Magee v. National Life & Acc. Ins. Co.

• Decision Date: 12 June 1963
• Citation: 201 Pa.Super. 140,192 A.2d 752
• Parties: Evelyn MAGEE, a/k/a Effie Magee, Appellant, v. The NATIONAL LIFE AND ACCIDENT INSURANCE COMPANY.
• Court: Pennsylvania Superior Court

192 A.2d 752

201 Pa.Super. 140

Evelyn MAGEE, a/k/a Effie Magee, Appellant, v. The NATIONAL LIFE AND ACCIDENT INSURANCE COMPANY.

Superior Court of Pennsylvania.

June 12, 1963.

Albert E. Acker, Wiesen, Cusick, Madden Joyce, Acker & McKay, Sharon, for appellant.

Brockway & Brockway, William C. Kuhn, Philip E. Brockway, Sharon, for appellee.

Before ERVIN Acting P. J., and WRIGHT, WOODSIDE, WATKINS, MONTGOMERY and FLOOD, JJ.

PER CURIAM.

Judgment for the defendant entered by the court below on the pleadings is affirmed on the opinion of Judge McKay. See also Shafer v. John Hancock Mutual Life Insurance Company, 410 Pa 394, 189 A.2d 234 (1963).

RHODES, C J., absent.

The opinion of Judge McKay follows:

The case is before the Court upon a motion by the defendant for judgment on the pleadings. The action is in assumpsit to recover upon a life insurance policy. The defense advanced is that the deceased knowingly made false answers to questions set forth in the application attached to the policy which, it claims avoids the policy.

The facts set forth in the pleadings which are admitted for the purpose of disposing of the motion for judgment are as follows:

On February 7, 1962, Roger D. Magee, hereinafter referred to as the insured, signed an application to the defendant company for insurance upon his life in the amount of $2,000. The policy was issued February 12, 1962. The beneficiary named in the policy was Effie Magee, the mother of the applicant. The insured died February 23, 1962, as the result of injuries sustained in an automobile accident. Thereafter the plaintiff beneficiary furnished proof of his death to the defendant and demanded payment of the face amount of the policy. The defendant refused to pay more than the amount of the premiums paid by the insured during his lifetime, which it offered to refund to his estate.

The reason assigned by the defendant for its refusal to pay was that the insured allegedly had made false and fraudulent statements in the application which was attached to the policy in that he answered 'no' to each of the following three questions:

'Q. Has proposed insured consulted or been treated by a doctor or other practitioner or at a dispensary or clinic within past five years?'

'Q. Has proposed insured had any injury, illness or operation within past five years?'

'Q. Has proposed insured ever been confined to a hospital or sanitarium for any reason?'

In fact, (as set forth in New Matter filed with the answer) the insured was admitted to the Shenango Valley Osteopathic Hospital on September 1, 1961, with diagnosis 'coronary insufficiency due to unknown cause (myocardian ischemia); epilepsy,' and discharged therefrom on September 13, 1961, and readmitted to the hospital on October 26, 1961, with an illness diagnosed as a foreign body of the cecum and discharged therefrom following surgery on November 11, 1961.

The insured (as the plaintiff's Reply avers) informed the defendant's agent at the time the application was made of the above illnesses and hospitalizations, answering questions 12, 13 and 14 of the application truthfully, but the written answers on the application as set down by the agent did not correctly reflect the answers given to the agent by the insured.

The policy was issued to the insured contingent upon and in reliance upon the truth and correctness of the answers as written in the application.

The application contained the following statement after the questions and answers referred to above and before the signature of the agent and the applicant, the agent signing as a witness:

'I HEREBY DECLARE that all statements and all answers to the above questions * * * are complete and true, and I agree that, together with this declaration, they shall constitute an application for insurance. I AGREE (1) that no field representative of the Company has authority to waive the answer to any question in this application, to modify this application, or to bind the Company in any way by making any promise or representation, or by giving or receiving any information; (2) that, except as otherwise provided in the Conditional Receipt bearing the same date as this application, no contract of insurance shall become effective unless and until a policy has been delivered to me during the lifetime and good health of the Proposed Insured and the full first premium paid on said policy.'

Also on the application, and above the signature of the agent, the following was listed under remarks:

'I certify that I have asked the Applicant all of the questions in Part A (Also Part B, if applicable) and that the answers have been recorded as given by the Applicant. THE APPLICATION WAS SIGNED IN MY PRESENCE AND I recommend the Proposed Insured for the insurance applied for.'

