Harte v. United Benefit Life Ins. Co.

• Decision Date: 25 May 1966
• Citation: 51 Cal.Rptr. 518
• Parties: Marcella HARTE, Plaintiff and Appellant, v. UNITED BENEFIT LIFE INSURANCE CO., a corporation, Defendant and Respondent. Civ. 22431.
• Court: California Court of Appeals Court of Appeals

Page 518

51 Cal.Rptr. 518

Marcella HARTE, Plaintiff and Appellant, v. UNITED BENEFIT LIFE INSURANCE CO., a corporation, Defendant and Respondent.

Civ. 22431.

District Court of Appeal, First District, Division 3, California.

May 25, 1966.

Rehearing Denied June 24, 1966.

For Opinion on Hearing, see 56 Cal.Rptr. 889, P2d 329.

Nino & Filice, by William G. Filice, San Jose, for appellant.

Harold C. Nachtrieb, Allan, Miller, Groezinger, Keesling & Martin, San Francisco, for respondent.

DRAPER, Presiding Justice.

Plaintiff was the named beneficiary of a policy of insurance upon the life of her husband. Following his death, she brought this action on the policy. Her case was presented to a jury, and she rested. Defendant's motion for nonsuit was granted, judgment was entered, and plaintiff appeals.

In his application for the insurance, the husband agreed that the insurer should not be liable 'until a policy shall be issued, and delivered to and accepted by [him] while in good health and free from injury.' Decedent had undergone a general physical examination in March, 1961. In April, he had some stomach upsets and had another examination, which revealed that he had developed gastritis and colitis, which his physician attributed to overwork and tension. Otherwise, he was in good health, although overweight. On October 6, he applied for the policy here in issue. The insurer's doctor examined him October 9. There is no suggestion that he withheld from the examiner any information as to his then condition. Thereafter, he began to complain of a pain in his side, and had vomiting spells. On October 28 or 29, x-rays revealed a bowel obstruction and a biopsy indicated it to be benign. Abdominal surgery was performed November 3, and the next day the doctor told plaintiff that her husband had an inoperable cancer of a particularly fast-spreading type, and that he had but six months to live.

On November 11, the insurance agent delivered the policy, dated November 1, to plaintiff. The agent asked if Mr. Harte were at home, and plaintiff answered that he was not. 'I purposely avoided telling him' that Mr. Harte was in the hospital. The agent told Mrs. Harte that a small increase in premium would be charged because of Mr. Harte's age and overweight condition. She wanted to pay it because her husband 'might never get another chance to have a policy.' On the same day, at the hospital, Mrs. Harte asked her husband whether to pay the increased premium. 'He said he was too sick * * *, he would leave it to me.' She paid the added premium that evening. There is evidence that decedent was not told, until after November 11, that he had an inoperable cancer. The cancer caused his death April 23, 1962.

An applicant for life insurance may, of course, be required to undergo a medical examination to determine whether a policy shall issue. In such case, the insurer's liability does not attach on completion of the examination, but only when the policy is issued. If, as here, the applicant agrees that liability shall inhere only upon delivery of the policy to the insured 'while he is in good health,' the clause will be given effect (see cases collected at 60 A.L.R.2d 1429; 136 A.L.R. 1516).

There is a division of authority, however, as to what constitutes 'good health' under such provision. One line of cases conditions liability upon actual good health at the time of delivery. Other jurisdictions hold that apparent good health at time of delivery to an insured acting in good faith precludes avoidance of the policy. California, in a decision discussing both rules, has aligned itself with the 'apparent good health' jurisdictions (Brubaker v. Beneficial, etc., Life Ins. Co., 130 Cal.App.2d 340, 278 P.2d 966; hearing denied). The rule is eminently sound. As pointed out in Brubaker, the contrary rule would permit avoidance of the policy because some disease, 'lurking undetected within' the body of the insured at the date of policy delivery, and apparent neither to him nor to the medical examiner, later caused his death.

But the distinction between appearance and actuality does not aid plaintiff here. When the policy was delivered, the serious condition of the applicant for insurance was apparent to him and to the beneficiary. He was hospitalized following surgery which had revealed a fatal disease. Plaintiff beneficiary purposely...