Freedman v. Mut. Life Ins. Co. of N.Y.

• Court: United States State Supreme Court of Pennsylvania
• Writing for the Court: DREW, Justice
• Citation: 21 A.2d 81,342 Pa. 404
• Decision Date: 30 June 1941
• Parties: FREEDMAN v. MUTUAL LIFE INS. CO. OF NEW YORK.

21 A.2d 81
342 Pa. 404

FREEDMAN
v.
MUTUAL LIFE INS. CO. OF NEW YORK.

Supreme Court of Pennsylvania.

June 30, 1941.

21 A.2d 82

Appeal No. 180, January term, 1941 from order of Court of Common Pleas, Cumberland County, at No. 313, September term, 1939; Fred S. Reese, President Judge.

Action in assumpsit by Esther Freedman against the Mutual Life Insurance Company of New York on a life policy issued by defendant to plaintiff's husband, who died on January 5, 1939. Verdict for plaintiff for $5,508.33. From order awarding defendant a new trial but refusing defendant's motion for judgment non obstante veredicto, the defendant appeals.

Order reversed, and judgment entered for defendant.

Argued before SCHAFFER, C. J, and MAXEY, DREW, LINN, STERN, PATTERSON, and PARKER, JJ.

21 A.2d 83

Douglass D. Storey, of Harrisburg, Frederick J. Templeton, of Carlisle, and Hause, Storey & Lick, of Harrisburg, Louis W. Dawson, of New York City, for appellant.

E. M. Biddle, Jr., and J. Boyd Landis, both of Carlisle, for appellee.

DREW, Justice.

This action of assumpsit was instituted by Esther Freedman, as beneficiary, to recover the proceeds of a policy of life insurance issued by defendant to her husband, who died on January 5, 1939. Payment was refused upon the grounds that the insured was not in good health at the time the policy was applied for and issued, and that he gave false and fraudulent answers to medical questions in his application. The case was tried in the court below and the jury found for plaintiff. A new trial was awarded by the court en banc, but defendant has taken this appeal from the refusal of its motion for judgment n.o.v.

On May 2, 1938, the insured, Edgar Freedman, a capable business executive, 48 years of age, applied to defendant for a $5,000 policy of life insurance. He was asked the following question by the defendant's medical examiner: "20. State every physician or practitioner whom you have consulted, or who has prescribed for or treated you in the past five years for any ailment, serious or not serious." The insured answered, "None". In answer to the question: "22. Have you stated in answer to question 20 every physician or practitioner consulted during the past five years and dates of consultation ?", he answered: "Yes". These questions and answers formed part of the application, which the insured signed and affirmed to be true. The policy issued on May 20, 1938, with the proviso that it should not take effect unless received during the insured's "continuance in good health" and until the first premium should have been paid under the same circumstances. The insured died within eight months of the effective date appearing on the policy.

At the trial, defendant offered evidence to show that the insured died of coronary occlusion, which is the closing of the coronary artery feeding blood to the heart muscle, and that during the five-year period referred to in questions 20 and 22 he had consulted or visited five physicians for various complaints. Dr. Robert Denison testified from his records that the insured had consulted him nine times from October to December, 1934, complaining of nervous and digestive disorders, with pains and a hollow feeling in his chest. Dr. Denison examined his heart, and directed him to obtain a cardiogram reading. During October he found the insured's blood pressure high. In November, another examination disclosed "poor heart tones" and lowered blood pressure, and the physician prescribed digitalis, a heart stimulant.

Dr. Guy E. Ohlson testified that the insured visited him once in October, 1934, for a cardiogram of his heart. The results indicated certain irregularities which the doctor testified might be attributable to an impairment of the condition of the heart.

Dr. John B. McAlister testified from his notes that the insured consulted him six times from November, 1936, to June, 1937, complaining chiefly of dizziness and constipation. Although the doctor found no definite evidence of heart trouble, he stated that the insured was "heart conscious", and that on one visit his heart action was irregular and a heart tonic was given. The office memoranda or records of this physician, made at the time of consultation and including a statement of the insured's complaints, the results of his examination, and the treatment prescribed, were admitted by the trial judge as documentary evidence of the facts therein contained under the Uniform Business Records as Evidence Act of May 4, 1939, P.L. 42, 28 P.S. § 91a et seq. The records of Dr. Denison and the cardiogram made by Dr. Ohlson were also admitted on this authority for the same purpose.

It was also stipulated that the insured had made four calls upon Dr. L. C. Goldman in December, 1937, and three in March, 1938, receiving treatment for colds. The druggist who filled various prescriptions for the insured, including one for digitalis, testified that two of the prescriptions had been refilled by the insured 30 times, although the digitalis was dispensed but once. Copies of these prescriptions were admitted in evidence.

In rebuttal, plaintiff and the insured's secretary testified that they had never known him to miss a day from his work for illness, that his health was good until the day of his death, and that they had no knowledge of his visits to the physicians who testified. They stated that he was an indefatigable worker, taking no vacations

21 A.2d 84

and devoting only five or ten minutes to his meals.

In granting the new trial, the court below held that there was sufficient proof, documentary and otherwise, to establish that the insured gave false answers to the questions involved, and that the verdict of the jury was against the weight of the evidence. Judgment n.o.v. was refused, however, upon the ground that there was no uncontradicted, documentary proof of bad faith, which would warrant the withdrawal of the case from the jury.

We think in so doing the court below mistook the effect of our decisions. The rule governing cases of this sort was set forth in Evans v. Penn Mutual Life Ins. Co., 322 Pa. 547 at page 555, 186 A. 133, at page 139 (and reiterated in Indovina v. Metropolitan Life Ins. Co., 334 Pa. 167, 5 A.2d 556, Bailey v. Pacific Mutual Life Ins. Co., 336 Pa. 62, 6 A.2d 770, and Reeder v. Metropolitan Life Ins. Co., 340 Pa. 503, 17 A.2d 879): 'Where it affirmatively appears, from sufficient documentary evidence, that the policy was issued in reliance on false and fraudulent statements, made by or on behalf of the insured, as where false answers are shown to have been given by insured under such circumstances that he must have been aware of their falsity, the court may direct a verdict or enter judgment for the insurer." (Italics added). Thus, where it is established "by uncontradicted documentary evidence that the insured has consulted physicians so frequently, or undergone medical or surgical treatment so recently, or of such a serious nature, that a person of ordinary intelligence could not have forgotten these incidents in answering a direct and pointed question in an application for insurance, bad faith may be inferred as a matter of law if the insured denies in his answer that any physician has been consulted, or any medical or surgical treatment has been received during the period of inquiry.

It is true, as stated in Adams v. Metropolitan Life Ins. Co., 322 Pa. 564, 567, 186 A. 144, 145: "* * * the failure to report every attendance or treatment by a physician does not alone constitute fraud, as for instance where the application does not disclose attendance for headaches, grippe, acute colds, indigestion, or other comparatively minor illnesses." But the inadvertent omission to refer to isolated and trivial medical attentions cannot be confused with deliberate falsifications or plain disregard for the truth. The credulity of the court cannot be taxed too far by pleas of forgetfulness. Thus in Guardian Life Ins. Co. of America v. Clum, 3 Cir, 1939, 106 F.2d 592, page 594, where the insured did not report visits to physicians and the taking of a cardiogram of his heart action in applying for insurance, the court correctly stated the rule of the Pennsylvania cases to be that, "a normal man is not allowed to go too far in basing his good faith on assertions that he has forgotten what those in possession of their ordinary faculties would remember." See Bailey v. Pacific Mutual Life Ins. Co., supra (where the insured had consulted four physicians on 13...