Kearns v. North American Life & Casualty Co.
| Citation | 185 N.W. 659,150 Minn. 486 |
| Decision Date | 16 December 1921 |
| Docket Number | 22,527 |
| Parties | KATE KEARNS v. NORTH AMERICAN LIFE & CASUALTY COMPANY |
| Court | Minnesota Supreme Court |
Action in the district court for Ramsey county to recover $180 upon defendant's health policy. The case was tried before Olin B. Lewis, J., who when plaintiff rested denied defendant's motion to dismiss the action, and at the close of the testimony its motion for a directed verdict and a jury which returned a verdict for $193.05. From an order denying its motion for judgment notwithstanding the verdict or for a new trial, defendant appealed. Affirmed.
Insurance -- waiver of notice of illness.
1. An insurer may waive a statutory provision, incorporated in its policy, for written notice of sickness of the insured to entitle her to claim benefits under the policy. By refusing to pay the claim, on the ground that the policy had lapsed for nonpayment of the premium, such notice is waived.
Letters of president admissible.
2. The letters of the president of the insurer, refusing to recognize the claim on the ground stated, were properly received in evidence under the circumstances stated in the opinion, although a waiver had not been pleaded.
Effect of waiver of statutory notice.
3. A waiver of the notice prescribed by section 3524, G.S. 1913 (C): 4 and 5, conferred upon the insured the rights she would have had if such notice had been given.
False answer in application -- knowledge of agent.
4. Knowledge on the part of the representative of the insurer of the falsity of an answer to a question in the application for the policy, which he reduced to writing, is imputed to the insurer, and it will not be allowed to avoid its contract because of the misstatement in the application.
Construction of policy.
5. The right to benefits was not limited by a provision in the policy relating to complications of the original sickness with other specified diseases.
Leroy Bowen, for appellant.
Herbert P. Keller and Bruce J. Broady, for respondent.
Appeal from an order denying defendant's motion for judgment or a new trial. Plaintiff sued on a policy insuring her against the results of accidental injuries and sickness from disease providing for the payment of $30 a month for temporary total disability resulting from sickness, and calling for the payment of an annual premium of $12 in monthly installments payable in advance, either at defendant's home office or to an authorized collector.
As defenses the answer alleged that plaintiff failed to pay the premium due May 25, 1919, and the policy thereupon lapsed; that defendant never received notice of plaintiff's sickness and was never requested to furnish forms for proof of loss and never refused to do so; that no proofs of loss had been made and no written notice of plaintiff's alleged sickness given within 10 days as required by the policy, and that plaintiff was insured as an hotel keeper and thereafter changed her occupation to that of a boarding-house keeper, which was more hazardous and not insurable.
The evidence in plaintiff's behalf was substantially to this effect: In the spring of 1919 she was sick for a short time and verbally notified Edwin Hempel, the defendant's collector, of her sickness. Without further notice and without proofs of loss, defendant paid the amount to which she was entitled. Afterwards and in June, 1919, she cut her finger. An infection followed and an abscess formed in her arm-pit, and later rheumatism or neuritis developed. On June 16 she became so ill she was totally disabled. On June 25 Hempel called to collect certain premiums and had an interview with plaintiff's daughter, who told him of her mother's sickness and asked him whether it would be necessary to give notice to the company. He replied it was not necessary, that he would look after the matter as he had done before, but refused to accept the June premium on plaintiff's policy. Subsequently the premium was paid to defendant's collector at St. Paul, who gave a receipt for it. Defendant promptly returned the premium. Correspondence between plaintiff's attorney and the defendant followed, beginning August 30, 1919, when demand was made for payment of plaintiff's claim. Defendant wrote in reply that the premium due May 25 was not paid, and consequently the policy lapsed on that day; that, if it should appear that the premium was paid, defendant's officers would be in a position to discuss the claim on its merits. Defendant adhered to its position in subsequent letters, and finally suit was brought.
1. The evidence with reference to the payment of the premium was such that the jury was justified in finding it had been made. Defendant does not seriously dispute this, and we pass this phase of the case without further comment.
2. It must be conceded that the requirement of written notice of sickness might be waived. It is well settled that, where the insurer denies liability on grounds other than a failure to furnish notice or proofs within the proper time, there is a waiver of such failure. Zeitler v. National Casualty Co. 124 Minn. 478, 145 N.W. 395; Johnson v. Bankers M.C. Ins. Co. 129 Minn. 18, 151 N.W. 413; L.R.A. 1915D, 1199, Ann. Cas. 1916A, 154; 14 R.C.L. p. 1349; 1 C.J. p. 480. The evidence would warrant the jury in finding that on June 25, within the 10-day period, Hempel received notice of plaintiff's sickness, similar to that given in the spring, when defendant paid her claim without questioning the sufficiency of the notice. Under such circumstances plaintiff might be justified in assuming that verbal notice to Hempel was all the defendant required. If she was led to believe that strict compliance with the terms of the policy would not be required, defendant might be estopped from contesting liability because of her failure to give written notice. However that may be, it is clear that, when defendant refused to pay the claim on the ground that the policy had lapsed, it waived plaintiff's failure to give written notice of her sickness.
The legislature has prescribed standard provisions for health and accident insurance...
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