Mid-Continent Life Ins. Co. v. House

• Decision Date: 05 April 1932
• Docket Number: Case Number: 21344
• Citation: 156 Okla. 285,1932 OK 260,10 P.2d 718
• Parties: MID-CONTINENT LIFE INS. CO. v. HOUSE.
• Court: Oklahoma Supreme Court

1932 OK 260

10 P.2d 718

156 Okla. 285

MID-CONTINENT LIFE INS. CO. v. HOUSE.

Case Number: 21344

Supreme Court of Oklahoma

Decided: April 5, 1932

SYLLABUS

¶0 1. Insurance--Life Insurance--Purpose of Provision in Application That Policy not in Effect Until Acceptance by Insured "During Lifetime and in Good Health."

In an application for insurance which provides that the company shall not incur any liability upon said application until the policy has been issued by the company and the first premium has actually been paid to and accepted by the company and the policy has been accepted by said insured during her lifetime and good health, held: That such a provision is for the benefit of the insurer to protect such company against a contingency which might arise in that interim during which the insured might become seriously ill, suffer a severe injury impairing her health, and to guard against the delivery of such policy in the event of the death of the insured.

2. Same--Question of Fact Whether Insured in Good Health.

Whether a person is in good health as that term is used in its ordinary meaning at the time of the delivery of an insurance policy must depend upon the facts and circumstances of each given case and cannot be determined by any general rule. Such questions are for the determination of a jury or the court sitting as a jury as the trier of the facts.

3. Same--Burden of Proof on Insurer to Prove Lack of Good Health.

When a life insurance policy containing such a provision as set forth in paragraph 1 of the syllabus has been delivered and the first premium paid, the burden of proof is upon the defendant insurance company to prove that the policy was delivered while the insured was not in good health.

4. Same--Judgment for Plaintiff on Life Insurance Policies Sustained.

Record examined; held, that the evidence is sufficient to support the verdict.

Appeal from District Court, Coal County; P. L. Gassaway, Judge.

Action by Lloyd C. House against the Mid-Continent Life Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Rittenhouse, Lee, Webster & Rittenhouse, for plaintiff in error.

Trice & Davison and Ramsey & Howell, for defendant in error.

McNEILL, J.

¶1 This is an appeal from a judgment rendered by the district court of Coal county, Okla., in favor of the plaintiff, Lloyd C. House, against the defendant, Mid-Continent Life Insurance Company. The parties will be referred to as they appeared in the trial court.

¶2 The plaintiff brought the action against said defendant upon two policies of life insurance in the total sum of $ 10,000, issued by said defendant upon the life of Etta E. House, the wife of said plaintiff, said plaintiff being the beneficiary named in said policies.

¶3 The defendant resisted payment on said policies and relied upon two defenses:

(1) Fraud in the procurement of said policies;

(2) That the assured was not in good health at the time the policies were delivered to her.

¶4 In reference to the first defense, defendant alleges that the policies sued upon were issued by the defendant to Etta E. House, the wife of plaintiff, upon her written application therefor, in which application the said Etta E. House falsely and fraudulently set forth that, at the time of the execution and delivery thereof to said defendant, the said Etta E. House was in good health; that at the time of the execution and delivery of said application, the said Etta E. House well knew that she was suffering from a disease which she then knew, or could have known by the exercise of reasonable diligence, to be a cancer; that said application was made and furnished to said defendant with the intent and purpose of inducing said defendant to issue to said Etta E. House the policies of insurance in question, and for the purpose of insuring her against disability or death by reason of a disease with which she knew she was afflicted, or could have known by the exercise of reasonable diligence.

