Greensboro Nat. Life Ins. Co. v. Southside Bank

• Citation: 206 Va. 263,142 S.E.2d 551
• Court: Virginia Supreme Court
• Decision Date: 14 June 1965
• Parties: GREENSBORO NATIONAL LIFE INSURANCE COMPANY v. SOUTHSIDE BANK et al.

Page 551

142 S.E.2d 551

206 Va. 263

GREENSBORO NATIONAL LIFE INSURANCE COMPANY v. SOUTHSIDE BANK et al.

Supreme Court of Appeals of Virginia.

June 14, 1965.

Dabney Overton, Warsaw (Overton & Overton, Warsaw, on brief), for plaintiff in error.

Gordon Lewis, Tappahannock (Joseph E. Spruill, Jr., Tappahannock, on brief), for defendants in error.

Before EGGLESTON, C. J., and SPRATLEY, BUCHANAN, SNEAD, I'ANSON, CARRICO and GORDON, JJ.

SPRATLEY, Justice.

On April 30, 1962, Paul Tompkins, sometimes hereinafter referred to as plaintiff, procured from Greensboro National Life Insurance Company (Greensboro) a certificate of credit life insurance upon the life of plaintiff's wife, Nettie Tompkins. Southside Bank, Tappahannock, Virginia, (Bank), a creditor of the plaintiff and his wife, was named as beneficiary for the amount of the balance due Bank from plaintiff and his wife, upon the death of Nettie Tompkins. The policy was one of a number issued under a Master Group Policy or Franchise Credit Life Policy from Greensboro to the Daingerfield Agency, Tappahannock, Virginia.

After the death of Mrs. Tompkins, this action was instituted against Greensboro by Tompkins to recover on behalf of himself and Bank the balance of the indebtedness due Bank from plaintiff and his wife. Greensboro denied liability on the ground that the policy of insurance was procured by fraud. A verdict was returned by the jury in favor of the plaintiff in the sum of $5,400.18, with interest from September 14, 1962, the date of Mrs. Tompkins death, and judgment was entered accordingly by the trial court. The amount is not in dispute.

We are asked by Greensboro to reverse the judgment on the grounds that the evidence discloses that plaintiff perpetrated a fraud upon it, and for errors of the trial court in granting and refusing certain instructions.

The facts are not in dispute, except as to the question whether plaintiff held out to Greensboro another woman, in apparent good health, as his wife at the time the certificate of insurance was issued. That question was fairly and clearly submitted to the jury in instructions, and the jury, by its verdict, answered in the negative.

Paul Tompkins, 69 years of age, and Nettie, his wife, 61, a Negro couple, had been married more than 43 years. In 1958, they borrowed $6,600.00 from the Southside Bank, repayment to be made, with interest, in 180 monthly installments. The loan was evidenced by a note executed by each of them and secured by a deed of trust on their real estate. Mr. and Mrs. Tompkins had discussed between themselves many times the obtaining of credit insurance to cover their indebtedness to the Bank; but plaintiff said they had postponed such action because of the lack of funds. They had also, at some time or times, consulted an officer of the Bank about the same matter.

Mrs. Tompkins was a practical nurse and actively engaged in her profession until about March 22, 1962. Prior to the latter date, she was, according to her husband, apparently in good health until she suddenly began to have some trouble with her teeth. She visited a dentist, who extracted several. Due to excessive bleeding from the extractions, she was advised that she should go to a hospital for blood transfusions. She entered a hospital on March 23, 1962, and remained there until April 11, being treated for loss of blood and pneumonia. Upon discharge from the hospital on April 11, she returned home, and thereafter visited the hospital at weekly intervals for treatment.

The entry registry at the hospital showed that she was admitted for 'diagnostic studies,' and under date of April 27, showed that she had 'acute leukemia.' The record does not indicate that Tompkins was informed of the diagnosis, and he testified that he had no knowledge that his wife suffered from leukemia until the latter part of June, 1962.

On April 30, 1962, Tompkins consulted John R. Ferry, Executive Vice-President of Bank, about procuring credit life insurance to cover the debt of himself and wife to Bank. Ferry advised him that he could probably get a better premium rate directly through an insurance agency rather than through the Bank, and suggested that Tompkins go to such an agency and check the rate. Ferry did not recall that Tompkins was accompanied by anyone at the time of their consultation. On the same day, Tompkins went to Daingerfield Agency and conferred with Harry T. Gladding, Jr., one of the owners of that insurance agency; applied for credit insurance on the life of his wife; and there was issued the certificate of insurance here involved.

No written application for credit life insurance was required by the rules of Greensboro, and none was required to be furnished by Tompkins. Nor was there required any medical examination or information as to the health of the person to be insured.

Upon making application for the insurance, the only information requested by Gladding of Tompkins was the age of his wife, her full name, and her Post Office address. This information was truthfully and correctly furnished by plaintiff, and inserted in the certificate of insurance. Information of the amount of the debt to Bank was furnished by Bank.

Tompkins positively and repeatedly testified that he was not accompanied by anyone when he went to the office of Daingerfield and made application for the policy. Gladding asked him no questions about the health of his wife. Plaintiff said he did not regard his wife's illness as being serious; that he thought she was in good health, except for trouble with her teeth; that he was not told by anyone, and did not realize prior to April 30, 1962, the date of the application for the insurance, that the illness of his wife was serious; that he attached no great importance to blood transfusions and the extraction of teeth, because he had personally gone through both experiences; and that he did not know his wife had leukemia until 'sometime around the last of June.'

Tompkins further said that, after his wife had her teeth extracted, he observed no great change in her appearance; that upon her return from weekly visits to the hospital, she attended to her nursing duties and performed her usual functions around the home; and that she went out to do her shopping on Fridays as before.

The premium on the policy was $55.41 for the first year, of which $25.00 was paid in cash, and the balance subsequently paid by Tompkins or his wife. The premium on the policy, if renewed, decreased for subsequent years as the installment loan indebtedness decreased.

Greensboro presented four witnesses, Gladding and three employees of Daingerfield, who really agreed on only one matter, viz., that Tompkins was accompanied by a woman, in apparent good health, when he applied for the insurance. They said that plaintiff and his alleged woman companion discussed, between themselves, the question upon whose life the policy should be issued; that neither Tompkins nor his companion made any statement, deciaration, or representation as to the identity of the woman. None of the witnesses knew Mrs. Tompkins.

The issuance of the policy was a normal transaction in a busy office writing insurance with annual premiums of $150,000.00. The above four witnesses admitted that, after the death of Mrs. Tompkins, they 'discussed and tried to reconstruct what happened,' when...