Fidelity & Casualty Co. of New York v. Cross

• Decision Date: 19 March 1923
• Docket Number: 23080
• Parties: FIDELITY & CASUALTY CO. OF NEW YORK v. CROSS
• Court: Mississippi Supreme Court

95 So. 631

131 Miss. 632

FIDELITY & CASUALTY CO. OF NEW YORK v. CROSS

No. 23080

Supreme Court of Mississippi

March 19, 1923

1 INSURANCE. Examinations showing applicant physically sound held not within term "medical or surgical attention received" in application.

A question in an application for insurance which calls for a disclosure of the medical or surgical attention previously received by the applicant does not require ail applicant to disclose the fact of previous medical examinations which showed that the applicant was in good health and physically sound at the time such examinations were made, as such examinations do not come within the meaning of the term "medical or surgical attention received" as used in the application.

2 INSURANCE. Insurer cannot avoid liability on life policy because answers in application untrue where full disclosure made to agent.

Where an applicant for insurance fully disclosed to the agent of an insurance company the facts in regard to a prior illness suffered by him, and from which he had apparently fully recovered, and the agent advised him that the fact of such illness was not material, and the agent, with full knowledge of all the facts, took charge of the preparation of the application for insurance, and the applicant did not sign such application and had no knowledge of the fact that it had been prepared until the policy was delivered, the insurance company cannot avoid liability on the policy on the ground that the application failed to disclose material information, although the insured accepted the policy with this unsigned application attached thereto as a part thereof.

3 INSURANCE. Insurer cannot avoid liability on policy for failure of application to disclose material information because of omission of agent, and applicant acts in good faith.

If an agent of an insurance company undertakes the preparation of an application for insurance in his company, and suggests or advises what facts are material to the risk, or what questions shall be answered, or what will be a sufficient answer, and, by mistake or omission, fails to record material facts within his knowledge, the company cannot avoid liability on the policy on the ground that the application failed to disclose material information, if the applicant has acted in good faith throughout and has fully disclosed the facts to the agent.

4. APPEAL AND ERROR. Findings of chancellor not disturbed unless are manifestly wrong.

The findings of a chancellor upon conflicting evidence will not be disturbed on appeal where it cannot be said that such findings are manifestly wrong.

HON. A J. McINTYRE, Chancellor.

Appeal from chancery court of Clay county, HON. A. J. MCINTYRE Chancellor.

Suit by Dr. Chaillos Cross against the Fidelity & Casualty Co. of New York. From a judgment for plaintiff, defendant appeals. Affirmed.

Affirmed.

Alexander & Alexander, for appellants.

Breach of warranty on the part of appellee regarding his previous medical or surgical attention, and his condition of health.

There is one indisputable fact that stands boldly out in this case, and that is that the statements contained in the application are admittedly false.

Not only are the statements contained in the application made warranties, by the terms of the contract itself, but as a matter of law "the general rule that statements relating to the health and physical condition of the applicant for insurance are material to the risk and, if false, are fatal to the policy, is well settled." Cooley's Briefs Volume No. 3, p. 2096.

We appreciate that our court has been liberal in drawing the distinction between representations and warranties, but we are unable to find any case where recovery could be had on a policy when an applicant either made or knowingly permitted false statements to be incorporated in his application of matters material to the risk. 14 Ruling Case p. 1027; 14 R. C. L. p. 1069. We refer the court especially to the case of Hoke v. National Life & Accident Insurance Company, 103 Miss. p. 269, 60 So. 218.

This case is unlike the case of Fidelity Mutual Life Insurance Company v. Miazza, 93 Miss. 422, 48 So. 1017. In the Miazza case the applicant for insurance informed the company of his illness and confinement in a sanitarium at Memphis, and the court merely held in that case that the case would not be reversed, because the applicant for insurance did not give the company the details of his illness; the court saying: "We only hold that where there has been a disclosure of this kind, setting out in general terms the nature of the malady, it becomes peculiarly a question of fact for the jury as to whether the applicant has sufficiently gone into detail of his illness.

Appellee was guilty of gross fraud and deception, and is not entitled to recover in a court of equity, regardless of any notice or knowledge by the broker, Savery?

