Mut. Benefit Health & Accident Ass'n v. Marsh

• Decision Date: 16 June 1939
• Docket Number: No. 27443.,27443.
• Citation: 4 S.E.2d 84
• Parties: MUTUAL BENEFIT HEALTH & ACCIDENT ASS'N. v. MARSH.
• Court: Georgia Court of Appeals

4 S.E.2d 84

MUTUAL BENEFIT HEALTH & ACCIDENT ASS'N.

v.MARSH.

No. 27443.

Court of Appeals of Georgia,

Division No. 1.

June 16, 1939.

Rehearing Denied July 26, 1939.

Syllabus by the Court.

1. "Where it is shown that a material statement made in such application [for insurance] was false, that its falsity was known to the insured at the time it was made, that it was made with a view to procuring the insurance, that the company had no notice of its falsity, and that the company acted upon it to its injury, the law will conclusively presume an intent to deceive, and a case of actual fraud will be made out, although the insured may not have really intended to prejudice the rights of the company." Northwestern Life Ins. Co. v. Montgomery, 116 Ga. 799 (2), 43 S.E. 79.

2. "The materiality of a concealment or representation of fact depends, not on the ultimate influence of the fact upon the risk or its relation to the cause of loss, but on the immediate influence upon the party to whom the communication is made, or is due, in forming his judgment at the time of effecting the contract. The party thus sought to be influenced is generally the insurance company. Though the loss should arise from causes totally unconnected with the material fact concealed or misrepresented, the policy is void, because a true disclosure of the fact might have led the company to decline the insurance altogether, or to accept it only at a higher premium." In other words, the variation from the truth must be such as to change the nature, extent, or character of the risk. Firemen's Insurance Company v. Parmer, 51 Ga.App. 916, 917, 181 S.E. 880; Supreme Conclave v. Wood, 120 Ga. 328, 47 S.E. 940.

3. "All persons applying for life insurance in a life insurance company writing life insurance in this State shall submit to such reasonable rules and regulations as may be prescribed by such insurance company; and after a policy shall be issued on the life of such person, the beneficiary of such policy shall be entitled to collect the amount of such policy under the terms of the contract when it shall mature, un-less the applicant or beneficiary shall have been guilty of actual fraud or shall have made material misrepresentations in procuring such policy, which representations change the character and nature of the risk as contemplated in the policy so issued by the company. No statements, covenants, or representations contained in applications for insurance shall ever be held or construed to be warranties, but shall be held to be representations only." Code, § 56-908.

4. The evidence at least demanded a finding that the answers of the applicant for insurance, in reply to questions in the written application attached to the policy, were such a variation from the truth as to change the nature, extent, and character of the risk as contemplated in the policy issued by the company.

Error from City Court of Richmond County; Gordon W. Chambers, Judge.

Action by F. L. Marsh against the Mutual Benefit Health & Accident Association on a life, accident and health policy for loss of a leg. To review a judgment for the plaintiff, the defendant brings error.

Reversed.

Bussey & Fulcher, of Augusta, for plaintiff in error.

Curry & Curry and Paul T. Chance, all of Augusta, for defendant in error.

MacINTYRE, Judge.

On October 30, 1937, the plaintiff made an application to the insurance company for a life, accident, and health policy which was issued to him, the application being made a part of the policy. Thereafter, the insured accidentally lost a leg. He made a demand for payment under the policy which was refused, and he brought suit thereon. The defendant contended that the policy was void because of fraud and because of material misrepresentations in the application in that the plaintiff failed to disclose that he had other life, health, and accident insurance, or application therefor pending; failed to disclose that other life or disability insurance had been declined, postponed, rated up, or canceled; failed to disclose all claims demanded or received on account of injuries or illnesses; failed to disclose that he had had bronchitis, malaria, a spot on his lung, an infected sinus, and la grippe, and failed to disclose an operation for tonsils and adenoids.

The trial resulted in a verdict for the insured for the amount sued for ($1,091) and "all statutory charges and attorneys fees in amount of $300." The defendant's motion for new trial was overruled and it excepted. The only question presented is whether the evidence authorized the verdict, the defendant confining its motion to the general grounds and the special grounds which are merely elaborations of the general grounds.

