Indiana Nat. Life Ins. Co. v. McGinnis

• Decision Date: 31 October 1912
• Docket Number: No. 7,724.,7,724.
• Citation: 99 N.E. 751
• Parties: INDIANA NAT. LIFE INS. CO. v. McGINNIS.
• Court: Indiana Appellate Court

99 N.E. 751

INDIANA NAT. LIFE INS. CO.

v.McGINNIS.

No. 7,724.¹

Appellate Court of Indiana, Division No. 1.

Oct. 31, 1912.

Appeal from Superior Court, Marion County; Vinson Carter, Judge.

Action by Melissa McGinnis against the Indiana National Life Insurance Company. From a judgment for plaintiff, defendant appeals. Reversed, and directions to overrule demurrers to answer and for further proceedings.

Ulric Z. Wiley and Arthur H. Jones, both of Indianapolis, for appellant. Harvey Harmon, of Princeton, Oscar L. Pond, of Indianapolis, and Lucius C. Embree, of Princeton, for appellee.

FELT, J.

This action was brought by appellee against appellant to recover upon a life insurance policy issued by the Indiana National Life Insurance Company upon the life of John R. McGinnis, in which policy appellee was named as one of the beneficiaries. Issues were formed, a trial had, and judgment rendered for appellee in the sum of $3,129, from which appellant appealed to this court.

The errors assigned are the sustaining of appellee's demurrer to appellant's answers as follows: (1) The first paragraph; (2) the third paragraph; (3) the fourth paragraph; (4) the sixth paragraph; and (5) in overruling appellant's demurrer to the amended second paragraph of appellee's reply to appellant's fifth paragraph of answer.

The averments of the complaint material to the determination of the questions presented by the assignment of errors are, in substance, as follows: That on December 9, 1907, appellant issued to John R. McGinnis a policy of life insurance for $5,000, which, in the event of his death, was made payable in the sum of $3,000 to appellee and the remainder to Emily McGinnis; that John R. McGinnis died on the 16th day of January, 1909. Full performance on the part of appellee and the deceased is averred, and it is then charged that on the 19th day of January, 1909, appellee notified appellant of the death of the insured and requested blanks upon which to make proof of death; that on the 20th day of January, 1909, appellant advised her that it would not furnish such blanks, and that it would not pay any part of said insurance; that, upon the death of said insured, the aforesaid policy was in full force and effect, and there was due appellee thereon the sum of $3,000. A copy of the policy was by exhibit made a part of the complaint.

Appellant's first paragraph of answer admits the issuance of the policy, the payment of the first year's premium; that the insured died as alleged; that it received notice of his death, and a request for blank proofs of death; that it refused to furnish said proofs, and denied all liability upon the policy, and refused to pay any amount thereon. It was also alleged that, by mutual agreement between the insured and appellant, the policy had been canceled prior to his death; that the same had been issued upon the written application of the insured, a copy of which was made a part of the contract of insurance, and was filed with and made a part of this paragraph of answer, including the medical examination of the insured. The answer further avers, in substance: That the insured stated that he was in good health. That he had never had any of certain enumerated diseases, among them, coughing, spitting or coughing blood, or any chest or lung or throat disease. That he did not use intoxicating liquors at all, and had not done so in the past. That his only use of tobacco was in moderate smoking. That his answers were correctly recorded by the medical examiner. That his application contained the following: “On behalf of myself and of any person who shall have or claim any interest in any policy that may be issued under this application, I hereby declare and agree that all the foregoing statements and answers, together with those contained in the declarations to the Indiana National Life Insurance Company's medical examiner, are warranted to be full, complete, and true, and they are offered to the company as a consideration for, and as a basis of, the contract with said company, under any policy issued under this application, which, if issued, I hereby agree to accept *** (2) That *** no liability on the part of said company shall arise until a policy shall be issued, and delivered to me, nor until the first premium thereon shall be actually paid, while I am in good health.” That the answers to the foregoing questions were false and fraudulent, in this: that at the time designated the insured was not in good health. That he knew he was not and he was then diseased with consumption. That he was addicted to the excessive use of intoxicating liquors and frequently became intoxicated. That at the time of his application and long prior thereto he had used tobacco excessively and his health was injured thereby.

