Dye v. Pa. Cas. Co. 1945., (No. 9724)

• Decision Date: 06 November 1945
• Docket Number: (No. 9724)
• Citation: 128 W.Va. 112
• Court: West Virginia Supreme Court
• Parties: Belva B. Dye v. Pennsylvania Casualty Company1945.

128 W.Va. 112

Belva B. Dye

v. Pennsylvania Casualty Company1945.

(No. 9724)

Supreme Court of Appeals of West Virginia.

Submitted September 25, 1945.

Decided November 6, 1945

1. Insurance

False statements contained in an application for an indemnity policy that insured is "now in good health and free from any mental or physical impairment or deformity", and that insured had no "sickness or injury or received any medical or surgical advice or treatment in the past five (5) years", which statements are known to the insured to be in fact false at the time the application was signed, are material misrepresentations, which in the absence of a waiver or an estoppel will avoid the policy.

2. Insurance

The acceptance of a premium by the insurer under an indemnity policy does not constitute a waiver of false material representations contained in the application for the policy where, at the time the premium was paid, the insurer had not been put on inquiry, and had no knowledge that the representations were in fact false.

Error to Circuit Court, Roane County.

Action by Belva B. Dye against the Pennsylvania Casualty Company to recover costs of an operation under an indemnity insurance policy. To review a judgment on a directed verdict for plaintiff, defendant brings error.

Judgment reversed; verdict set aside; and new trial awarded.

Wm. S. Ryan, for plaintiff in error. Harper & Baker, for defendant in error.

Riley, Judge:

Belva B. Dye instituted in the Circuit Court of Roane County this action of assumpsit against Pennsylvania Casualty Company, a corporation, to recover $250.00 upon a hospital surgical operation under an indemnity insurance policy.

Defendant's demurrer to the declaration having been overruled, defendant filed a plea of non-assumpsit and a plea of the general issue under Code, 56-4-21, supported by a "Statement of Particulars of Defense" specifying:

(1) Fraud in the procurement of the policy by falsely answering in her application "Yes" to question number 8: "Are you now in good health and free from any mental or physical impairment or deformity?" And "No" to the question numbered 9: "Have you had any sickness or injury or received any medical or surgical advice or treatment in the past five (5) years?" The statement of particulars further states that the insured agreed in answer to question numbered 12 of the application that the falsity of any answer in the application would bar recovery and the policy should not become effective until the application was approved by the in surer and the policy accepted by the plaintiff wholly in good health and free from any injury.

(2) Said falsity of plaintiff's answers to questions 8 and 9 of the application, without any allegation of fraud, and insured's agreement contained in her answer to question number 12.

In answer to defendant's "Statement of Particulars of Defense" plaintiff filed a plea designated "plea of estoppel and waiver" stating that if any of the matters of defense set forth in the statement of particulars ever existed they were fully known to defendant on or prior to March 18, 1943; that on or after March 18, 1943, defendant accepted from plaintiff payment of the insurance premium owing on account of the policy which served to continue the policy in force after March 18, 1943; that by reason of the acceptance of said premium, any untrue statements made by plaintiff in the policy were waived and defendant is estopped from claiming that the policy was not in force at the time plaintiff was operated upon and incurred the surgical and hospital expenses set forth in her declaration and bill of particulars.

The Circuit Court overruled the defendant's demurrer to plaintiff's "plea of estoppel and waiver". Whereupon defendant replied generally to the plea. At the completion of the evidence on the second trial, the first trial having resulted in a hung jury, the court sustained plaintiff's motion to strike out that part of the defendant's evidence relating to the items contained in the statement of the particulars of defense except as to question number 8 in the application and that a verdict for plaintiff be directed in the amount paid by her for the operation and hospital expenses as shown by the evidence.

The court sustained this motion and directed a verdict for the plaintiff in the amount of $185.00 and entered judgment for plaintiff in that amount, to which judgment defendant prosecutes this writ of error.

On February 4, 1941, plaintiff made written application to the Pennsylvania Casualty Company for a hospitalization and medical expense policy, on the strength of which defendant issued to plaintiff a policy dated February 10, 1941, designated "HOSPITAL AND SURGICAL OPERATION EXPENSES INDEMNITY POLICY" which purported to insure defendant "against loss due to expense incurred through hospitalization and/ or surgical operation resulting * * * through disease, ". The application, which contains questions numbered eight, nine and twelve, and the answers thereto, as set forth in defendant's particulars of defense, was attached to the policy and made a part thereof.

Plaintiff paid the first premium due at the issuance of the policy and the subsequent premiums were paid by T. W. Dye, plaintiff's husband. By check dated March 18, 1943, and payable to the order of Kanawha Valley Insurance Agency, defendant's agent, Dye paid a quarterly premium in the amount of $6.60 which served to continue the policy until July 1, 1943. On August 11, 1943, the Kanawha Valley Insurance Agency addressed a letter to plaintiff enclosing a check for $32.90 "as a« refund of all premiums tendered under" the policy. This letter reads in part: "We learned that the question on your application which reads, 'Are you now in good health and free from any mental or physical impairment or deformity?' was answered incorrectly. According to our information, you were not in good...