Metropolitan Life Ins. Co. v. Madden, 9719.

• Decision Date: 05 February 1941
• Docket Number: No. 9719.,9719.
• Parties: METROPOLITAN LIFE INS. CO. v. MADDEN et al. MADDEN v. METROPOLITAN LIFE INS. CO.
• Court: U.S. Court of Appeals — Fifth Circuit

117 F.2d 446 (1941)

METROPOLITAN LIFE INS. CO. v. MADDEN et al. MADDEN v. METROPOLITAN LIFE INS. CO.

No. 9719.

Circuit Court of Appeals, Fifth Circuit.

February 5, 1941.

Peter O. Knight, C. Fred Thompson, P. O. Knight, Jr., and Jno. Bell, all of Tampa, Fla., for appellant, Metropolitan Life Ins. Co.

Morris E. White and Calvin Johnson, both of Tampa, Fla., opposed.

Before SIBLEY, HUTCHESON, and HOLMES, Circuit Judges.

HUTCHESON, Circuit Judge.

Appellee, Marguerite Madden, sued appellant on one, appellee, Madden Furniture, Inc., sued it on two, policies¹ for $5,000 each, issued on the life of Derrel D. Madden, and the suits were consolidated. In each suit statutory attorney's fees were claimed. The defenses to the policies were false answers by Madden to questions in his applications² for insurance. Each of the three applications contained the Question 11, "Have you ever had any ailment or disease of (c) The Stomach or Intestines?", to each the applicant answered "No." It was alleged that he had had an ailment or disease of the stomach or intestines, having suffered cardio spasm or spasmodic contractions of the cardiac end of his stomach and adjoining esophagus during or about the month of October, 1937. Each of the applications also contained the question: "13. What clinics, hospitals, 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", to which the applicant answered "none." Liability to Marguerite Madden, for the statutory attorney's fee, was defended on the ground that the insurance was bound in, and the contract was governed by the laws of New York.

At the close of all the evidence, plaintiffs and defendant each moved for a directed verdict, plaintiffs on the ground that it appeared as matter of law that, no material, false representations were made; the defendant on these grounds. "First, the defendant has shown by the preponderance of the evidence that the insured under the policies herein involved falsely represented a material fact, to-wit, his consultation of a physician within five years immediately preceding each of his applications for the policies in question and such consultation is shown by the evidence to be of such a nature, as to be a misrepresentation as a matter of law. Second, the defendant has shown by uncontradicted evidence that the insured in the policies herein involved falsely represented a material fact, to-wit: His having an ailment of the stomach or intestines, and such a misrepresentation is material as a matter of law."

The motions were denied, the causes were submitted to a jury and there was a verdict and judgment for the plaintiff in each case for the full amount sued for, except that attorney's fees were denied Marguerite Madden. Appealing from these judgments, defendant is here insisting (1) that because of proven misrepresentations in the applications, a verdict should have been directed for it and (2) that if not, the judgments should be reversed for errors in the charge and in ruling on the admission of evidence.

Plaintiff, by cross-appeal, insists that the disallowance of attorney's fees was error.