It is also averred that said John R. McGinnis warranted all of said answers to be true when he knew they were false and fraudulent, that appellant believed said answers were true, and that the insured was in good health. It is then averred that on or about the 1st day of November, 1908, about 10 months after the execution of said policy, appellant learned that the said Jno. R. McGinnis at the time of making his application for said policy, and at the time said policy was issued to him, was diseased with consumption; that he was rapidly declining in health, and that he had gone to a sanatorium in Colorado for the benefit of his health, and for the purpose of arresting said disease; that the said John R. McGinnis knew at the time he made said application, and received said policy, that he was so diseased; and that he made such false and fraudulent representations to induce the defendant to issue said policy. It is further averred that on or about the 1st day of November, 1908, appellant learned that at the time of making said application and the issuing of said policy the said John R. McGinnis was and had been for a long time prior thereto addicted to the excessive use of intoxicating liquors to such an extent that he frequently became intoxicated; that at said time said John R. McGinnis was and had been for a long time prior thereto addicted to the excessive use of tobacco to such an extent that it was detrimental to his health. It is further averred that soon after it ascertained said facts, and as soon as it had learned where the said John R. McGinnis was located, it entered into an agreement with him to refund him the amount of the original premium which he had paid, together with the first year's interest thereon amounting in all to $140.45, in consideration of his releasing the appellant from any further obligation upon said policy, procured by said false and fraudulent representations aforesaid; that on the 30th day of November, 1908, it paid to him the said sum of $140.45, which he accepted in full satisfaction of any obligation of appellant upon said policy, and released it from any liability thereon; that said release was in writing duly signed and sworn to by said John R. McGinnis.

The third paragraph of answers contains the admissions shown in the first paragraph, and sets out the same questions and answers and the same part of the application certifying that his answers are correctly recorded and true. It also sets out portions of the application, stating among other things: “And hereby warrant all the statements and answers herein made, and also the written statements made by me to the agent.” This paragraph by proper averments shows the signing of the application, that the same was made a part of the policy, the warranty, fraud, reliance thereon by appellant, and concludes by charging that, by reason of the fraud so perpetrated upon appellant by said McGinnis, said policy was and always had been void.

The fourth paragraph pleads the facts alleged in the first paragraph with reference to the warranty and the alleged false and fraudulent answers of the insured, the refunding to him of the first year's premium, and in consideration thereof the execution by him to appellant of a full release and satisfaction of all liability of appellant on said policy as follows: “This is to certify that I have this day received from the Indiana National Life Insurance Company, of Indianapolis, Indiana, the sum of one hundred forty and 45/100 dollars ($140.45), which is the amount of my first annual premium, together with 6 per cent. (6 per cent.) interest thereon, on policy No. 2931, issued to me by said company December 9th, 1907. I hereby accept the above amount in full satisfaction of said policy, and release said company from further obligation upon aforesaid policy. In witness whereof I hereunto set my hand, this 30th day of November, 1908, at Y. M. C. A. Farm, Edgewater, Colo. John R. McGinnis.”

The fifth paragraph of answer counts upon the nonpayment of the second annual premium on said policy. The sixth paragraph makes the same admissions as the first and contains the same averments as to the application, medical examination, warranties, and the answers of the insured. This paragraph counts upon alleged fraud based upon the answers to certain questions, and avers that said John R. McGinnis was in September, 1907, and thereafter afflicted with gonorrhea, and falsely and knowingly answered that he was not so afflicted to induce appellant to issue to him said policy. The amended second paragraph of reply to the fifth paragraph of answer avers, in substance, that “prior to the maturity of the premium of $132.50, which became due December 9, 1908, appellant transmitted to the insured by United States mail, at Princeton, Ind., a notice that said premium would be due and payable on that date, which notice contained the words, ‘Make all checks payable to the company;”’ that, when said notice reached the said city of Princeton, the said John R. McGinnis was not in said city, but was outside of the state of Indiana; that said notice was received by one Harvey Harmon, who was the duly authorized...