John Hancock Mut. Life Ins. Co v. Yates

• Decision Date: 08 February 1935
• Docket Number: No. 24220.,24220.
• Parties: JOHN HANCOCK MUT. LIFE INS. CO. v. YATES.
• Court: Georgia Court of Appeals

50 Ga.App. 713

179 S.E. 239

JOHN HANCOCK MUT. LIFE INS. CO.

v.YATES.

No. 24220.

Court of Appeals of Georgia,

Division No. 2.

Feb. 8, 1935.

Rehearing Denied Feb. 27, 1935.

Syllabus by Editorial Staff.

Error from City Court of Carrollton; J. J. Reese, Judge.

Action by E. K. Tates against the John Hancock Mutual Life Insurance Company. Judgment for plaintiff. Defendant's motion for new trial was denied, and he brings error.

Affirmed.

Smith, Smith, & Bloodworth, of Atlanta, and Boykin & Boykin, of Carrollton, for plaintiff in error.

Smith & Millican, of Carrollton, for defendant in error.

Syllabus Opinion by the Court.

SUTTON, Judge.

1. While it is true that it is the general rule that contracts are to be governed as to their form, validity, and effect by the laws of the place where they are made, that is, by the lex loci contractus (Civil Code, | 8); it is also true that the mode of procedure, the character and extent of the remedies on the contract sought to be enforced, the rules of evidence and so on are governed by the lex fori, that is, the law of the state in which the action is instituted. Chamblee v. J. B. Colt Co., 31 Ga. App. 34, 119 S. E. 438; Davis v. Melton, 46 Ga. App. 639, 168 S. E. 320; Beck & Gregg Hardware Co. v. Southern Surety Co., 44 Ga. App. 518, 162 S. E. 405.

(a) "The materiality of representations made by the insured in his application, under the laws of Georgia, is a question for the jury to decide. The manner in which this question shall be determined, being a matter affecting the remedy only, and not the 'validity, form, or effect of the contract, ' is to be controlled by the lex fori, and not by the lex loci contractus." Massachusetts Benefit Life Ass'n v. Robinson, 104 Ga. 256 (8), 30 S. E. 918, 919, 42 L. R, A. 261.

(b) The law of New York is that when a life insurance policy is delivered to the insured, he must read it (or have the same read to him), and the application forming a part thereof, and if the application does not contain correct answers to the questions asked by the agent of the insurer, the insured is under a duty to so inform the insurer and have the same corrected, and when he fails to do this a recovery will not be permitted, in an action on the policy by the beneficiary against the insurer, even though the insurer's agent was informed of the facts and incorrectly recorded the answers of the applicant. Minsker v. John Hancock Mutual Life Ins. Co., 254 N. Y. 333, 173 N. E. 4, 81 A. L. R. 829; Travelers' Ins. Co. v. Pomerantz, 246 N. Y. 63, 158 N. E. 21. In this case it is undisputed that the insured visited a physician four times during April, 1932, prior to his death in June of that year, when he was suffering from indigestion, and that the application shows that the question as to whether he had received medical advice during the past five years was answered in the negative. Under the New York law, as pronounced in the above decisions, a recovery could not be had by the beneficiary on this policy. However, under thelaw of this state, a different rule prevails. Our decisions hold that while an insurance policy will be avoided where the applicant therefor has made false answers as to matters material to the risk in the application for the insurance, such as to previous illness, soundness of health at that time, etc. (Southern Surety Co. v. Fortson, 44 Ga. App. 329, 161 S. E. 679); yet where the agent of the insurance company incorrectly records the answers of the applicant to questions propounded in the application as to matters material to the risk, after being informed by the applicant as to the facts, the agent's actual knowledge thereof will be imputed to the insurer and it will be held to be estopped from asserting the invalidity of the policy because of such incorrect statements as to material matters. National Casualty Co. v. Borochoff, 45 Ga. App. 745 (1), 747, and citations, 165 S. E. 905, 907; Southern Surety Co. v. Fortson, 46 Ga. App. 265 (1, 2), 167 S. E. 335.

2. A statement in an application for an insurance policy, that the applicant is in good or sound health at that time, is not to be construed to be a warranty upon the part of the applicant that his health is absolutely perfect. Massachusetts Benefit Life Ass'n v. Robinson, supra, 104 Ga. 256 (10), 30 S. E. 91S, 42 L. R. A. 261. Under the facts of this case, the policy sued on was not void as a matter of law because the applicant stated that he was in good health, when he had informed the insurer's agent that he had had indigestion and when the physician who treated the applicant did not inform him that he was afflicted with a dangerous or deadly malady, the physician not being able to determine this from the applicant's condition, and it not appearing that the indigestion suffered by the applicant seriously impaired his physical state or system in any way, but it appearing, however, that the applicant worked every day and seemed always to be in good spirits and health up to the time he went to the hospital for an examination of his condition in June, 1932. It is essential that the insured should have knowledge that he was in bad health or that there were circumstances which should have led him to that conclusion, in order for a policy of insurance to be avoided by the insurer, in this state, on account of the representation by the insured that he was in sound health at the time the policy was applied for and issued, when in fact he was suffering from a malignant malady in an incipient form, from which he died shortly after the policy was issued. The term "sound or good health, " as used in a policy of life insurance, means that the ap plicant or insured has no grave impairment or serious disease, and is free from any ailment that seriously affects the general soundness and healthfulness of his system. Atlantic & Birmingham R. Co. v. Douglas, 119 Ga. 658, 46 S. E. 867; National Life & Acc. Ins. Co. v. Carter, 46 Ga. App. 1, 166 S. E. 247; National Life & Acc. Ins. Co. v. Lee, 46 Ga. App. 4, 166 S. E. 253. Under the facts of this case, the physician who treated the insured for indigestion having stated that he could not determine that the insured had a deadly malady, and the insured having informed the agent that he had had indigestion troubles, the opportunity of the insurer was equal with that of the insured to find out that the insured, at the time of the application for this insurance, was in reality suffering from a deadly disease, from which he died shortly after the policy was issued. This policy should not be declared void, as a matter of law, because the insured had indigestion troubles in March, April, and May of 1932, and died from a cancer of the intestines in June, 1932, the policy of insurance being applied for and issued in the month of May, but the question was properly one for submission to a jury under proper instructions from the court, and this was done in the case under consideration.

(a) "This being a suit to recover by the beneficiary under a life insurance policy, which was defended upon the ground that the insured at the time of the issuance of the policy was not in sound health, and that she, in her application for insurance, made false and fraudulent representations as to her physical condition, thereby fraudulently inducing the insurer to issue the policy, and it appearing from the evidence that the jury was authorized to find that the insured was in sound health [as that term is used in a policy of life or health and accident insurance] at the time of the issuance of the policy and did not make the false and fraudulent statements as alleged, " the jury properly determined this issue against the insurance company, and such finding was not contrary to the law or the evidence. National Life & Acc. Ins. Co. v. Smith, 34 Ga. App. 242 (2), 129 S. E. 113, 114.

3. In a suit upon a life insurance policy where the defense is based upon the ground that the insured, in his application, which was a part of the...