Day v. National Reserve Life Ins. Co.

• Decision Date: 12 December 1936
• Docket Number: 32748.
• Citation: 62 P.2d 925,144 Kan. 619
• Parties: DAY v. NATIONAL RESERVE LIFE INS. CO.
• Court: Kansas Supreme Court

62 P.2d 925

144 Kan. 619

DAY v. NATIONAL RESERVE LIFE INS. CO.

No. 32748.

Supreme Court of Kansas

December 12, 1936

Syllabus by the Court.

In suit on life policy providing that in absence of fraud statements contained in application should be deemed representations and not warranties, whether policy was invalidated by incorrect answer in application as to whether applicant had suffered from certain named diseases depended on whether applicant answered question in good faith.

Evidence showing that applicant for life policy, who had previously consulted physician with respect to pain in the bowels and had received treatment therefor, acted in good faith in stating in application that he had never suffered from any intestinal disease, because of belief that trouble was of a trivial nature, held to justify recovery on policy.

1. An applicant for a life insurance policy, in answer to a question as to whether he had suffered from certain ailments answered in the negative. Subsequently it appeared that this answer was not correct and he had suffered from one of the ailments named. Held, that the statement was not a warranty but a representation, and when an action was brought on the policy the question as to its validity was whether the applicant answered the question in good faith.

2. In an action on a life insurance policy the record is examined and it is held that there was sufficient evidence to support the finding of the jury that questions in the application for insurance were answered in good faith.

Appeal from District Court, Lyon County; Lon C. McCarty, Judge.

Action by Alida Day against the National Reserve Life Insurance Company. Judgment for plaintiff, and defendant appeals.

Roscoe Graves, of Emporia, and Robert Stone, James A. McClure Robert L. Webb, Beryl R. Johnson, and Ralph W. Oman, all of Topeka, for appellant.

I. T. Richardson, of Emporia, for appellee.

SMITH Justice.

This was an action to collect a life insurance policy. Judgment was for plaintiff. Defendant appeals.

On July 1, 1933, insured applied for a life insurance policy. He filled in and executed part 1 of his application. In this he stated that the statements and answers contained in it were full, complete, and true, and should constitute his application for insurance, and that there should be no contract of insurance until a policy should have been delivered and the first premium paid during applicant's lifetime and continued good health.

On August 24, 1933, he executed part 2 of his application. That document contained many questions and answers, among which were the following:

"7. Have you ever suffered from any ailment or disease of

"C. Stomach, Intestines, Liver, Kidneys, Bladder? Answer: No.

"8 E. Have you consulted or been treated by any physician for any ailment or disease not included in your above answers? Answer: No.

"10. Are you now in good health, free from diseases and injury? Answer: Yes."

Parts 1 and 2 of the application were made a part of the policy. Two paragraphs of the policy issued are as follows:

"Contract. 10. This policy, and the application herefor constitute the entire contract between the parties hereto. All statements made by the insured as the basis for the contract shall, in the absence of fraud, be deemed representations and not warranties, and no such statements shall avoid this policy or be used in the original application herefor, and unless a copy of the application be endorsed hereon or attached hereto when this policy is issued.

"Agreements. 19. All agreements made by the company are signed by its President, Vice-President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer, No other person can alter or waive any of the conditions of this policy, extend the time for payment of a premium or interest, or make any agreement which shall be binding upon the Company."

The policy was issued to insured on August 29, 1933. On May 18, 1934, insured died.

When proof of loss was made the company refused payment. The petition was the simple statement of the issuance of the policy, the death of insured and the refusal of the company to pay.

In the answer the defendant admitted the issuance of the policy and the death of the insured. The answer then alleged that the policy was procured by the insured through certain false statements and representations made by him in his written application for the policy. The following questions and answers were set out in the answer:

"8. E. Have you consulted or been treated by any physician for any ailment or disease not included in your above answers ? No.

"10. Are you now in good health, free from diseases and injury? Yes."

The answer alleged that insured knew the above answers to be false and that they were made for the purpose of inducing the company to issue the policy. The answer alleged that when insured executed part 1 of the application he warranted that he was in good health. The agreement to which the answer referred was as follows:

"I hereby declare and agree: 1. That the foregoing statements, together with the declaration and my statements and answers, and also those made in Part 2 hereto, if required, shall constitute my application for insurance on application. The statements and answers are full, complete and true, and are offered by me as the basis for the proposed contract for insurance.

"2. That except as otherwise stated in the form of receipt hereto attached, there shall be no contract of insurance until a policy shall have been issued and delivered to me and the first premium paid thereon during applicant's lifetime and continued good health, and that such delivery and payments shall constitute acceptance of the policy as issued. 3. I hereby certify that I have examined and accept the provisions of the policy applied for, and said Company shall not be held responsible for Agent's statements at variance therewith. That my acceptance of any policy issued on this application, whether or not upon the form applied for herein, will constitute a ratification by me of any change in the form of the policy, or correction in or addition to the application, made by the Company in the space headed, 'For Home Office additions or Corrections', copy of which constitutes sufficient notice to me of the change made."

The answer alleged that the defendant was not liable to plaintiff in any amount except for the amount of the premium paid and this was paid into court.

The reply of plaintiff denied that insured knowingly or fraudulently made any statement for the purpose of securing the policy that was untrue, but that all of his statements were true and that insured was in good health and believed himself so.

With the issues thus made up, the case was submitted to a jury. A verdict was returned in favor of plaintiff. Judgment was entered accordingly. This appeal followed.

The position of the defendant is that the evidence showed beyond question that insured was examined and treated by a doctor prior to his execution of part 2 of the application, and when he denied this treatment in his application he was guilty of fraud. Defendant argues that the questions were material and that had the company known the true facts it would not have issued the policy.

The position of plaintiff is that when insured made the statements contained in his application he did not know that his health was seriously impaired, and the statements made by him were made in good faith and believed by him to be true, and he did not knowingly commit any fraud.

Since the parties make the above contentions, it will be necessary to examine the evidence.

One doctor testified that insured had consulted him on August 7 1933. The doctor testified that insured had stated that he was troubled more or less with a discomfort and pain in the bowels, and that insured stated he had been so troubled for some time. This doctor testified that he again examined insured on August 8; that on this occasion he examined insured with a protoscope and had him X-rayed. At that time he discovered that...