Guardian Life Ins. Co. of America v. Clum

• Decision Date: 14 September 1939
• Docket Number: No. 6892.,6892.
• Parties: GUARDIAN LIFE INS. CO. OF AMERICA v. CLUM.
• Court: U.S. Court of Appeals — Third Circuit

106 F.2d 592 (1939)

GUARDIAN LIFE INS. CO. OF AMERICA v. CLUM.

No. 6892.

Circuit Court of Appeals, Third Circuit.

September 14, 1939.

Edward W. Warren and C. P. O'Malley, of O'Malley, Hill, Harris & Harris, both of Scranton, Pa. (D. Curtis Robertson, of New York City, of counsel), for appellant.

Harold R. Wruble and M. H. Salsburg, both of Wilkes-Barre, Pa., and Abram Salsburg, of Wilkes-Barre, Pa., for appellee.

Before BIGGS, MARIS, and CLARK, Circuit Judges.

CLARK, Circuit Judge.

Plaintiff-appellee leans heavily, and, under Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, properly, on two doctrines of the Pennsylvania courts. The first is "good faith" as the touchstone for answers in applications for life insurance. All the cases cited in either brief are collected in 20 Vale Pennsylvania Digest, sub nomine Insurance, p. 429. The second is the narrow scope of the court's power to enter judgments non obstante veredicto, 22 Vale Pennsylvania Digest, sub nomine Judgment, p. 325. The emphasis of the Pennsylvania courts upon the mind behind the misrepresentation is not in accord with the holdings in a majority of jurisdictions, 39 Yale Law Journal 283 (note) (an odd distinction between equity and law prevails in New Jersey, New York Life Ins. Co. v. Marotta, 3 Cir., 57 F.2d 1038; Weintrob v. New York Life Ins. Co., 3 Cir., 85 F.2d 158). It has been criticized in the local law journals, 11 Temple Law Quarterly 267 (note), and by the local authors, Magaw, Representations in the Law of Life Insurance, 11 Temple Law Quarterly 463. However that may be, we do not think it a reed stout enough to support the ruling of the lower court in the case at bar.

Counsel for plaintiff-appellee commences his "statement of the case" with an unwarranted (the more so because irrelevant) attack on the character of an innocent woman. He states that the insured divorced his wife "for cause" and attempts the implication that we should believe the worst. Whereas the fact quite clearly appears that the "cause" arises from some marital incompatability settled by the not unusual procedure of a divorce unopposed and sugared by a financial settlement.

The only purpose of this unchivalrous performance seems to be the introduction of the beneficiary to the jury and to us in a favorable light. The latter, a widow (sod not grass) entered the deceased insured's employ as a bookkeeper shortly after he moved from Dingmans Ferry, Pa., to Milford, Pa., in pursuance of a plan to expand his meat business. She soon became more than a mere wage slave. We find the deceased going to live at her house and entrusting her with his ambitions both for his business and for insurance. Their friendship eventually ripened into an engagement for marriage. As a first preliminary, of course, a divorce was necessary, was initiated, and was secured in final form on February 8, 1935. As a second preliminary, the deceased desired the financial security of his fiancee. In fact, this desire seems to have been first in time. He applied for insurance in 1931 but was refused as not in a position to marry the beneficiary. The second application (to a different and defendant-appellant company) was contemporaneous with that happy change of status.

This praiseworthy wish to provide for the object of his affections may have been chronologically stimulated by some specific sense of the impermanence of this "mortal coil". We say specific because the deceased complained of pain under his breast-bone (sternum). The pain seems to have been sufficiently disturbing to impel medical consultations. These took place in the late summer and fall of 1934 and the locus in quo was New York City (3½ hours from Milford by train). We are not advised of the roster of professional skill in insured's hometown of Milford. There was at least one doctor there. The latter brought about this litigation by passing the deceased for insurance. At any rate, the deceased preferred the talent of the metropolis although he ended up with a physician, Dr. Plummer, a heart specialist, in practice a few years only. This doctor was visited, at his office, once a day on August 15th, September 12th, 18th and October 22nd, and, at the hospital, twice a day from October 1st to 5th. During these visits and during this hospitalization thorough physical examinations, accompanied by all the standard tests, were made. In addition, Dr. Plummer sent the insured to another doctor (Berea) for a cardiographing.

The trial status of the resulting cardiogram is confusing and we may say rather typical of the American way of presenting cases. The doctor (Berea) who made it is not called. Therefore, although no one disputes its authenticity, it is not technically proven. The learned trial judge first excluded it (R. 126) and then, apparently, changed his mind and admitted it (R. 134). We say apparently because his ruling leaves us in doubt as to whether he intended the admission for all purposes or only for its disclosure to, and therefore the knowledge of, the deceased. The same doubt appears to have influenced defendant-appellant's counsel for his brief does not rely on it. This is the more curious as the cardiogram has significance because of its contents ("evidence suggests rather marked myocardial damage" R. 219), because of its form (documentary) and because of its very existence (another false representation, question 8g of the application).

We began this opinion by reference to the two doctrines peculiar to Pennsylvania law, upon which plaintiff-appellee relies. We do not think that either of them justifies that reliance. The learned commentators on the good faith rule point out the grave abuses to which it is open. We might hazard a guess that it was originally promulgated by courts impatient at the technical tactics of insurance companies and their learned and adroit counsel. Assuming all that, the rule does not go to the length here contended for. The deceased answered two questions in his application and answered them both falsely. They are:

"9. Name all physicians and practitioners you have consulted * * * * within the last five years, * * *. None.

"10. Have you ever been a patient in any hospital, * * *? No." R. 17.

As to the first, the plaintiff-beneficiary finds him pure in heart although false in fact, because she denies the disinterested doctor's testimony that the insured was...