Gillan v. Equitable Life Assur. Soc.

• Decision Date: 11 December 1942
• Docket Number: 31397.
• Citation: 6 N.W.2d 782,142 Neb. 497
• Parties: GILLAN v. EQUITABLE LIFE ASSUR. SOC.
• Court: Nebraska Supreme Court

6 N.W.2d 782

142 Neb. 497

GILLAN v. EQUITABLE LIFE ASSUR. SOC.

No. 31397.

Supreme Court of Nebraska

December 11, 1942

Syllabus by the Court.

1. In an action to recover benefits under a life insurance policy for permanent total disability, where the defense is fraud of insured in making false statements in the application, the burden is on insurer to prove that the statements were untrue, were made knowingly with fraudulent intent to mislead and deceive insurer, were material to the risk and that insurer relied on them.

2. Parol evidence is admissible to prove that misstatements in an application for life insurance and disability benefits were inserted by insurer's agent instead of truthful statements of applicant who was without knowledge of the discrepancies.

3. In an action to recover disability benefits under a life insurance contract, the issue of fact is a question for the jury where the defense is fraud of insured in procuring the policy and the evidence is conflicting but sufficient to support a verdict in favor of plaintiff.

4. In negotiations to procure life insurance, the solicitor and the examining physician are agents of the insurer and misstatements inserted by them in answers to questions in the application, without the knowledge or consent of the applicant, are not binding on the latter.

5. Harmless imperfections in single instructions are not sufficient grounds for the reversal of a judgment where the entire charge to the jury fairly states the law applicable to the issues and the evidence.

6. Where plaintiff recovers a judgment in an action on a life insurance policy, the court is authorized by statute to allow a reasonable attorney's fee as an item of costs. Comp.St.1929, sec. 44-346.

Brown Crossman, West, Barton & Fitch, of Omaha, and Sloans Keenan & Corbitt, of Geneva, for appellant.

Waring & Waring, of Geneva, and Perry, Van Pelt & Marti, of Lincoln, for appellee.

Heard before SIMMONS, C. J., and ROSE, EBERLY, PAINE, CARTER, MESSMORE, and YEAGER, JJ.

ROSE Justice.

This action was commenced in the county court of Fillmore county by Bertha E. Gillan, plaintiff, to recover from the Equitable Life Assurance Society, defendant, monthly instalments of disability benefits for April and May, 1941, each for $50. The action was defended on the ground that plaintiff procured the policy for disability benefits by false statements in her application for insurance and by false answers to questions in her examination by defendant's physician.

The county court decided the case in favor of plaintiff and entered judgment against defendant for $100. Defendant appealed to the district court.

Plaintiff in her petition pleaded that, in consideration of quarterly premiums of $21.85, defendant issued to her in January, 1929, a life insurance policy for $5,000. Pursuant to an option therein the policy was converted in January, 1934, into a 20-payment life insurance policy under which plaintiff was entitled to dividends. Each policy contained a provision for disability benefits of $50 a month and for waiver of premiums by defendant in the event of plaintiff's total and permanent disability. It was alleged that plaintiff became totally and permanently disabled in 1930 and that thereafter defendant paid the monthly instalments of $50 until April, 1941, but refused to make further payments and demanded reimbursement of disability benefits and of dividends previously paid to plaintiff; that the policy remains in full force.

In an answer to the petition, it was alleged that plaintiff procured by fraud the policy issued by defendant to her in January, 1929; that the application therefor, in connection with the medical examination to which she submitted and the history given by her, was the sole basis for the issuance of the policy; that the quarterly premium of $21.85 included quarterly payments of $2.90 for total and permanent disability; that the policy was issued by reason of the application and plaintiff's false statements of material facts; that, after plaintiff signed the application and before the policy was issued, she was required to appear before a medical examiner of defendant, state every physician or practitioner whom she had consulted or who had treated her during the past five years and to answer the following: Have you ever had or been treated for any disease or disturbance of the stomach, liver, intestines, kidney, bladder, or genito-urinary organs?

It is alleged in the answer that these questions were propounded by the medical examiner to plaintiff who answered "none" or "no" to each of them; that the answers were written by him in the part of the insurance contract containing the examination and that the statements were signed by her in his presence. It is further alleged by defendant that the answers to the foregoing questions were material to insurance and disability risks, were parts of the contract and were false in the following particulars: Prior to 1918, plaintiff had a disturbance or disease of the right kidney, which was anchored by a surgical operation, and submitted to an operation for the removal of the right fallopian tube and ovary. On May 14, 1928, she submitted to a surgical operation for the removal of the uterus containing tumors.

It is alleged in the answer that plaintiff agreed in writing as a part of her application that "the foregoing answers shall also become part of any policy contract that may be issued on the strength thereof."

It is also alleged in the answer that the original policy lapsed for nonpayment of a premium and was reinstated and converted into the new policy in reliance on a false certificate by plaintiff that she was in good health and on her false statements in her application and medical examination; that, so relying upon plaintiff's misrepresentation of material facts, defendant approved her application for total and permanent disability and paid her $50 a month from May 9, 1930, to April 9, 1941, or $6,550, and waived payment of premiums from the date of disability; that defendant did not discover the fraud until April, 1941. In a cross-petition defendant prays for judgment against plaintiff for $6,550, interest and costs.

In a reply to the answer plaintiff denied defendant's charges of fraud and alleged that defendant furnished its examining physician with blanks for answers to printed questions for the purpose of the examination; that plaintiff answered truthfully, in the presence and hearing of defendant's soliciting agent all...