John L. Spaulding, Admr., Et Al v. the Mutual Life Insurance Company of New York

• Decision Date: 07 January 1920
• Citation: 109 A. 22,94 Vt. 42
• Parties: JOHN L. SPAULDING, ADMR., ET AL v. THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK
• Court: Vermont Supreme Court

109 A. 22

94 Vt. 42

JOHN L. SPAULDING, ADMR., ET AL v. THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK

Supreme Court of Vermont

January 7, 1920

May Term, 1919.

ACTION OF CONTRACT on a life insurance policy. Answer: A denial of some of the facts alleged in the declaration; a special statement in defence that the contract never took effect as a binding contract of insurance by reason of certain unfulfilled conditions precedent therein contained; and further special statements in defence of fraudulent representations, breach of warranty, and concealment by the insured of and respecting facts material to the risk in his application for insurance. Trial by jury at the March Term 1916, Washington County, Butler, J., presiding. Verdict and judgment for the plaintiffs. The defendant excepted. The opinion states the case.

Motion overruled.

Theriault & Hunt for the defendant.

John W. Gordon (J. W. Rowell on Motion for Reargument) for the plaintiffs.

Present WATSON, C. J., POWERS, TAYLOR, MILES, and SLACK, JJ.

OPINION

TAYLOR

This is an action of assumpsit on a contract of insurance on the life of Orvie M. Jones, deceased. Before trial the declaration was amended by striking out the name of the administrator, and the cause proceeded on behalf of the beneficiaries, who were the widow and the children of the deceased. Trial was by jury, with verdict and judgment for the plaintiffs for the amount due under the terms of the policy. The case is here on exceptions by the defendant.

The application for insurance was made August 14, 1914, the insured was examined by the defendant's medical examiner the next day, and the policy was delivered and the first premium paid August 29, 1914. The policy antedated the application by four days, but the reason for this is here immaterial. The second premium was paid August 10, 1915, and the insured died August 29, 1915. The undisputed evidence was to the effect that he died of cancer of the stomach.

The application for the policy is expressly made a part of the contract between the parties. In the application the insured was asked what illnesses or diseases he had had since childhood. He named indigestion; and, in answer to inquiries as to the number of attacks, their dates, duration, severity and results, he answered one in May, 1914, of a few days' duration, mild in character, resulting in complete recovery. He stated that the attack was due to eating a hearty supper when very tired. He was asked to state every physician or practitioner whom he had consulted or who had prescribed for or treated him in the previous five years, and answered by naming Dr. F. M. McGuire of Montpelier, whom he said he had consulted in May, 1914. He gave the nature of the complaint as indigestion. He affirmed in answer to questions that he had stated in the application all illnesses or diseases that he had had since childhood, and every physician or practitioner consulted during the previous five years. He signed a statement that all his answers and statements in the application were true and were made as an inducement to the company to issue the proposed policy. The policy provides that all statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties. The policy was not to take effect unless and until the first premium was paid and the policy delivered during the continuance of the applicant in good health, except in circumstances not here material.

The claim of the defendant was that the policy was of no effect as a binding contract of insurance, for the reason that when the first premium was paid and the policy delivered the insured was not in good health, and for the further reason that it was rendered void by certain fraudulent representations of the insured made in the application for insurance. It was the theory of the defendant that at the time of the application the insured had an ulcer of the stomach, which later became malignant and cancerous. The defendant tendered and paid into court $ 489.84, being the amount of the premiums paid, aggregating $ 449.85, together with interest thereon and the taxable costs of the plaintiffs then accrued. The case was tried and submitted to the jury upon the theory that the plaintiffs were entitled, in any event, to a verdict for this amount.

At the close of the evidence the defendant moved for a directed verdict. Five grounds of the motion were specified. The first presented the claim that on the undisputed evidence the insured was not in good health at the time the policy was delivered and the first premium thereon was paid. The remaining grounds are directed to the claim, stated generally, that on the undisputed evidence the insured was guilty of fraud in the application, voiding the policy issued thereon. The court overruled the motion, and the defendant was allowed an exception as to each ground.

