Martin v. Metropolitan Life Ins. Co.

• Decision Date: 26 October 1951
• Docket Number: No. 13404.,13404.
• Citation: 192 F.2d 167
• Parties: MARTIN v. METROPOLITAN LIFE INS. CO. METROPOLITAN LIFE INS. CO. v. MARTIN.
• Court: U.S. Court of Appeals — Fifth Circuit

192 F.2d 167 (1951)

MARTIN v. METROPOLITAN LIFE INS. CO. METROPOLITAN LIFE INS. CO. v. MARTIN.

No. 13404.

United States Court of Appeals Fifth Circuit.

October 26, 1951.

Hugh M. Dorsey, Jr., Madison Richardson, Atlanta, Ga., for appellant.

Alex W. Smith, Atlanta, Ga., for appellee.

Before SIBLEY, RUSSELL, and RIVES, Circuit Judges.

SIBLEY, Circuit Judge.

The appellant, Mrs. Sarah Martin, formerly Mrs. Billingslea, sued Metropolitan Life Insurance Company as beneficiary on a policy of insurance on the life of her former husband Louis T. Billingslea for $5,000.00, exhibiting the policy, and Billingslea's application therefor which by Georgia law is a part of the policy, and alleging that it was issued March 17, 1947, and a year's premium was paid by Billingslea at the time of issuance; and that Billingslea died July 5, 1947; and that she had made due proofs of death, but the Company had refused payment. The Company's answer, as amended, admitted these facts, but denied liability except for the return of the premium which had been tendered and refused, on the ground that Billingslea had died of carcinoma of the kidney found to exist as early as March 12, 1947. It was further pleaded that in the exhibited application signed by him on March 6, 1947, Billingslea had been asked, "What physicians, healers or other practitioners, if any, not named above, have you consulted or been treated by, within the past five years? If none, so state." and he answered, "None"; which was a materially false representation, in that he had since November 24, 1944, been frequently treated by a Dr. Bancker for chronic bronchitis and colds, and Dr. Bancker had on January 6, 1947, sent him to Dr. Pittman who treated him for prostatitis and urethral stricture from January 8 till shortly before the death; and that on March 6, 1947 he consulted Dr. Bancker about a dull pain under his shoulder blade which had existed for a month. At this time Dr. Bancker noticed several small nodules or tumors under the skin, and directed Mr. Billingslea to consult Dr. Stewart about them. Billingslea consulted Dr. Stewart on March 12, and on March 14 Dr. Stewart reported to Dr. Bancker that there was a large tumor five by five inches in diameter on the right kidney, and in his opinion the small nodules were metastases from it, and that Billingslea's condition was cancerous and hopeless. The answer alleged these things were all concealed from the Company and not discovered by it till disclosed in Mrs. Billingslea's proof of death; when it avoided the policy and tendered back the premium. During the trial before a jury the Company struck out its allegation of wilfulness in the concealment and the plaintiff abandoned her claim that attorneys' fees were recoverable for bad faith in the defense. On the remaining issue whether there was a material concealment which affected the risk and invalidated the insurance, the Court directed a verdict for the defendant. The correctness of that ruling is the controlling question on this appeal.

It is conceded that though the policy was issued at the Company's home office in New York, it was applied for and delivered in Georgia and is governed by Georgia law. That law is the general law as modified by statute. There are several sections of the Georgia Code which have frequently been construed and applied by the Court of Appeals and by the Court of last resort, the Supreme Court of Georgia. The Code references to actual fraud and wilful concealment are not directly applicable, nor are cases on that question. The Supreme Court discussed the Code sections and reviewed many of the cases on innocent concealment and misrepresentation recently in Vaughn v. National Life & Accident Insurance Company, 189 Ga. 121, 5 S.E.2d 238, and in Preston v. National Life & Accident Insurance Company, 196 Ga. 217, 26 S.E.2d 439, 148 A.L.R. 897. Our Court more recently in Mutual Benefit Health & Accident Association v. McCranie, 5 Cir., 178 F.2d 745, 747, after quoting the Georgia Statutes and reviewing some of the Georgia cases, said "The appellate courts of Georgia have held in an unbroken line that a material misrepresentation as to a known fact will avoid a policy if such misrepresentation changes the character or extent or nature of the risk." In that case the misstatement was in answer to a question in the application, as here, but had nothing to do with the cause of the death. What makes the misrepresentation material is not that the thing misstated caused or contributed to the death, but that it affected the risk, and probably influenced the insurer's acceptance of the risk.

What are the clear facts here? Billingslea, on January 30, 1947, signed in Atlanta, Georgia, Part A of the application to the Company which stated, among other things, "It is understood and agreed that (1) The foregoing statements and answers are correct and wholly true and together with the answers to questions in Part B hereof" (not executed till March 6, 1947) "shall form the basis of the contract of insurance if one be issued. * * * (4) The Company shall incur no liability under this application until it has been received, approved and a policy issued and delivered and the full first premium specified in the policy has been paid to and accepted by the Company during the life-time and continued insurability of the applicant." The importance of this quotation is that it shows that Billingslea since January 30, 1947, was aware that he was to answer the questions and submit to the medical examination provided in Part B; that his answers were to be the basis of the contract; and that in fact no contract was made till the policy was issued on March 17, 1947, and the premium paid and the policy delivered in Atlanta some days later.

Dr. Bancker testifies without contradiction that Billingslea had been under his treatment since November 24, 1944 for chronic bronchitis, having at that time choking spells, expectorating a cupful of mucus and having fallen unconscious to the floor. He was treated again for colds in January, 1945 and in December, 1945 for inflamed spots on his ankle with pain and swelling. He took injections of 20,000 units of penicillin. In April, 1945 Dr. Bancker treated him for running of the nose and eyes and sneezing, and he was given 40,000 units of penicillin, repeating the treatment on April 27. On April 29,...