Jessen v. Aetna Life Ins. Co.

• Decision Date: 18 January 1954
• Docket Number: No. 10923.,10923.
• Citation: 209 F.2d 453
• Parties: JESSEN et al. v. AETNA LIFE INS. CO.
• Court: U.S. Court of Appeals — Seventh Circuit

209 F.2d 453 (1954)

JESSEN et al. v. AETNA LIFE INS. CO.

No. 10923.

United States Court of Appeals, Seventh Circuit.

January 18, 1954.

Carlton L. Fischer, Harry D. Lavery, Chicago, Ill. (Campbell, Clithero & Fischer, Chicago, Ill., of counsel), for appellants.

Vincent O'Brien, Thomas J. Johnson, Jr., James G. Duggan, Chicago, Ill., for appellee.

Before MAJOR, Chief Judge, and DUFFY and LINDLEY, Circuit Judges.

LINDLEY, Circuit Judge.

Plaintiffs brought this suit to recover upon an insurance policy issued by defendant January 5, 1950, upon the life of Waldemar C. Jessen, averring that the insured had died on April 4, 1950. Defendant answered, admitting execution of the policy but asserting special defenses to the effect that the insured, in his application, which was made a part of the policy, had falsely answered questions as to whether he had had any previous diseases or had consulted a physician, asserting that the questions asked and the answers thereto were material to the risk accepted and the hazards assumed; that in fact defendant had consulted physicians and had experienced diseases and ailments of his heart, and that, because of the falsity, defendant was relieved of liability.

At the conclusion of the evidence the trial court directed a verdict for defendant and entered judgment dismissing the suit. On appeal plaintiffs assert that defendant did not make out a valid defense under the statutes of the State of Illinois and that the court erred in directing a verdict for defendant. Subsidiary questions are presented as to whether the court should have permitted plaintiffs to show the insured's reputation for truth and veracity and whether it erred in admitting testimony of certain witnesses to the effect that the policy would not have been issued had truthful answers been given to the questions propounded.

The court grounded its decision on Chapter 73, Section 766, Ill.Rev.Stat., which is Section 154 of the Illinois Insurance Code, and provides that no "misrepresentation or false warranty shall defeat or avoid the policy unless it shall have been made with actual intent to deceive or materially affects either the acceptance of the risk or the hazard assumed by the company." The trial court reasoned that, under this statute, the false answers given by the insured, as a matter of law, materially affected the risk and hazard accepted and assumed by the company and, because of their falsity, relieved the company of liability.

The specific questions and answers were as follows: "Have you ever consulted a physician, specialist, or other practitioner for or suffered from any ailment or disease of * * * (b). Heart, blood vessels or lungs? Answer: No. (f). Any other disease or ailment or any injury not mentioned above? Answer: No. (h). Has anyone found your blood pressure abnormal or unusual? Answer: No. (i). Have you ever had pains or discomfort in the chest or shortness of breath? Answer: No." On the record before us it can not be disputed that the answers were false. Thus it was shown beyond question that in 1942 the insured had consulted his regular physician because he had experienced a series of fainting spells, coupled with pains in his chest; that such attacks had occurred at times when he was seated at his desk and at others when he was on his way home from his place of business in his automobile and that at least three or four of these attacks were major in character. In October, 1942, at the suggestion of his employer, he consulted Dr. Maher, a qualified and experienced practitioner who specializes in heart diseases. After receiving Mr. Jessen's statement as to his fainting attacks and the pain in his chest, the physician examined him thoroughly and reached a tentative diagnosis of coronary sclerosis and angina pectoris, both ailments of the heart, the former, one of the blood vessels and arteries, and the other, a hardening of the coronary arteries, which increases the heart beat and causes pain in the region of the heart and chest. He advised the patient of his diagnosis and wrote a somewhat detailed report to the insured's employer, who in turn, delivered it to Jessen.

In November, 1942, Dr. Maher again examined Jessen, who reported that, in the 30 days elapsing since the first examination, his chest pains had become increasingly frequent and severe, indicating, according to the physician, that he had suffered a closure of one of the minor arteries of the heart. However, upon examination, the doctor found no objective evidence of such closure but felt more certain of the correctness of his former opinion that the patient had coronary sclerosis and angina pectoris, so advised him and prescribed medicine to control the pain arising from the angina and to increase the circulation in the arteries of the heart. Other details as to which the doctor testified, partially included in his letter, led to his opinion that certain other heart and circulatory difficulties existed in the patient, including a slightly increased blood pressure. All the symptoms suggested to Dr. Maher the possibility that Jessen might experience an acute coronary occlusion in the future. As a matter of fact he died on April 4, 1950 of acute coronary occlusion, due to angina pectoris of several months duration.

The evidence recounted is undisputed, so that it is established as a fact that when Jessen stated that he had never consulted a physician or specialist for, or had suffered from, any ailment or disease of the heart, blood vessels or lungs, when he represented that no one had found his blood pressure abnormal or unusual and when he stated that he never had pains or discomfort in his chest or shortness of breath, he was not telling the truth. On such evidence, alone, it was the duty of the court to direct a verdict for defendant if the misrepresentations were within those defined by the statute as sufficient to avoid the policy.

Plaintiffs contend that the misrepresentations of Jessen are not within the statute, for the reason that there is no proof (1) that they were made with actual intent to deceive and (2) that they materially affected either the acceptance of the risk or the hazard assumed by the company. In other words, plaintiffs argue that, under this statute, all the alternative requirements for avoidance of the contract must occur and that a misrepresentation including only one of them is insufficient, whereas defendant earnestly insists that the statutory clauses are disjunctive in character and that a showing of false representations materially affecting the risk or increasing the hazard is sufficient to avoid the policy.

The question of the character of misrepresentation sufficient to avoid an insurance policy has led to confusion in the Illinois decisions. With reference to the cases arising prior to the enactment of the Insurance Code, we may generalize somewhat as follows: (1) When the court determined that a statement in an application for insurance was a warranty, the policy would be declared void, if the statement was false, regardless of scienter; (2) Under the majority rule at law, when a statement in an application was found to be a representation, a policy issued thereon would be avoided if the statement was false, material to the risk and made by the insured with intent to deceive; (3) Under the rule in equity and the minority rule at law, a representation would avoid a policy if false and material to the risk, irrespective of the knowledge of the insured at the time the representation was made and whether or not it was innocently made. See, Havighurst, Some Aspects of the Illinois Insurance Code, 32 Ill.L.R. 391, 402 et seq., and cases there cited.

Although the statute seems to be clear and free from ambiguity, its interpretation by the Illinois courts is confused. Hamberg v. Mutual Life Ins. Co., 322 Ill.App. 138, 54 N.E.2d 227, the only opinion of an appellate court purporting to construe the quoted language resulted in a legal incongruity. There, the insured stated that he had not consulted a physician, that he had never had abnormal blood pressure and that no sugar or other abnormality had ever been found in his urine. These statements were false. For the court, Mr. Justice Niemeyer ...