Columbian Nat. Life Ins. Co. v. Rodgers
| Decision Date | 27 December 1937 |
| Docket Number | No. 1553.,1553. |
| Parties | COLUMBIAN NAT. LIFE INS. CO. v. RODGERS. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Bailey Aldrich, of Boston, Mass. (Richard S. Righter, of Kansas City, Mo., Edwin S. McAnany, of Kansas City, Kan., Horace F. Blackwell, Jr., of Kansas City, Mo., and F. H. Nash, of Boston, Mass., on the brief), for appellant.
Roy L. Hamilton, of Beloit, Kan., for appellee.
Before PHILLIPS and WILLIAMS, Circuit Judges, and SYMES, District Judge.
Lena M. Rodgers brought this action on a policy of insurance for $10,000.00 in which she was named as beneficiary, issued by the Columbian National Life Insurance Company, hereinafter called the Insurance Company, on the life of Paul W. Rodgers.
The petition alleged that the insured died on August 4, 1935, while the policy was in full force and effect.
The answer set up that the insured in his answers to questions in the application for the policy, made false and fraudulent representations of fact which were material to the risk. It set up other defenses which were stricken because not set out in its letter declining to pay the loss.
At the close of the evidence the Insurance Company moved for a directed verdict in its favor. The motion was denied and the jury returned a verdict in favor of the beneficiary. Judgment was entered thereon and the Insurance Company has appealed.
The material facts are these:
The application for the policy sued on was dated February 5, 1935. Part I thereof was signed by the insured and read in part as follows:
Part II of the application, the medical examination, was also signed by the insured and read in part as follows:
The policy was issued on the faith of the answers in the application including those above quoted. It read in part as follows:
On February 20, 1934, at Kansas City, Kansas, Paul W. Rodgers made an application to the John Hancock Mutual Life Insurance Company of Boston, Massachusetts, for a policy of life insurance for $5,000.00. The John Hancock Company declined the application and no policy was ever issued thereon.
On March 29, 1934, a clerk in the mail division of the John Hancock Company deposited a notice of such rejection in the United States mails at Boston, Massachusetts, with postage duly prepaid thereon, addressed to Paul W. Rodgers at 252 Brotherhood Building, Kansas City, Kansas, his business address.
The records of the John Hancock Company at its branch office in Kansas City, Kansas, showed that the application of February 20, 1934, was rejected.
The chief underwriter and supervisor of new business for the Insurance Company passed upon the application of February 5, 1935, and in reliance on the truthfulness of the answers to the questions in Parts I and II thereof approved the application and authorized the issuance of the policy. He had no knowledge at that time that the John Hancock Company had declined Rodgers' application in 1934.
Section 40-418, G.S.Kansas, 1935, provides that no misrepresentation made in obtaining a policy of life insurance shall be deemed material or render the policy void unless the matter represented shall have actually contributed to the contingency or event on the happening of which the policy is to become due and payable. In Becker v. Kansas Casualty & Surety Company, 105 Kan. 99, 181 P. 549, 551, the Supreme Court of Kansas held that section 40-418, supra, does not apply to misrepresentations which increase the moral risk. In the opinion the court said:
See, also, Scott v. National Reserve Life Insurance Company, 144 Kan. 224, 58 P.2d 1131.
Statements in an insurance application of the character here involved are regarded as material as a matter of law,1 and if they are knowingly false, proof of an actual, conscious purpose to deceive is not necessary.2
An insurance company will be presumed to have acted in reliance on the truth of material representations.3
It follows that if the answers made in the application by Rodgers were known to him to be false it was not incumbent upon the Insurance Company to prove a conscious purpose to defraud.
When mail matter is properly addressed and deposited in the United States mails with postage duly prepaid thereon, there is a rebuttable presumption of fact that it was received by the addressee in the ordinary course of mail.4 There being no proof to the contrary it must be presumed that Rodgers received the notice of declination of the application made to the John Hancock Company. Furthermore, no policy was issued on the application of February 20, 1934, and Rodgers must have known that fact.
The declination of an application for life...
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