The policy in question was issued to the plaintiff on November 8, 1937. Attached to and made a part of the policy was an application dated October 30, 1937, which contained, among other things, the following pertinent parts: 8. "What disability or accidental death insurance do you carry? What companies and amounts?" "None." "Have you any application for life or disability insurance pending? Answer to each." "No." 9. "Has any application ever made by you for life or disability insurance been declined, postponed or rated up or has any life or disability insurance issued to you been canceled? Answer to each." "No." "Has any renewal or reinstatement of life or disability insurance been refused? Answer to each." "No." "If so, give full particulars." 10. "Have you ever had any claim for or received indemnity on account of any injury or illness? If so, what companies, dates, amounts, and causes?" "Accident 1928. Automobile. Don't know--Mass. Mutual." 12. "Have you ever had any of the following diseases: Rheumatism, neuritis,.. tuberculosis, bronchitis,.. tonsilitis,.. malaria? Name diseases, dates and length of disability." "None of Above." "Has any of your family ever had tuberculosis?" "No." 13. "Have you ever received medical or surgical treatment or had any local or constitutional disease not mentioned above, within the last five years? Answer to each." "No." 14. "Have you ever been operated on by a physician or surgeon?" "No." 18. "Do you hereby apply to the Mutual Benefit Health & Accident Association for a policy to be issued solely and entirely in reliance upon the written answers to the foregoing questions, and do you agree that the Association is not bound by any statement made by or to any agent unless written herein; and do you agree to notify the Association promptly of any changein your occupation, or if you take additional insurance, and do you hereby authorize any physician or other person who has attended or may attend you to disclose any information thus acquired?" "Yes."

On the trial of the case the plaintiff insured testified, relative to the first part of question 8, that he did not have any insurance at the time he made his answer and that his answer was true. Relative to the second part of question 8 as to any pending applications for other insurance, he testified, "That question was not asked or answered by me." However, he further testified, "I had applied for a policy of insurance with the Provident Life & Accident Insurance Company on October 25th, 1937 [five days before the date of the application for the policy in question] but had not received it on October 30, 1937, the time that I applied for a policy with the defendant company. I did receive a policy from the Provident Life & Accident Insurance Company about three weeks later. That policy covered the same loss or indemnity as the one in this case covered, and paid me for the loss of my leg $1,000." As to question 9, relative to cancellation of any life or disability insurance, he testified on cross-examination: "As to this policy with the Benefit Company being canceled out on me due to my having so many claims, the trouble there was they canceled out the policies on nearly everybody having a policy with them. It was their custom to cancel them after a man got down and out. That policy was handled by the Railroad Company, the premiums being deducted from our pay. However, they did cancel the policy." With reference to question 10, the insured testified and the documentary evidence showed that the insured, over a period of 13 years, to-wit from January 12, 1920, to December 21, 1932, had sustained approximately 7 accidents and was sick approximately 8 times from which he had received approximately $2,200 in indemnities. As to question 12, the undisputed evidence showed, and the insured admitted, that he had had "malaria fever and la grippe, " being disabled for 28 days; that he had had his tonsils and adenoids removed; that he had had "bronchitis and infected sinus, " being disabled for 32 days, and on another occasion had had the same trouble, being disabled 65 days. Relative to question 14, the insured said he had received certain benefits "which covered an operation for tonsil and adenoids removed." It further appears from the evidence that the insured made a proof claim on March 12, 1938, for the loss of his leg on March 3, 1938, which claim was signed by him and sworn to before a notary and contained the following questions and answers: "Have you any other accident insurance?" "No." (It being unquestioned by the evidence that he did.) 19. "Have you ever received any injury prior to the one herein mentioned?" "No." "If so state when and what it was?" "No." (It being unquestioned by the evidence that he had.)

It has been repeatedly held by this court and the Supreme Court that as a general rule questions as to the truth and materiality of representations in policies of insurance are questions of fact for the jury. However, where all the testimony produced on the trial, relative to questions of fact, "excluded every reasonable inference but one, the issue becomes an issue of law, for determination by the court." Life Ins. Co. of Virginia v. Pate, 23 Ga.App. 232(3), 97 S.E. 874; New York Life Ins. Co. v. Hollis, 177...