Geer v. Union Mut. Life Ins. Co.

• Decision Date: 09 March 1937
• Citation: 273 N.Y. 261,7 N.E.2d 125
• Court: New York Court of Appeals Court of Appeals
• Parties: GEER v. UNION MUT. LIFE INS. CO.

273 N.Y. 261

7 N.E.2d 125

GEER

v.UNION MUT. LIFE INS. CO.

Court of Appeals of New York.

March 9, 1937.

Two actions by Lulu M. Geer against the Union Mutual Life Insurance Company. From a judgment of the Appellate Division of the Supreme Court in the fourth judicial department (247 App.Div. 609, 288 N.Y.S. 359), entered May 21, 1936, which unanimously affirmed a judgment of the Onondaga County Court affirming a judgment of the Municipal Court of the City of Syracuse entered upon a verdict in favor of plaintiff, defendant appeals.

The actions were brought to recover upon two policies of life insurance applied for in November, 1932, and issued by the defendant in December, 1932, in which plaintiff, the wife of the insured, was named as beneficiary. The insured died in November, 1933, from carbon monoxide gas poisoning.

Reversed, and complaints dismissed.

FINCH and RIPPEY, JJ., dissenting. Appeal from Supreme Court, Appellate Division, Fourth Department.

Jerome K. Cheney, of Syracuse, for appellant.

George R. Fearon, Henry R. Follett, and M. Harold Dwyer, all of Syracuse, for respondent.

LEHMAN, Judge.

The decedent in his application for insurance answered ‘No’ to the question: ‘Have you had any treatment within the last five years at any dispensary, hospital or sanatorium;’ and in answer to the direction, ‘Give name and address of each physician consulted by you during the past ten years, and cause for consultation,’ the decedent stated: ‘Dr. N. G. Darling, 31 North State Street, Chicago, Ill., Nervousness.’ The evidence shows that on October 4, 1928, the decedent visited Dr. Spire. Dr. Spire testified that according to notes made at that time, the decedent told him, ‘Returned from a long trip five days ago, had some coughing, felt bad the following day, took a laxative, has just a little hacking cough, his work takes him to large cities, has been nervous for the past six months, last April had influenza in Chicago. Has gained in weight past summer following that * * * illness.’ The physician examined the decedent at that time. He had a temperature of 102°. The physician treated him then, but did not see him again till October 11th, one week later. Dr. Spire then sent him to the Syracuse General Hospital where he remained till October 26th. Dr. Spire diagnosed the decedent's ailment as para-typhoid and treated him for that ailment at the hospital, and after discharge from the hospital until December 17, 1928, though the X-ray examination and the tests made at the hospital were negative and failed to show that the plaintiff was suffering from that disease. The hospital record, under the heading ‘Past History,’ states in part: ‘Felt badly and coughed. About Sept. 30/28 gradually became worse with no outstanding symptoms except cough and tired feeling. Had influenza in April/28 from which he never fully recovered.’ In 1932 the decedent again consulted Dr. Spire on two occasions. Then Dr. Spire diagnosed his ailment as nervousness.

Section 58 of the Insurance Law (Consol.Laws, c. 28) provides that ‘all statements purporting to be made by the insured [in an application attached to the policy of life insurance] shall in the absence of fraud be deemed representations and not warranties.’ The effect of the statute is that a ‘misstatement, even though stated in the form of a warranty, if made in good faith and without this element of fraud passed into the same class as an ordinary representation and became a defense to the policy only if it was material. On the other hand, the effect of a misrepresentation was left unchanged by the statute. If material it constituted a defense although made innocently and without any feature of fraud; it was sufficient that it was material as an inducement for the issue of the policy, and was untrue.’ Eastern District Piece Dye Works, Inc., v. Travelers' Ins. Co., 234 N.Y. 441, 449, 138 N.E. 401, 403, 26 A.L.R. 1505. Here, though the evidence conclusively establishesthat the decedent in his application failed to disclose that he had consulted Dr. Spire or had been treated at a hospital within five years of the date of the application, the court submitted to the jury the question whether the decedent had in his application made a material misrepresentation. The jury decided that no material misrepresentation was made. The question presented is whether, upon the evidence, it conclusively appears that there was a material misrepresentation.

