Connecticut General Life Ins. Co. v. Skurkay

• Decision Date: 22 February 1933
• Docket Number: 592.
• Citation: 167 S.E. 802,204 N.C. 227
• Parties: CONNECTICUT GENERAL LIFE INS. CO. v. SKURKAY.
• Court: North Carolina Supreme Court

167 S.E. 802

204 N.C. 227

CONNECTICUT GENERAL LIFE INS. CO. v. SKURKAY.

No. 592.

Supreme Court of North Carolina

February 22, 1933

Appeal from Superior Court, Buncombe County; Sink, Judge.

Action in county court by the Connecticut General Life Insurance Company against John B. Skurkay, to cancel a health and accident policy, in which defendant counterclaimed. From the judgment of the superior court affirming the judgment of the county court in favor of defendant, plaintiff appeals.

Reversed.

Under Pennsylvania law, statement in application for health and accident insurance that applicant had no other disability insurance held warranty which could not be waived by agent.

On or about April 10, 1930, the defendant, a resident of Masontown Pa., made written application to the plaintiff for a policy of health and accident insurance, and a policy was duly issued. The policy recites: "In consideration of the application for this policy, a copy of which is attached hereto and made a part hereof, and of the annual premium of $186.60, to be paid on or before the 17th day of April in each year during the continuance of this policy until thirty full annual premiums have been paid, does hereby insure John B. Skurkay, of Masontown, State of Pennsylvania," etc. The disability indemnity provided was $300 a month. The application contained the following questions: "Do you hereby agree that all the foregoing statements and answers as written, are true, and that your acceptance of any policy issued on this application shall constitute the ratification by you of any corrections, additions or changes made by the company and noted in memorandum attached to policy when issued?" This question was answered in the handwriting of the defendant, "Yes." The application also contained the following: "I hereby declare that all the statements and answers to the above questions are complete and true, and I agree that they shall form a part of the contract of insurance applied for," etc. This portion of the application was signed by the defendant in his own handwriting. Question 26 of the application was as follows "Do your average earnings, excluding income from investments, exceed the aggregate indemnity payable for disability under this and all other policies now carried by you?" This question was answered, "Yes." Question 27 involved two specific inquiries: (a) Amount of life insurance; (b) disability benefit per month or week accruing from other policies then in force. The defendant wrote the word "none" under the heading requiring information as to the amount of disability benefit payable per month or per week by the terms of such other policies. The policy of insurance contains certain standard provisions among others, as follows:

"2. No agent has authority to change this policy or to waive any of its provisions. No change in this policy shall be valid unless approved by an executive officer of the company and such approval be endorsed hereon."

"G. The copy of the application attached hereto is hereby made a part of this contract. The falsity of any statement in the application for this policy shall not bar the right to recovery hereunder unless such false statement was made with actual intent to deceive or unless it materially affected either the acceptance of the risk or the hazard assumed by the company, anything in the application herefor to the contrary notwithstanding."

The plaintiff, insurance company, brought an action against the defendant to cancel the policy, alleging that at the time the defendant made the application he had outstanding policies providing monthly disability benefits in the sum of $330, and that when the defendant in the application for the policy sued on had stated in writing that he had no insurance with disability benefit, that such statement was false and material. The defendant filed an answer denying that he had made any false statement, and alleging that if there were any errors or mistakes contained in the written application "that all the facts were truly stated by this defendant to the agent who solicited and wrote said insurance, at and before said application was signed. *** That the said agent presented to this defendant a blank form purporting to be an application for insurance, and at said time this defendant stated that he had insurance policies all of which were in the possession of a brother-in-law of defendant or in a safety deposit box of a bank with which said brother-in-law was associated, in a town some distance from Masontown, and that this defendant did not know whether the said insurance policies contained any disability benefits, and stated to the said agent that this defendant would have to get said insurance policies and look at them before he could tell whether they contained sick benefits; whereupon, the said agent of said insurance company, with full knowledge of all the facts, stated to this defendant that it made no difference, and instructed and directed this defendant to answer the said question as to disability benefits in said insurance policy as contained in said writing purporting to be an application for insurance, and that the answer inserted therein was also written at the request and direction of the plaintiff through its authorized agent," etc.

The cause was tried in the county court of Buncombe county. The defendant, Skurkay, testified that he was a physician living in Pennsylvania at the time of application for the insurance. He came to Asheville about November, 1930, and there was evidence tending to show that he was suffering with tuberculosis. He testified that the agent for the insurance company was named Koontz, and that Koontz came to his office and persuaded him to take out the policy of insurance in controversy. The defendant further testified that when he was filling out the application Koontz was standing "right back of me, reading the questions in the application. He came down them and I answered accordingly. He really told me what to put in, and I wrote it until we came to the questions under discussion. As to question 26: 'Do your average earnings, excluding income from investments, exceed the aggregate indemnity payable for disability under this and all other policies now carried by you?' I answered 'Yes.' Then he came to question 27: 'What is the total amount of insurance in force on your life?' *** When we came to question 27, he said: 'How much life insurance do you carry?' I hesitated, had to think. I put down $10,000, $10,000, $13,000, and $6,000.00. When he came to question: 'Do you carry any disability benefits?' I started to put 'unknown,' as you can see. I said: 'I can't tell you whether I carry disability benefits or not. My policies are with my brother-in-law in the Peoples National Bank in a town thirty-eight miles away, where I keep my valuables.' He said: 'Since you answered question No. 26, "Yes," *** that doesn't matter, put down none! So I put down "none"."'

The evidence tended to show that the defendant was...