Commercial Cas. Ins. Co. v. Schmidt

• Decision Date: 04 April 1934
• Docket Number: 8.
• Citation: 171 A. 725,166 Md. 562
• Parties: COMMERCIAL CASUALTY INS. CO. v. SCHMIDT.
• Court: Maryland Court of Appeals

171 A. 725

166 Md. 562

COMMERCIAL CASUALTY INS. CO. v. SCHMIDT.

No. 8.

Court of Appeals of Maryland

April 4, 1934

Appeal from Court of Common Pleas of Baltimore City; Joseph N Ulman, Judge.

Action by William L. Schmidt against the Commercial Casualty Insurance Company. From a judgment for plaintiff, defendant appeals.

Reversed.

Argued before BOND, C.J., and URNER, ADKINS, OFFUTT, DIGGES, and PARKE, JJ.

Charles Jackson and David Ash, both of Baltimore (Mark Jackson, of Baltimore, on the brief), for appellant.

Clater W. Smith, of Baltimore (Walter L. Clark, of Baltimore, on the brief), for appellee.

BOND Chief Judge.

A suit on an accident and health disability policy issued in 1930 is defended by the insurance company in this case on the ground of false statements contained in a form of application upon which the policy was issued, and which was embodied at length as part of the policy. The plaintiff has replied that the agent of the company filled in the statements without knowledge or fraudulent participation on the part of the plaintiff, and that the company with knowledge of the misrepresentations possessed by their agent had issued the policy and accepted payment of premiums. The trial court overruled demurrers to the plaintiff's replies, and denying prayers for direction of a verdict for the defendant submitted the case to a jury. Verdict and judgment for the plaintiff resulted, and the defendant appeals. Forty-three exceptions, most of them devoid of importance, were taken to rulings on evidence, and a forty-fourth was taken to rulings on prayers for instructions.

Facts undisputed are that Schmidt, the plaintiff, born in 1896, served in the Army from August, 1918, to January, 1919, then as a blacksmith's helper at Sparrow's Point, then, in 1920, 1922, or 1923, as a brakeman in the employ of the Baltimore & Ohio Railroad Company. While in the railroad service, he sustained an injury to his right shoulder, and to his ribs, two of which were fractured. At that time he complained of pains in the head, from which he suffered before the injury in the railroad service as well as after, but only at intervals, as others suffer, and not, he says, as he has suffered since he was hurt, presumably in an accident which is the ground of the present suit. Since he was hurt, his headaches have been constant. He was confined to a hospital one month after the railroad injury, but does not remember that he claimed that permanent disability had been caused him. After his railroad service, he was employed by the United Railways Company of Baltimore, and subsequent to that did odd jobs. After he came out of the Army service, he testified, he "was prevented from getting regular employment from 1922 and 1923, by everything combined from day to day. * * * I was just feeling worse and worse. As long as I could make my honest living I did so, and when I needed help, then I first went to the Government." These symptoms that affected him were in the chest, and he started to feel them getting worse in 1928. A physician called as a witness for the plaintiff, and who had attended him six times altogether, in 1926 and subsequent years before the taking out of this policy, testified that in 1926 the plaintiff complained of headache, some cough, and ear discharge, and had bronchitis, soreness of neck muscles and headache, and that the diagnosis was cold and bronchitis. At the time of applying for the insurance in controversy, the plaintiff was working as a grocer's clerk. On October 30, 1929, he applied to the United States government for service disability compensation, certifying that since November, 1918, the date of entry into the Army, he had been suffering a disability from chest trouble resulting from exposure at Camp Meade, that he had been given first aid treatment there, and later, after his discharge from the Army, had been treated by Dr. Grempler of Baltimore, now dead, and confined in Franklin Square Hospital in 1923, and off and on since 1919 confined to his home one, two, or three weeks at a time. One of the friends, whose confirmatory certificate was appended, was the agent of the present appellant company. On his application, he was examined by a number of physicians at Fort McHenry, and compensation was allowed. He told the physicians at the fort that he had trouble with his chest, pains in the head since his Army service, and across the eyes at times, and shortness of breath, especially in the morning, and his application, introduced in evidence, contained the same statements. The confinement to the Franklin Square Hospital, he testified at the trial, was for an operation for hemorrhoids. Payments of his compensation from the government began, he thought, about three months after he made application for them, which would be at about the end of January, 1930.

On November 11, 1929, twelve days later, he took out a life policy in the Metropolitan Life Insurance Company for $432, through the agent who later took the insurance now contested. On November 21, 1919, eight days later, an application was made out and signed by the plaintiff, through the same agent, for $5,000 of life insurance, with a disability clause, in the same company, but the home office of the company declined the insurance on November 25, 1929. On January 24, 1930, Schmidt signed an application for accident and health insurance in the present appellant company, of $70 monthly indemnity and $700 principal sum, and the policy was issued. The statements in that application are the same as those in the application made a part of the contract now sued on, and need not be repeated.

The application embodied in the present policy was made out on March 18, 1930, for the larger amounts of $90 indemnity and $900 principal sum. It contains the following questions and answers:

"Has any application for health, accident, or life insurance ever made by you been declined, or any such policy of insurance cancelled or renewal for insurance of any kind refused by any company, association or society? No."

"Are your habits of life correct and temperate, and are you in sound condition mentally and physically? Yes."

"Have you ever had any infirmity, deformity or disease? No."

"Have you been disabled by either accident or illness, or received medical or surgical attention during the last five years? No."

"If so, when, for what and duration?"

This last question was unanswered, and four blank spaces for enumerating the times, causes, and durations of disabilities were not filled in.

According to the plaintiff's further testimony he was, while riding in a taxicab to Fort McHenry for treatment on April 8, 1931, injured in a collision of the cab with a motortruck, and as a consequence has been caused to suffer disabling pains in the head, back, and shoulder, the pains in the head having been constant since the accident. Testimony given on behalf of the defendant tends to deny the existence of any injury. Injury as testified to is the ground of recovery in this case. The defendant company paid the amounts of monthly indemnity during four or five months before the validity of the policy was questioned.

The plaintiff, while admitting his signature to earlier applications, including that with the same answers made out for the earlier and smaller policy in the same appellant company, denied that the signature to the application now involved was his. He testified, on the contrary, that to procure this insurance he signed another paper, and not the one copied into the policy. The agent of the company, on the other hand, testified that the plaintiff did sign this application, which was to increase the previous insurance in the same company. As to the false answers, the plaintiff testified that he knew nothing of what answers were being written by the agent, that the agent was urging him to take the insurance, and filled in the application, and he merely told the agent of his physical troubles, according to the best of his ability, did not participate in any respect in making the false answers, and did not subsequently read them in the original application or in the policy. The agent, on the other hand, while admitting that he knew the falsity of some of the answers, alike in this and in the earlier application for the smaller policy in the same company testified that he inserted them upon the urging of the plaintiff and the plaintiff's brother,...