¶5 As to the second defense, defendant alleged that, under the terms and provisions in each of said policies, said Etta E. House expressly agreed that said defendant should not incur any liability upon said applications until said policies had been issued by said defendant and the first premiums thereon had actually been paid, and until said policies had been delivered to and accepted by the said Etta E. House, during her lifetime and while in good health; that at the time of the delivery of the policies in question, the said Etta E. House was not in good health, but was afflicted with a disease which caused her death; that by reason thereof said policies of insurance did not go into force and effect at the time of the delivery thereof, and were null and void thereafter, and null and void at the time of the death of the said Etta E. House. Defendant prayed that the plaintiff take nothing against said defendant and that the policies be canceled by reason of the foregoing facts and the breach and violation of the terms and provisions set forth in said policies.

¶6 It appears from the record that the defendant company had previously solicited insurance on the life of said decedent; that the deceased had an independent income of her own, from investments and salary in about the sum of $ 300 a month, and that her husband was carrying one policy of life insurance in the amount of $ 10,000 in the defendant company, and another policy of like amount in the New York Life Insurance Company, in both of which the said Etta E. House was made the beneficiary; that the insurance agent for the defendant company went to Coalgate after he had been called over the telephone by Mr. House, the plaintiff, who inquired as to when he was coming to Coalgate. The agent called the following day, at Coalgate, but did not find Mr. House and went to the bank where Mrs. House worked and she informed him that she had decided to take out some insurance. The said agent of the company testified that he did not know the business about which Mr. House had called him; that on the night of December 6th he took the applications for the policies in question and informed the deceased that it was necessary for her to go to a doctor for an examination. Dr. Hipes examined the deceased for the company and stated in his report to the company that he unreservedly recommended the applicant as a first class risk; that he was satisfied as to the substantial correctness of all the answers of the applicant; and that he had reviewed all answers and carefully examined the assured. Said agent, who resided at Oklahoma City and was formerly a resident of Coalgate, mailed the policies in question to the deceased, and testified that the same should have reached the deceased on the morning of December 27th.

¶7 It further appears from the record that the insured was about 45 years of age, active and vigorous in her work, engaged at the time as assistant receiver in several failed banks, and also assisted her husband in the theater and garage business; that her health had always been good; that on the evening of the 27th of December, 1928, while deceased was hanging some picture frames at the theater, she informed her husband that she had a catch in her arm; that after they went to their home that evening the deceased took a bath; that after she had finished her bath she came to the room where plaintiff was lying down, and for the first time informed him she had a lump on her right breast, which was about the size of a small pecan. The record does not show that she ever knew of its presence before this time.

¶8 The record shows that the insured was a Christian Scientist and had followed this form of belief for a period of about 25 years; that she and the plaintiff had been married for a period of about 22 years; that plaintiff, after he had been informed by the deceased in reference to the lump in her breast, went with the deceased to McAlester on the following day, December 28th, to consult Dr. Willour; that deceased received no medical treatment, but left on February 5, 1929, for Boston to the Christian Scientist Benevolent Association; that the insured died on May 10, 1929.

¶9 Counsel for defendant group all of their assignments of error under one proposition, as follows:

"That the provision in the application, as follows: 'That the company shall not incur any liability upon this application until the policy has been issued by the company and the first premum has actually been paid to and accepted by the company or its authorized agent and the policy has been delivered to and accepted by me during my lifetime and good health,' constitutes a condition precedent to any liability under the policies, regardless of whether or not Etta E. House knew of the malady with which she was then afflicted, and that since the evidence conclusively established that the insured must have been afflicted with such malady long prior to the making of the application and to the issuance or delivery of the policies the same never came into force or effect, but were void instruments at the time of their issuance and delivery, and at all times thereafter."

¶10 Two defenses were interposed on behalf of the defendant. The first defense was based upon fraud in the procurement of the policies by the insured making willful misrepresentations in her application for said policies, with the intent and purpose of inducing the defendant to issue said policies. As to this defense, counsel for defendant admit knowledge was a necessary element. In their brief they state:

"The first defense above admittedly was not established. It was impossible for defendant to develop any evidence whatever to establish knowledge on the part of Mrs. House that she had a lump in her breast the size of a hickory nut at the time she made the application, or at the time she received the policies, regardless of the seeming impossibility that any one of reasonable intelligence could be so afflicted and not know it. *

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