Fitzgerald v. Metro. Life Ins. Co.

• Decision Date: 14 August 1916
• Citation: 98 A. 498
• Parties: FITZGERALD v. METROPOLITAN LIFE INS. CO.
• Court: Vermont Supreme Court

98 A. 498

FITZGERALD

v. METROPOLITAN LIFE INS. CO.

Supreme Court of Vermont. Rutland.

Aug. 14, 1916.

[Copyrighted material omitted.]

Exceptions from Bennington County Court; Frank L. Fish, Judge.

Assumpsit by Mary E. Fitzgerald against the Metropolitan Life Insurance Company. Judgment for plaintiff, and defendant brings exceptions. Reversed and remanded. Stay of entry of judgment was granted, and plaintiff moved for a rehearing. Motion overruled, and stay of entry vacated.

Argued before POWERS, C. J., and MUNSON, WATSON, HASELTON, and TAYLOR, JJ.

Holden & Healy and D. A. Guiltinan, all of Bennington, for plaintiff. W. B. Sheldon, of Bennington, F. C. Archibald, of Manchester Center, and Martin T. Nachtmann, of Albany, N. Y., for defendant.

MUNSON, J. This suit is brought on a policy of insurance issued by the defendant on the life of Winnie McLean, a married woman 24 years of age, which was first made payable to John McLean, her son, with right of revocation, and was afterwards made payable to the plaintiff, her sister, without right of revocation. The policy was issued September 21, 1911; the change of beneficiary was made January 31, 1912; and the insured died May 3, 1912. The claim is contested on the ground that the policy was procured by the false and fraudulent representations of both the insured and the plaintiff, and as the result of a fraudulent and unlawful combination between the two, and on the further ground that the plaintiff obtained possession of the policy by means of false and fraudulent representations.

It appeared from exhibits introduced by the defendant that there were three policies on the life of Mrs. McLean of earlier date than the one in suit, two of which were issued by the John Hancock Mutual Life Insurance Company and one by the defendant. The first of the John Hancock policies was issued to her in 1905 and before her marriage. The second John Hancock policy was issued July 5, 1911, on an application made June 22 and a medical report dated June 25. The first policy of the defendant was issued July 24, 1911, on an application made July 12 and a medical report dated July 15. In this policy Frank McLean, the husband of the insured, was named as beneficiary. There were two applications for the policy in suit The first was dated August 21, 1911, and designated the plaintiff as beneficiary, without right of revocation; and a statement in continuation of this application and an accompanying report of the examining physician were made August 26. The defendant refused to issue a policy on this application, on the ground that the person named as beneficiary had no insurable interest; the applicant having a husband and child living. The plaintiff, the designated beneficiary, was informed of this refusal, and thereupon procured the making of the second application. This was dated September 18, 1911, and upon its receipt at the home office of the defendant the policy in suit was issued. The report of the medical examiner stated that there were no indications of disease of the organs of respiration, and represented the applicant to be in good health and of sound constitution. Her weight was given as 130 pounds and her respiration as 18 to the minute.

Uncontradicted evidence introduced by the defendant tended to establish the following matters relating to Mrs. McLean's life between August 26, the date of the medical report sent to the company, and September 21, the date of the policy. August 30 she applied for examination at a charitable institution for the relief of persons having pulmonary tuberculosis in its incipient stages, located at Troy, N. Y., and herein called the dispensary, and was examined by the physician in charge. She told the physician that she thought her trouble began with a cold which she caught July 15; that from that time she had lost appetite and weight and had night sweats and a cough; that the cough had gradually grown worse and produced large expectorations of sputum; and that she had a slight hemorrhage August 15. The physician's examination disclosed the usual symptoms and marks of pulmonary disease, which are given in detail in the exceptions. Her weight was found to be 97 pounds, and her respiration about 26 in a minute. Mrs. McLean returned to the dispensary September 6, and was again examined and found to be somewhat worse. She returned September 13 for a further examination, and was then found to have passed the incipient stage of tuberculosis. September 15 she entered the Lake View Sanitarium in Troy, a charitable institution for the care and treatment of persons suffering from pulmonary tuberculosis, and was examined by the physician in charge, who diagnosed the case as pulmonary tuberculosis in an advanced stage. In connection with this examination Mrs. McLean told of a hemorrhage which occurred September 1. She remained in the sanitarium until September 25, during which time she was for the most part confined to her bed.

