Equitable Life Assur. Soc. of United States v. Ashby
| Decision Date | 22 March 1939 |
| Docket Number | 28. |
| Citation | 1 S.E.2d 830,215 N.C. 280 |
| Parties | EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES v. ASHBY. |
| Court | North Carolina Supreme Court |
Total and permanent disability and double indemnity provisions of life policy were properly rescinded on ground that insured signed and filed with insurer paper writing containing false representations as to health of which insurer's medical examiner had no personal knowledge as to their truth or falsity, and that insured carelessly signed instrument without reading it; thereby adopting the statements as his own, which statements were material as a matter of law.
Civil action to cancel and rescind the total and permanent disability and double indemnity provisions contained in a life insurance policy.
The plaintiff contends that the issuance of the policy containing said provisions was based upon representations made in the application for the policy and in the application, Part II being statements made to the medical examiner; that certain of the representations in the application, Part II, were material and false and by reason thereof the total and permanent disability and the double indemnity clauses in said policy are void. Under the contract of insurance the application, Part I, being the application signed and delivered to the soliciting agent, and the application, Part II, being the statement signed and delivered to the medical examiner, became and are a part of the contract of insurance.
The plaintiff alleges that in his statement to the medical examiner the insured falsely represented: (1) That he had never been under observation or treatment in any hospital asylum or sanatorium; (2) that he had never been treated for any disease or disturbance of the nose, tonsils, throat or lungs (hay fever or rose fever); (3) that he had never had any illness or injury not mentioned above; (4) that he had not consulted any physician or practitioner who had treated him during the past five years; and that in the written representations so made the following provision was incorporated: "I agree that the foregoing answers shall be part of my application, which shall consist of Parts I and II taken together, and that the foregoing answers shall also become part of any policy contract that may be issued on the strength hereof."
In respect thereto the plaintiff offered evidence tending to show that the defendant was a patient in the Martin Memorial Hospital at Mount Airy, N. C., from August 31, 1928, to October 6, 1928, and that following this he convalesced at his home for two or three weeks before he returned to work that at the time he was confined in the Sanatorium he was suffering from pleurisy with effusion on his left side; that he ran a temperature and it was necessary that he be aspirated and the fluid in the lung cavity drawn off; that he was treated by his brother, Dr. E. C. Ashby, and by Dr. P. A. Yoder, a tuberculosis specialist; that he developed tuberculosis, which was discovered in June, 1934; and that the attack of tuberculosis of 1934 was a different manifestation of the same trouble evidenced by the pleurisy attack in 1928.
In his answer the defendant admits that the application, Part II, was signed by him; that he was confined in the Martin Memorial Hospital in the year 1928 with an attack of pleurisy and that the application, Part II, signed by him, contained certain questions and answers thereto, but denies that he made answers to any questions propounded therein, except to state to the examining physician that many years ago he had an operation. He alleges that the examining physician was the agent of the plaintiff in this cause and as such answered such questions without asking the defendant anything in relation thereto.
Issues were submitted to and answered by the jury as follows:
Thereupon judgment was entered decreeing that the provisions contained in the policy sued upon relating to total and permanent disability and for double indemnity for death by accident as contained on Page 2-A, Policy No. 8707102, are void and of no effect upon the date of issuance of said policy, and rescinding said provisions. The defendant excepted and appealed.
Woltz & Barber and E. C. Bivens, all of Mount Airy, for appellant.
Manly, Hendren & Womble and I. E. Carlyle, all of Winston-Salem, and Folger & Folger, of Mount Airy, for appellee.
The medical examiner wrote in the answers to the questions contained in application, Part II. He testified as to a number of these questions that he received the information upon which he based the answer from the applicant. As to the particular questions and answers in issue he testified: "I must have received the information from the insured." The defendant denied that he gave the medical examiner the information upon which said answers were based, but testified that the medical examiner made a physical examination, asked him a few questions, filled in the answers and told him to sign the statement. He further stated that he signed the statement containing the answers without reading them because he was in a hurry. He makes no contention that the medical examiner knew that he had been confined in a sanatorium or that he had suffered an attack of pleurisy, or had been under the care of physicians. On the contrary, all the evidence tends to show that the medical examiner had no information as to the representations concerning which issues were submitted to the jury. So far as the record discloses the defendant does not contend to the contrary.
Is the falsity of the representations contained in application, Part II, which forms a part of the contract of insurance, made in a written statement which was signed but not read by the insured, sufficient cause for rescinding so much of the contract of insurance as is not protected by the incontestability clause?
The representations made were material to the risk. They are in the form of written answers made to written questions. In such case the questions and answers are deemed to be material by the acts of the parties to the contract. Bryant v. Insurance Co., 147 N.C. 181, 60 S.E. 983; Mutual Life Insurance Co. v. Woolen Mills, 172 N.C. 534, 90 S.E. 574; Inman v. Sovereign Camp, Woodmen of the World, 211 N.C. 179, 189 S.E. 496; Petty v. Insurance Co., 212 N.C. 157, 193 S.E. 228.
Except in policies issued under provisions of C.S. § 6460 material representations which are false need not be fraudulently made to invalidate the policy. "In cases where the misrepresentation is positive and of a fact actually material, it is not necessary to prove that the representation was fraudulently made; the materiality of the misrepresentation, and its proven falsity does away with the necessity of showing actual fraud." Joyce on Insurance, Vol. 3, 2d Ed., Page 3068. Richards on the Law of Insurance, 4th Ed., Page 136. Such representations when false invalidate the policy without further proof of actual conscious design to defraud. Mutual Life Insurance Co. v. Hilton-Green, 241 U.S. 613, 36 S.Ct. 676, 60 L.Ed. 1202. The decisions in this court are consistently to like effect. Bobbitt v. Insurance Co., 66 N.C. 70, 8 Am.Rep. 494; Mutual Life Insurance Co. v. Woolen Mills, supra; Inman v. Sovereign Camp, Woodmen of the World, supra; Petty v. Insurance Co., supra.
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