Lee v. All States Life Ins. Co.
| Decision Date | 26 September 1934 |
| Docket Number | 23207. |
| Citation | 176 S.E. 811,49 Ga.App. 718 |
| Parties | LEE v. ALL STATES LIFE INS. CO. |
| Court | Georgia Court of Appeals |
Syllabus by Editorial Staff.
Where suit on life policy was instituted, and answer setting up fraud was filed, within contestable period, running of one-year limitation imposed by incontestable clause was stopped, so that, where suit was dismissed, upon its renewal insurer was not prevented from pleading fraud because policy was issued over one year before.
Willfully false representations in unattached application, where furnishing actual basis on which life policy was issued, will ordinarily void policy on theory that insurance was fraudulently procured.
Knowingly making false statement in application, in order to procure insurance, constitutes actual fraud, although insured may not have intended to prejudice insurer's rights.
Material fact misrepresentations by insured, if fraudulently made to induce acceptance of risk, will void policy, although application is not attached thereto, where application is basis upon which policy is issued (Civ. Code 1910, §§ 2479-2481).
"Material representation" in application is one that would influence prudent insurer in determining whether to accept risk, or in fixing amount of premium.
Truth and materiality of representations in application for insurance are generally issues of fact for jury, but are issues of law for court where testimony excludes every reasonable inference but one.
Evidence that representations in application, upon which insurer acted in issuing life policy sued on, as to medical treatment previous illness, and weight, were fraudulent, authorized directed verdict for insurer.
Error from Municipal Court of Atlanta; Clarence Bell, Judge.
Suit by J. M. Lee against the All States Life Insurance Company. Judgment for defendant, plaintiff's motion for a new trial was overruled, and plaintiff brings error.
Affirmed.
See also, Dillon v. Continental Trust Co. (Ga. Sup.) 175 S.E. 652.
T. J. Lewis, of Atlanta, for plaintiff in error.
Harold Hirsch & Marion Smith and Welborn B. Cody, all of Atlanta, for defendant in error.
Syllabus OPINION.
This was a suit on a policy of life insurance. The insurance company defended upon the ground of fraudulent misrepresentations in the application upon which it was induced to act, to its injury. The application was not attached to the policy. The trial judge directed a verdict in favor of the defendant, and the plaintiff excepted. Held:
1. While it is true that the policy sued upon contained the provision that "this policy shall be incontestable after one year from the date of issue," and it seems to be a universal holding that the insurance company, in order to obtain relief from the policy, must act within such prescribed time of limitation (see note in 64 A.L.R. 956-959; see also, in this connection, Massachusetts Benefit Life Association v. Robinson, 104 Ga. 256, 30 S.E. 918, 42 A.L.R. 261; Northwestern Ins. Co. v. Montgomery, 116 Ga. 799, 43 S.E. 79), yet where suit was actually instituted on the policy, and the answer of the insurance company was filed setting up fraud in its procurement, all within a year from the date of issuance of the policy, the running of the limitation prescribed in the policy was thereby stopped; and where such suit was dismissed and brought over more than a year from the date of such policy, the insurance company was not thereby prevented from filing such defense to the suit. See Powell v. Mut. Life Ins. Co. of N.Y., 313 Ill. 161, 144 N.E. 825, 36 A.L.R. 1239; Ætna Life Ins. Co. v. Daniel, 328 Mo. 876, 42 S.W.2d 584.
2. "While it is true that the representations as made in an unattached application cannot be treated as 'a part of the policy or contract' (Civ. Code 1910, § 2471), and are not to be taken as covenants or warranties, still, if such statements furnished the actual basis on which the policy was issued, and they were knowingly and willfully false with the intent by the applicant to defraud the insurer, the insurer may ordinarily set up such facts as a means for avoiding the policy, not under and by virtue of the terms of the contract, but because the insurance is thus shown to have been fraudulently procured." Metropolitan Life Ins. Co. v. Bugg, 48 Ga.App. 363, 172 S.E. 829, 830; Interstate Life & Accident Co. v. Bess, 35 Ga.App. 723, 134 S.E. 804, and citations; Couch v. Nat. Life & Accident Ins. Co., 34 Ga.App. 543, 130 S.E. 596; Southern Life Ins. Co. v. Hill, 8 Ga.App. 857, 70 S.E. 186.
3. Where a person makes, in an application for insurance, a false statement, knowing it to...
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