The physician who examined Mrs. McLean as an applicant, and made the report of August 26, was the regular local examiner of the defendant. He was called as a witness for the defense, and testified in substance that his examination of the chest was without a removal of the underclothing; that the examination was by auscultation, by the ear alone, and with the stethoscope, and that he found the condition of the lungs to be as stated in his report; that the number of respirations per minute was determined by count, but that the weight was given from her statement.

The sheet of the application blank containing the questions to be answered by the examining physician has also a series of statements to be made by the applicant to the physician. Among these are statements relating to diseases and infirmities, previous injury or illness, treatment by an attending physician or in a dispensary, being in an institution as an inmate, and the previous taking of life insurance. The list of diseases includes consumption, disease of the lungs, habitual cough, hemorrhage, and spitting or raising blood. These statements are framed as negations, with an addition showing that any exception is to be given in a blank following the statement. They appear here above the signature of the applicant, and with the spaces left blank. The examiner testified that he read each statement to the applicant and asked her if there were any exceptions, and that she said there were none. He did not claim to have an independent recollection of this, but said he relied upon the paper.

The plaintiff's connection with the procurement of the insurance is shown by the testimony of Schiemenz, who was a local collector and solicitor of the defendant residing at Bennington. He visited the Fitzgerald house in North Bennington every week to make collections, and on one of these occasions Mrs. Fitzgerald asked him if it would not be a good plan to take out a policy for Mrs. McLean. Mrs. McLean was there at the time and consented to this being done, and the first application was then prepared and signed. All the inquiries were answered by Mrs. McLean, except that calling for the designation of one to receive the proceeds. This was answered, after a little talk about it, by Mrs. Fitzgerald. When the application was returned, Schiemenz saw Mrs. Fitzgerald and told her the company would not issue a policy without having the beneficiary changed, and she said they would change the beneficiary. He inquired for Mrs. McLean, and was told by Mrs. Fitzgerald that she had gone to Troy. He then wrote the second application on Mrs. Fitzgerald's suggestion, changing the answers regarding the beneficiary as she directed. She said she was going to Troy, and would take the application down and have it signed, and he left it with her for that purpose. She returned it to him with Mrs. McLean's name affixed, and he signed as witness. When he received the policy he took it to Mrs. Fitzgerald to deliver and inquired for Mrs. McLean. Mrs. Fitzgerald said she was in Troy, and told him to leave the policy and she would deliver it to her. He asked her if Mrs. McLean was in apparently good health, and she said "Yes," and he thereupon left the policy. The plaintiff was in court throughout the trial, but did not take the stand.

In preparing the application of September 18, Schiemenz entered, with but slight and unimportant variations, the answers contained in the application of August 21, except the two which related to the beneficiary and were changed by direction of the plaintiff. No other medical examination was had besides that of August 26, and no other report made. These applications contain a printed declaration and agreement that the statements and answers of the applicant contained therein, and also her statements and answers to the medical examiner, are correct and true, and are to form the basis of the contract of insurance, if one is issued. Defendant's attorney argued to the jury that this provision was a warranty that the statements and answers referred to were true at the time the second application was made. Plaintiff's attorney argued to the jury that this provision had no relation in point of time to the execution and delivery of the second application, but related back to the date of the medical report, and that the character of the applicant's statements was to be determined by the knowledge she had at that time.

The question thus raised bears upon the negative statements of the insured concerning the existence of pulmonary disease, treatment by a physician within two years, and having been an inmate of an institution. If the statements are to be taken as having reference to the date of the second application, their known falsity in the two particulars last named will be at once established. And if considered with reference to the date of the medical report and the applicant's understanding of her condition at that time, with a result favorable to the plaintiff, there will remain...