A life insurance company is free to choose the risks which it will assume. An applicant for life insurance is required to answer certain questions which are prepared for the purpose of facilitating the examination and appraisal by the company of the insurability of the risk. In effect the company states to the applicant that the answers to those questions are intended to guide the company in deciding whether to accept or reject the application. By posing the question the insurer has indicated ‘that it wanted to know the facts and that it intended and expected the applicant to speak the truth so that it might acquire information concerning them. Any misrepresentation which defeats or seriously interferes with the exercise of such a right cannot truly be said to be an immaterial one.’ Travelers' Ins. Co. v. Pomerantz, 246 N.Y. 63, 68, 158 N.E. 21, 23.

No method has been devised by which the processes of the human mind can be charted and the force of inducement mechanically measured. The materiality of a representation may then depend upon the idiosyncrasies or the individuality of the person who acts upon the representation, and often must be determined as a question of fact by the trier of the facts. Nevertheless at times, departure in a representation from an accurate statement of the truth may be so slight that we may confidently say that the difference could not affect decision of any reasonable person. Then as a matter of law the misrepresentation is not material. On the other hand, where an applicant for insurance has notice that before the insurance company will act upon the application, it demands that specified information shall be furnished for the purpose of enabling it to determine whether the risk should be accepted, any untrue representation, however innocent, which either by affirmation of an untruth or suppression of the truth, substantially thwarts the purpose for which the information is demanded and induces action which the insurance company might otherwise not have taken, is material as matter of law. The question in such case is not whether the insurance company might perhaps have decided to issue the policy even if it had been apprised of the truth, the question is whether failure to state the truth where there was duty to speak prevented the insurance company from exercising its choice of whether to accept or reject the application upon a disclosure of all the facts which might reasonably affect its choice. Jenkins v. John Hancock Mut. Life Ins. Co., 257 N.Y. 289, 178 N.E. 9. Cf. Keck v. Metropolitan Life Ins. Co., 238 App.Div. 538, 264 N.Y.S. 892, affirmed 264 N.Y. 422, 191 N.E. 495.

That does not mean that every failure to disclose each occasion upon which the applicant has visited or consulted a physician constitutes a misrepresentation, material or otherwise. A reasonable construction of a question in an application blank which calls for information about consultations with physicians or about medical treatments, may limit the scope of the question to consultations or treatments for ailments which are not trivial and exclude the applicant's ‘visits for medical advice for such minor ills as constipation or common cold in the head, which are readily relieved by simple remedies and do not impair his general health.’ Jenkins v. John Hancock Mut. Life Ins. Co., supra, 257 N.Y. 289, at page 293, 178 N.E. 9, 10. Cf. Travelers' Ins. Co. v. Pomerantz, 246 N.Y. 63, 158 N.E. 21. In such case the decision that failure to disclose a visit for medical advice creates no fatal infirmity in the policy of insurance thereafter issued rests upon construction of the application and determination that failure to disclose such a visit constitutes no suppression of the truth and, thus, no false representation that there had not been such a visit rather than upon determination that, though a false representation was made, it was not material. True, the test of whether the ailments, for which medical advice or treatment was sought, were trivial, may be decisive in either view of the question, and there may in most cases be no occasion to draw such distinctions. As Judge Finch points out, an applicant may hardly be expected to remember each occasion upon which he sought medical advice for a trivial ailment which passed away leaving no permanent effect; and a question in an application blank may not reasonably be construed as calling for information, which the person to whom the question is posed could not be expected to remember. That proposition is self-evident. Equally clear is the proposition that a failure by the applicant to disclose a visit which the applicant could not reasonably be expected to remember could not mislead the insurance company and, therefore, would not be a material misrepresentation. Thus in a case where the courts have held that the medical visit was for advice in regard to an ailment so trivial that an applicant was not called upon to remember or to give information concerning it, the courts have not always kept distinct, in word or thought, the grounds upon which failure to disclose information concerning medical visits might be regarded as inconsequential.

In this case the situation is quite different. We have an admission or statement made by the decedent to a physician whom he consulted in October, 1928, that the previous April he had an attack of influenza from which, it appears, he had not at that time recovered. We have conclusive proof that at that time the decedent was sent to a hospital where he...