Directly underneath the last statement and signature of the agent was a medical authorization signed by the insured.

It is now our duty to determine whether, assuming the above facts to be true, it is possible for the plaintiff to recover or whether the pleadings show a complete defense to the action.

The general principles of law pertinent to cases of this kind are well established.

(1) The Act of 1921, May 17, P.L. 682, Section 622 (40 P.S. § 757) provides as follows:

'The falsity of any statement in the application for any policy covered by subdivision (b) of this article shall not bar the right to recovery thereunder, unless such false statement was made with actual intent to deceive, or unless it materially affected either the acceptance of the risk or the hazard assumed by the insurer.'

Under that Act it has been held that false answers in an application that the insured has not had medical or surgical attention within five years is material to the risk. Koppleman v. Commercial Casualty Ins. Co., 302 Pa. 106, 153 A. 121. One of the reasons that the failure to furnish information is regarded as material to the risk is that the information would have enabled the insurer to protect itself by making further investigations. Boltz v. Metropolitan Life Insurance Co., 128 Pa.Super. 147, 193 A. 400; Bailey v. Pacific Mutual Life Insurance Company of California, 336 Pa. 62, 6 A.2d 770.

(2) Where the application falsely states that the insured has not had medical treatment and has not been confined to a hospital within a recent period and, in fact, he was so treated and for such serious ailments that the answers must necessarily have been knowingly false, the plaintiff cannot recover. Loder v. Metropolitan Life Ins. Co., 128 Pa.Super. 155, 193 A. 403; Kzyszton v. John Hancock Mutual Life Ins. Co., 320 Pa. 65, 181 A. 587; Bailey v. Pacific Mutual Life Insurance Co. of California, supra; Gimbel v. Aetna Life Ins. Co., 95 Pa.Super. 1; Panopoulos v. Metropolitan Life Ins. Co., 96 Pa.Super. 325; Kizirian v. United Benefit Life Insurance Company, 383 Pa. 515, 119 A.2d 47.

In all of the above cases it was held that the trial court had properly directed a verdict for the defendant or entered judgment in its favor notwithstanding the verdict. In another case, Reeder v. Metropolitan Life Ins. Co., 340 Pa. 503, 504, 17 A.2d 879, under similar circumstances, judgment was entered on the pleadings as the defendant has moved for in the instant case.

(3) Where the prior hospital and medical treatment are so minor or otherwise such that it could be reasonably inferred that the answers were not necessarily knowingly false (i. e., the insured could have forgotten them) such questions as whether the applicant made untrue statements with the actual intent to deceive or whether the answers were incorrectly recorded by the agent of the insurance company are questions of fact for the jury, unless the insured has expressly warranted otherwise in the application. Evans v. Penn Mutual Life Ins. Co. of Philadelphia, 322 Pa. 547, 186 A. 133; Travellers Ins. Co. v. Heppenstall Co., 360 Pa. 433, 61 A.2d 809; Burton v. Pacific Mutual Life Ins. Co., 368 Pa. 613, 84 A.2d 310; Indovina v. Metropolitan Life Ins. Co., 334 Pa. 167, 5 A.2d 556; Koppleman v. Commercial Casualty Ins. Co., supra; Matovich v. Mutual Benefit Health & Accident Ass'n, 157 Pa.Super. 604, 605, 43 A.2d 648; Bradich v. Metropolitan Life Ins. Co., 128 Pa.Super. 513, 194 A. 522.

The leading case in support of the above rule is that of Evans v. Penn Mutual Life Insurance Company of Philadelphia, supra. In that case the court stated the rule and the qualification as follows at page 552 of 322 Pa., at page 138 of 186 A.:

'Whether true answers were made, and whether the answers as made were correctly written down by the agent of the insurance company, and the good faith of the party making the answers to the best of his knowledge and belief are questions which go to the very essence of the insurance risk, and the parties should not be denied the right to have such matters determined before a proper tribunal unless they have covenanted otherwise.' (Italics supplied.)

The above rule is particularly applicable when the insured is a person of foreign extraction with a limited ability to understand the English language. Feinberg v. New York Life Ins. Co., 256 Pa. 61, 100 A. 538; Gancsos v. Reserve Life Ins. Co. of Dallas, Texas, 194 Pa.Super. 247, 166 A.2d 312.

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