Continental Cas. Co. v. Campbell

• Decision Date: 22 May 1967
• Docket Number: No. 5--4224,5--4224
• Parties: CONTINENTAL CASUALTY COMPANY, Appellant, v. John R. CAMPBELL, Appellee.
• Court: Arkansas Supreme Court

Page 872

414 S.W.2d 872

242 Ark. 654

CONTINENTAL CASUALTY COMPANY, Appellant, v. John R. CAMPBELL, Appellee.

No. 5--4224.

Supreme Court of Arkansas.

May 22, 1967.

Mobley & Bullock, Russellville, for appellant.

Gordon & Gordon, Morrilton, for appellee.

JONES, Justice.

This is an appeal from a judgment of the Conway Circuit Court wherein a jury was waived and the trial judge, sitting as a jury, rendered judgment in favor of John R. Campbell on a health and accident insurance policy issued by Continental Casualty Company. Continental is the appellant here and designates one point for reversal, as follows:

'There was no substantial evidence upon which the court could base its decision in favor of appellee, John R. Campbell.'

In appeals to this court from judgments of Circuit Courts where the trial judge sits as a jury or enters judgment upon a jury verdict, the 'substantial evidence' rule is so firmly established in this state that citation of prior decisions is not necessary. We now examine the evidence as to its substantial nature.

On February 23, 1961, appellee Campbell made application for a health and accident insurance policy through appellant's agent on a written form. The questions printed on the application form were read to appellee and his answers to the questions were written down by the agent. Questions eight and nine in the application, and the answers thereto, were as follows:

'8. Have you to the best of your knowledge and belief ever had abnormal blood pressure, ulcers, tuberculosis, appendicitis, hernia, diabetes, cancer, syphilis, goiter, paralysis, sciatica, arthritis, rheumatism, any disorder or disease of the mental, nervous, genito-urinary or digestive systems, rectum, eyes, back, spine or heart? (If so, give nature, date, period of disability, name of doctor and result) _ _No_ _

'9. Have you been under observation or had medical or surgical advice or treatment, or been hospital confined during the past 5 years? _ _ No_ _. (If so, give dates, ailment, duration and result)'

A policy was issued by appellant to appellee and became effective on March 9, 1961. Appellee continued his work as a carpenter until November 1963, at which time he became totally and permanently disabled because of cystic lung disease in the left lung and compensatory emphysema in the right lung. Appellee underwent chest surgery performed by Dr. Reiser in Joliet, Illinois in November 1963, and has been disabled since that date.

Claim was made under the policy and was denied by the appellant who contended that the condition causing the disability preexisted appellee's application for the insurance; that appellee had knowledge of the condition and intentionally withheld the information from appellant and intentionally and fraudulently misrepresented his physical condition in his application for insurance with the fraudulent intent to deceive the appellant.

This was denied by appellee who filed suit. At the conclusion of the trial, judgment was entered for appellee for $2,819.00 accrued benefits under the policy, for attorney's fees in the amount of $940.00 and penalty in the amount of $338.40 and for costs.

At the trial of this case the appellee, as well as his wife, testified that the agent for the appellant insurance company came to their home soliciting insurance business and that the agent read the questions from the application form and then filled in the answers. Both the appellee and his wife testified that to the best of their knowledge the answer to question No. 8 was true, and that in answer to question No. 9 on the application form, appellee advised the agent that he had been hospitalized for a short period of time in Joliet, Illinois where he was under the care of Dr. Blondis who told him he had Asian flu. Both the appellee and his wife testified that the agent remarked that this short period of hospitalization for Asian flu was of small significance and that the agent wrote 'no' as an answer to question No. 9. The agent testified that he wrote the answers correctly as given to him by the appellee.

The appellee, as well as his wife, testified that to the best of their knowledge appellee was in good health and free from physical impairment or deformity at the time the application was made. Appellee introduced his income tax statements in support of his and his wife's testimony that he was regularly employed as a carpenter and that his income was rather constant and indicative of full time employment for 1960, 1961, 1962 and 1963.

Appellee denied any knowledge of lung disease prior to the operation, and denied that Dr. Blondis or any other doctor ever told him he had lung disease. He died that Dr. Blondis told him anything other than he had Asian flu when he was hospitalized for two or three days in 1960.

Dr. Hickey of Morrilton testified that he treated appellee for fracture of the femur and had also rendered 'follow up' treatment following the chest surgery. Dr. Hickey testified that in his opinion appellee's thoracic condition developed over a period of five to fifteen years, but that it was possible that appellee could have been able to perform his normal duties; that many people with such disease work right along with it.

Dr. Blondis testified by deposition that he had treated appellee in the hospital about February 1960; that he diagnosed appellee's condition as fibrocystic disease of the left lung, extensive with recurrent bronchitis and that he advised appellee of the condition. Dr. Blondis testified that he obtained a history from appellee of an automobile injury and hospitalization in the Army- Navy Hospital in Hot Springs for injury to the right chest, and that at that time appellee was advised that he had cystic disease of the left lung; that he also obtained a history of a crushing injury to the left chest in a truck accident during World War II following which appellee was hospitalized in a government hospital in Memphis, Tennessee. Dr. Blondis testified that he relied on his own records and on hospital records for this information, but admits that some of his records were misplaced when he moved his office.

Appellee admitted he was injured in an automobile accident while in a C.C.C. Camp near Hot Springs in 1938, and that he was hospitalized in the Army-Navy Hospital in Hot Springs for that injury, but denies being told that he had cystic disease of the lung. He denied being in World War II and denied having ever suffered an injury to the left side of his chest. He denied having ever been a patient in any hospital in Memphis, Tennessee.

Both...