The point is made that the second ground of the motion, which was that the insured "made false and untrue answers in the statements to the medical examiner respecting matters material to the risk," was too general to afford a basis of error, in that no specific statement is here pointed out. But the other grounds of the motion to the same effect amplify this general ground and are sufficiently specific to raise the questions argued. The issue raised by the defendant's answer and proof was clearly defined, viz., that the insured's statements with reference to illnesses or diseases that he had had since childhood were false and fraudulent. Considering the motion as a whole, especially in the light of the pleadings and evidence, plaintiffs' criticism is without just foundation.

The burden being upon the defendant to make out its claim that the insured was guilty of fraud voiding the policy, the precise question presented by that phase of the motion is whether on all the evidence there was any room for opposing inferences. The defendant's evidence strongly tended to show that the insured had been suffering from gastric ulcer for several years before the policy issued and that the trouble persisted, with periods of quiescence, finally developing into the malignant condition that caused his death. The fair tendency of the medical testimony was all to this effect. Plaintiffs rely upon the fact that the defendant's medical examiner passed the insured as an excellent risk; but it fairly appeared from all the evidence that at the time of his examination the trouble could be detected only through the subjective symptoms--the statements of the insured as to his past and present condition. For this reason the most that the plaintiffs can claim for the examination and the medical examiner's testimony is that the insured then appeared to be in good health. Certain lay witnesses gave evidence to the same effect. Conceding, though not deciding, that the evidence of appearance of good health was sufficient to make the fact of good health at the time the policy was delivered a question for the jury, it by no means disposes of the defendant's claim as to fraudulent representations.

The evidence was uncontradicted that the insured had been suffering from repeated attacks of a stomach trouble of sufficient severity to require medical advice and treatment for a period of five to seven years. He had consulted and been treated for the trouble by several physicians other than Dr. McGuire during the five years preceding the application for the policy. The recurrence of the difficulty had come to be spoken of by him as "one of those attacks of indigestion." In February, 1913, he consulted a Dr Gannett in Boston and probably then, if not before, learned the real nature of the trouble. He consulted Dr. McGuire some time in the spring of 1914, and was under his treatment during the following summer. He gave Dr. McGuire a history of his case, from which the doctor diagnosed the trouble as gastric ulcer and prescribed a course of treatment therefor. He told Dr. McGuire that he had been under treatment for distress in the region of the stomach for some time. The treatment prescribed consisted of regulating the diet, giving food that would be less irritating to a sore surface, and medicine to diminish the over acid condition of the stomach usually present with a gastric ulcer. When asked if he told Mr. Jones what his diagnosis was, Dr. McGuire replied, "I think I did." There can be no doubt that insured was thus informed. Not only is it highly probable this was so, in view of the nature of the trouble and the necessity for intelligent cooperation of the patient to render the treatment effective, but Mrs. Jones testified that the insured told her that Dr. McGuire said it might be an ulcer. Any possible doubt is removed by the testimony of at least three reputable physicians whom the insured subsequently consulted, to the effect that insured told them, as part of the history of his case, that he had been treated for gastric ulcer. Dr. Campbell testified that he said in November, 1914, that he had been treated for gastric ulcer--had been under the care of a number of doctors at different times within the previous year or two--naming among others Dr. McGuire, Dr. Maynard, and Dr. Gannett. Dr. Mayo testified that on an occasion during the session of the Legislature of 1915 insured told him that he had previously been treated for ulcer of the stomach--said he had suffered from stomach trouble for a long time. Dr. Grimes testified that he was called to attend the insured in March, 1915, and was told by him that he had previously had a gastric ulcer. In answer to the question: "How long previous?" witness replied, "As I remember four or five years--or six years, as I remember it." There was no attempt to contradict this evidence, and the credibility...