The fact that the agent, Savery, may have had some knowledge of the influenza attack will not relieve Dr. Cross from coming into a court of equity with clean hands. If there had been a deliberate effort on the part of Mr. Savery to defraud the appellant company, Dr. Cross would not be thereby entitled to recover when he, with full knowledge of all the facts permitted the company to issue a policy on himself as a risk, when he was not then in good health, and when the company had not been advised of his previous conditions of health.

The policy provides that "the falsity of any statement on the application for this policy materially affecting either the acceptance of the risk or the hazard assumed hereunder, or made within intent to deceive, shall bar all right to recover under this policy." The falsity is the gist of our defense.

We most earnestly insist that this company should not be penalized into insuring a sick man merely because the agent, Savery, seemed to be looking after the interest of Dr. Cross instead of the company. The right of Dr. Cross to recover depends upon his bona fides, and by reason of his peculiar knowledge of all the facts, it was his duty to disclose them in full.

Vol. E, page 2569, Cooley's Briefs, Vol. 7 (Supplement) Cooley's Briefs, page 2569. Lyon v. United Moderns, 184 Cal. 470, 4. L. R. A. (N. S.) 347; Schwartz v. Royal Neighbors of Am., 108 P. 51; McComb v. Insurance Company, 141 N.W. 328; Bonewell v. Insurance Company, 125 N.W. 59; Hollenbeck v. Insurance Company, 113 S.W. 217; Mallen v. National Life Insurance Association, 153 S.W. 1065; Mudge v. S.Ct. I. O. O. F., 112 N.W. 1130, 14 L. R. A. (N. S.) 279, 14 R. C. L. page 353; 48 R. C. L. (N. S.) 714, 13 L. R. A. (N. S.) 856; Maier v. Fidelity Mut. Life Asso., 24 C. C. A. 243, 47 U.S. App. 329, 78 F. 570; Gardner v. North State Life Insurance Company, supra; Tiffany, Agency, pp. 229-326; Sprinkle v. Knight Templar & M. Life Indemnity Co., 124 N.C. 405, 32 S.E. 734; Tiffany, Agency pp. 262, 263; Sprinkle v. Knights Templar & M. Life Indemnity Co., 124 N.C. 405, 32 S.E. 434; Commercial Bank v. Burgyn, 110 N.C. 267, 17 L. R. A. 326, 14 S.E. 623; Stanford v. A. F. Messick Grocery Co., 143 N.C. 419, 45 S.E. 815.

Paine & Paine, for appellee.

Counsel for appellant in their brief clearly demonstrate that this is simply an appeal on controverted facts. They assign four alleged errors, but in their brief have abandoned the second assignment, and we will of course not burden the court by replying to this alleged error.

Counsel's first "ground for which we ask for reversal," is the alleged "breach of warranty on the part of appellee regarding his previous surgical or medical attention and his condition of health." They cite several authorities including one from Mississippi. We do not take issue with them as to this law and will not burden the court with any reply thereto for the simple reason that it was not applicable to appellant's contention. Take for example the Mississippi case, to-wit: Hoke v. National Life & Accident Insurance Company, 103 Miss. 269.

In that case the court had before it an appeal from a controverted fact decided by a jury in favor of the insurance company. Hoke swore he did not sign the application, which contained a misstatement material to the risk and that he did not know what was contained therein. The insurance company, however, produced the original application, with Hoke's name signed to it and then by a comparison of signatures proved to the satisfaction of the jury that he did actually sign the application. Of course, if he signed it, he knew it contained false warranties, and the court properly held the policy void and affirmed the case.

We respectfully submit that instead of this case being in point to sustain appellant, that it is an authority for appellee.

We insist in the first place there was never any application binding appellee, because he never saw it and never signed it and knew nothing about it and in the second place even if it could be held by any legal legerdemain that it was his application, that he made full disclosures to the agent of appellant and if this agent overlooked writing the facts in the application or thought them of no consequence, appellee is not bound by it.

By issuing and delivering the policy in this case without ever having had any application executed by appellee, the appellant waived the necessity of the application and cannot bind the appellee with any alleged breach of warranty or misrepresentation in the so-called unsigned application. See Georgia Home Insurance Co. v. Homes, 23 So. 183.

But counsel argued appellee is bound to know that the application concealed material facts, because he kept the policy with a copy of the application on the back of it. In reply to this we insist that since the appellee made no application the...