There was no dispute as to the material facts, the most material being testified to by Dr. Clark of Gadsden, Alabama, whose deposition defendant introduced. Madden was manager of a furniture business in Gadsden, Alabama, from January, 1936, until he moved to Tampa in August of 1938 to establish the business known as Madden Furniture, Inc., of which he was secretary and treasurer. Dr. Clark knew Madden and was a customer of his. One day, while Clark was shopping in the furniture store, Madden told him that he had indigestion. The doctor suggested that he come to the office if he wanted to be examined. Either on this occasion or previously at the store, Madden had mentioned his having a cold to Dr. Clark. The doctor's history sheet was not accurate as to the time of treatment for the cold, it did not show the exact date of the first visit, but the first complaint noted thereon was cold in the head with some pain in the neck and legs, the finding was that he had a slight cold. On this first visit, or on a subsequent visit soon after, at any rate, on October 15, 1937, Madden complained of a sense of fullness in the epigastrium particularly following ingestion of greasy foods, highly seasoned foods, and heavy vegetables. Pain appeared two hours after eating, relieved by food and soda. Madden said that he ate an enormous quantity at each meal and this was followed by the disturbance. The doctor made his diagnosis on October 15, but had him return each day for the next three days following this visit. His intestinal tract was examined with a fluoroscope after he had swallowed barium. No electrocardiogram was made. Within the three days Dr. Clark diagnosed the trouble as cardio spasm due to dietary indiscretion, overwork and nervous strain. He told Madden of this diagnosis. Prescribed was a general soft diet, resting habits and stopping or reduction of cigarettes. He was advised to avoid alcohol. Madden was instructed to come back to the office every two weeks for the next three months in accordance with the doctor's regular routine in his type of case. He did return, following the first four visits on successive days, on November 15th, November 30th, December 15th, 1937, January 20th, 1938, January 25th, February 4th, February 23rd, March 29th, April 28th, and July 1st, 1938. The doctor thought that he speedily improved and considered his cardio spasm completely cured on the visit of January 25th, when he was again given barium. He was advised however, to continue his diet. On the occasion of his last visit Madden inquired of the doctor whether the ailment which he suffered would preclude him from obtaining life insurance and the doctor replied it would not. In his deposition, the doctor defined cardio spasm as a symptom and not a disease. "It is a spasm of the muscles in the upper part of the stomach not permitting foods to enter the stomach when ingested rapidly. It is usually due to dietary indiscretion, overwork, and nervous strain, as it was in this case." It was his opinion that it "should have practically no bearing on his general health unless persisted in." Clark also testified that he thought and told Madden he was in perfectly good health.

Madden was examined, for the first of the policies issued, on August 2, 1938, the application was completed that day, and the policy was issued September 10, 1938. The second examination was made January 20th, 1939, the application, a copy of which appears in the record, was then filled in and signed and the policy was issued on or about that day. The third application was completed on the occasion of the third examination, which was on April 5, and the policy was issued April 17, 1939. Dr. Crum, medical examiner for the Metropolitan at Tampa, made the examinations and filled in the medical parts of the applications. Interpreting his handwriting, he testified that the answers to the questions thereon which are here involved were "no" and "none" as alleged in defendant's answer. Usual routine examinations were made. Dr. Crum did not approve or disapprove applications from a medical standpoint and made no general recommendations one way or the other.

Charles Crown, lay underwriter in the defendant's home office testified that he approved the one of the applications which had been assigned to him for action, that no one else had anything to do with it from an underwriting or approving standpoint and that if the applicant had set forth his treatment by Dr. Clark on the dates mentioned in that doctor's deposition, he would have referred the application to the medical division for their consideration. He would in such case, have taken no other action.

Dr. Wilson, assistant medical director of the Metropolitan, qualified as familiar with the standards, customs, and practices, and the rules and regulations of his company and those generally followed by other insurance companies in determining the acceptability, from a medical standpoint, of applicants on the basis of their applications for ordinary and intermediate policies. One of the principal duties of such medical directors is to investigate impairments or important past medical history shown by applications coming to the home office. Neither of the three applications here involved (which were exhibited to him) was referred to him or to the medical division for consideration. They are of the type passed by lay approvers since they show no physical impairments and no important past medical history. Had they been received in the medical division and shown treatments of the applicant by Dr. Clark on the dates mentioned in that doctor's deposition, they, the medical division, would have asked for a statement from Dr. Clark, requesting him to give them full particulars as to what he treated the applicant for, a diagnosis, in other words. Plaintiffs' objection to the question which elicited the testimony described in the last sentence was overruled but the same objection to the succeeding and following question and answer was sustained.

"Q. Assuming further, Doctor, on those dates as set forth in my previous question this day, Derrel D. Madden had been treated for a condition diagnosed by Dr. Clark as due to dietary indiscretion and cardio spasm; what action would you have taken with respect to each of these applications? A. I would have declined them."

Mrs. Madden testified; that her husband was never ill, was an energetic worker and a very healthy looking person; that his weight and appearance did not change during his visits to the doctor; and that except for an appendicitis operation in 1929, he had never been ill or missed any time from his work since they had been married in 1923; and that during his visits to the doctor, he went to work and came home as usual and as...