944.

'6. (c) Have you ever had a special heart study or an electrocardiogram? No.

'6. (d) Have you ever been in a clinic, hospital, sanatorium or asylum for observation, treatment or diagnosis? No.

'8. Has there been any suspicion of, or have you ever had or been treated for any of the following diseases or ailments:

'(d) Palpitation of heart, shortness of breath, pain in chest, abnormal pulse, any disease of the heart or blood vessels or a high blood pressure? No.

'11. Have you ever had any illness, disease, operation or injury other than as stated by you above? (If so, give full particulars, date, duration, severity, etc. of each. Use reverse side if necessary.) See Details. Nothing other than usual childhood diseases.'

Deceased certified that these answers were full, complete and true, and he agreed that they should form a part of the contract of insurance. Thereafter a doctor selected by defendant examined the deceased and reported his condition as satisfactory. The policy was issued September 19, 1949; the application therefor was attached thereto; and together, they constituted the entire contract between the parties. The insured died of a heart attack while giving a lecture on June 1, 1950. The autopsy established the cause of death as 'coronary arteriosclerosis, severe,' with 'old occlusion of left circumflex coronary artery. Subtotal occlusion of left anterior coronary artery. Anterior myocardial scar. Visceral congestion, moderate.'

Proofs of death were filed with defendant and upon investigating the claim, defendant discovered the following facts relating to the deceased's induction into, and discharge from, the Army: That following application for a commission with the Army Medical Corps in 1943, the deceased was examined by Army doctors on seven separate occasions between October 1 and October 20 of that year, and that these examinations showed that he had a heart murmur, unstable blood pressure or intermittent hypertension and tachycardia or rapid pulse; that during this same period of 1943, the deceased had also had a special heart study by X-ray and an electrocardiogram the latter being 'definitely abnormal,' in the opinion of one expert pointing to the coronary arteriosclerosis found at the autopsy, and according to another expert 'suggestive of heart disease'; that in January, 1944, the deceased accepted a commission stating 'Waiver is granted for unstable blood pressure, tachycardia, systolic apical murmur on physical examination report dated October 1, 20, 1943'; that following an examination of the deceased in the fall of 1944, the Army report stated: 'Blood pressure this examination is of same order as previously'; that thereafter on October 12, 1944, and preliminary to entering on active duty, the deceased executed a waiver acknowledging under oath that he had hypertension; and that in January, 1947, the deceased was relieved from active duty following a discharge in November, 1946, stating that he was 'incapacitated for general or limited service' because of 'hypertension.' Defendant further discovered that in late 1947 or early 1948, the deceased, while an intern at the Michael Reese Hospital in Chicago, had been examined at the hospital because of abdominal pain.

It indisputably appeared from defendant's witnesses that the policy to the deceased was issued in reliance on the truth of his representations in his application for insurance; that had the facts disclosed by the Army examinations been known to defendant the policy would not have issued; that under defendant's standard practice, electrocardiograms, abnormal pulse records, and abnormal blood pressure readings are referred to home office doctors for review; that if the deceased had truthfully stated his medical history, a full investigation would have been made, and that defendant does not insure applicants with pulse and blood pressure readings such as those of the deceased at the time of his Army examinations. All the expert witnesses, both plaintiff's and defendant's, agreed that in order to determine the physical condition of a person under examination, it is essential that he tell the truth about his medical history.

Where an applicant for insurance is asked generally whether he has had or been treated for any disease or ailment, the failure to mention minor or temporary indispositions is not material to the risk and will not avoid the policy. Ransom v. Penn Mutual Life Ins. Co., 43 Cal.2d 420, 427, 274 P.2d 633; Pierre v. Metropolitan Life Ins. Co., 22 Cal.App.2d 346, 349, 70 P.2d 985. But the rule is otherwise when the applicant is asked specific questions as to his medical history, and false answers thereto will vitiate the contract. McEwen v. New York Life Ins. Co., 187 Cal. 144, 146-147, 201 P. 577; Iverson v. Metropolitan Life etc. Co., 151 Cal. 746, 749, 91 P. 609, 13 L.R.A.,N.S., 866; San Francisco Lathing Co. v. Penn M. L. Ins. Co., 144 Cal.App.2d 181, 300 P.2d 715; Pierre v. Metropolitan Life Ins. Co., supra, 22 Cal.App.2d 346, 349, 70 P.2d 985. It has been specifically held that misrepresentations as to heart symptoms render an insurance policy unenforceable. California Western States Life Ins. Co. v. Feinsten, 15 Cal.2d 413, 423-424, 101 P.2d 696, 131 A.L.R. 608; Whitney v. West Coast Life Ins. Co., 177 Cal. 74, 80-81, 169 P. 997; Robinson v. Occidental Life Ins. Co., 131 Cal.App.2d 581, 585-586, 281 P.2d 39; Parrish v. Acacia Mut. Life Ins. Co., D.C.Cal., 92 F.Supp. 300, 302-303, affirmed 9 Cir., 184 F.2d 185. Where false representations as to material matters have been made, the existence of a fraudulent intent to deceive is not essential. Telford v. New York Life Ins. Co., 9 Cal.2d 103, 105, 69 P.2d 835.

Section 334 of the Insurance Code provides: 'Materiality is to be determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is due, in forming his estimate of the disadvantages of the proposed contract, or in making his inqiries.' Within the purport of this rule, the deceased was bound in good faith to communicate the material facts in the application for insurance. Ins. Code, § 332. The fact that defendant put the questions in writing and asked for written answers was itself proof that it deemed the answers material. O'Connor v. Grand Lodge A.O.U.W., 146 Cal. 484, 494-495, 80 P. 688; Maggini v. West Coast Life Ins. Co., 136 Cal.App. 472, 475-476, 29 P.2d 263; McEwen v. New York Life Ins. Co., 23 Cal.App. 694, 697-698, 139 P. 242. While the misrepresentations need not have any causal connection with the death of the insured, the nature of the misrepresentations here strikingly reflects the materiality of the information withheld.

Although failure of an applicant to disclose a physical condition of which he is ignorant will not affect the policy (Travelers Ins. Co. v. Byers, 123 Cal.App. 473, 481, 11 P.2d 444) and a layman might reasonably be excused if, in disclosing information, he failed to understand the meaning of certain medical terms and for that reason omitted some fact in his medical history (Ransom v. Penn Mutual Life Ins. Co., supra, 43 Cal.2d 420, 426, 274 P.2d 633), this is not such a case. Here the deceased was himself a doctor, he knew his medical history with regard to his heart condition, and he concededly must have understood the terms used in the insurance application and the significance of his answers. He knew that within two years of making his application with defendant, he had been in the hospital for the purpose of diagnosis of abdominal pain and had consulted doctors in connection therewith; he knew that while in the Army he had had a special heart study by X-ray; he knew what an electrocardiogram was and that while in the Army, one had been made of his heart action; he knew that tachycardia meant rapid pulse and that hypertension meant high blood pressure; and he knew beyond any possible dispute that the Army had concluded that he suffered from tachycardia and high blood pressure, for his Army commission so stated and he had acknowledged the...