Mutual Ben. Health & Acc. Ass'n v. Milder
| Decision Date | 16 March 1950 |
| Docket Number | No. 32651,32651 |
| Citation | 152 Neb. 519,41 N.W.2d 780 |
| Parties | MUTUAL BENEFIT HEALTH & ACCIDENT ASS'N v. MILDER et al. |
| Court | Nebraska Supreme Court |
Syllabus by the Court.
1. The filling in of a blank in a written instrument is not, strictly speaking, an alteration of it. Where a blank is filled in after the execution and delivery of a written instrument, it is a question of authority so to do.
2. If an application for insurance is prepared by an agent of insurer and he fills in false answers to the interrogatories contained therein, which are truthfully answered by the insured, the insurer cannot rely upon such answers in an action in equity to rescind or reform the policy issued upon the application.
3. If the insured can prove that he made a different contract from that expressed in the writing, he may have it reformed in equity, and he is not prevented by the mere fact that he accepted and retained the policy and did not examine it until after a loss occurred.
4. If insured states the facts correctly to the agent of the company, he is not bound to exercise vigilance thereafter to determine whether or not the agent exercised good faith or truthfulness in his transactions on behalf of the company.
5. Where a question in the application for insurance calls for an answer peculiarly within the knowledge of the applicant, an untrue answer relating to a matter material to the risk and relied upon by the insured will avoid the policy.
6. Untrue representations made by the insured in his application where the questions eliciting such statement call for matters of opinion, judgment, or belief will not avoid a policy issued thereon unless it is shown that the misrepresentations were knowingly made with intent to deceive.
7. Rejection of an application for insurance because the applicant already had insurance exceeding insurer's limit is not material to the risk as respects necessity for disclosure in subsequent application to another company.
8. In an application for accident and health insurance a representation that no other insurance issued to the applicant had been cancelled is not false because of the prior voluntary election of the applicant to surrender a policy which had been issued to him.
9. A policy of insurance must be construed, at any other contract, in accordance with its general scope, its design, and the intention of the parties at the time it was made as disclosed by the whole instrument, and if its provisions are clear and unambiguous they must be understood in their ordinary meaning and applied in a reasonable manner.
10. The entire contract must be regarded with a conscious effort to give effect to every part of it without disproportionate emphasis upon one to the neglect of other provisions.
11. An insurance company may limit its liability in any reasonable manner which does not contravene public policy.
12. The health indemnity provision of a policy that insured must, to be entitled to maximum benefits, be confined continuously within doors and have regular medical attendance therein should be reasonably and not literally construed, but it should not be abrogated or disregarded and a recovery allowed because he is totally disabled when he is not confined.
13. The insured must be substantially confined within doors and have regular medical attendance therein by reason of illness to be entitled to the maximum benefits by virtue of such a provision, and if the insured is able to and does go about as he desires for purposes not connected with his sickness, he is not continuously confined within doors within the meaning of a provision requiring confinement continuously within doors and regular medical attendance therein.
Lyle Q. Hills, Edward A. Nelson, G. Robert Muchemore, all of Omaha, for appellant.
Jack W. Marer, Omaha, Norman Denenberg, Omaha, for appellees.
Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE and BOSLAUGH, JJ. BOSLAUGH, Justice.
Mutual Benefit Health and Accident Association, appellant, instituted this action against William Milder and Rose Milder, appellees, to rescind, on the ground of fraud and misrepresentation, a policy of accident and health insurance for which William Milder made application and which it issued to him as insured. Rose Milder, the wife of William Milder, is the beneficiary named in the policy, and is a party only because of this fact. The contest is between appellant and William Milder, appellee, and no further mention of Rose Milder as a party is made herein.
Appellant alleged the policy was issued because of its reliance upon and in consideration of statements made by appellee in the application, which was, by a provision of the policy, made a part of the insurance contract; that the insured knowingly and purposely made untrue and incomplete answers to questions material to the risk contained in the application for the insurance for the fraudulent purpose of inducing the issuance of the policy; that if the answers of the questions had been true and complete, the application would have been rejected and the policy would not have been issued; that the answers were warranties by appellee of the truthfulness and completeness of each of the matters stated by him; and that when appellant learned of the fraud and misrepresentations of appellee it elected to rescind the policy and tendered return of premiums paid with interest, less amounts received by appellee on claims under the policy, which he refused. Appellant seeks a determination of the rights and liabilities of the parties, a rescission and cancellation of the policy, and general relief.
Appellee admits the issuance to him of the policy, the standard provisions thereof as recited by appellant, denies all other claims by it, and alleges as a basis of a ffirmative relief that the agent of appellant propounded to appellee the questions of the application which he answered, as explained by him, and after the commencement of this case he first learned that the agent had not truthfully and correctly asked the questions or correctly inserted the answers to them as made by him; that four of the questions were not propounded to appellee or answered by him; and that the answers thereof were fraudulently and without his knowledge placed there by appellant. Thereby the application was materially altered, is not an application as required by statute, and is void and appellant is estopped from claiming or having any advantage because of it. Appellee requested reformation of the questions in controversy and relief in harmony with his version of the facts. He asserted he had paid all premiums due on the policy; that he was entitled to recover on it, when reformed in accordance with his claims, $100 a month during the time he suffered total disability and total loss of time from sickness or disease which confined him within doors and required visits therein by a legally qualified physician; that he had been since May 25, 1942, totally disabled, had sustained a total loss of time from disease, and had been confined indoors within the terms and conditions of the policy; that his disability was permanent; that he had performed all the obligations of the insurance contract; that there was due him thereon as health disability benefits $100 on May 25, 1942, and a like amount each month thereafter during total disability and loss of time; that he made demand therefor, which appellant refused, but, with knowledge of the facts, wrongfully claimed appellee was not confined indoors under the care of a physician, and was entitled to only $50 a month under the terms of the policy, and offered settlement to him on that basis; and that because thereof appellant was estopped to claim any other ground of non-liability. Appellee asked judgment for the amount claimed with interest, costs, and attorneys' fees. He alleged that he paid the premium due August 1, 1942, of $52 to protect his rights in the policy; that it provides that permanent total disability of insured resulting from sickness relieved him from the payment of any premiums due thereafter; and that he was entitled to judgment for $52 with interest thereon, and to an adjudication relieving him from the payment of any further premiums on the policy.
Appellant replied to the claims of appellee by denial of the new matter and by asserting that he had the policy in his possession, of which the application is a part, for more than six years; that he was barred from claiming that it did not state and answers given by him to the questions therein; and pleaded estoppels because appellee twice made and collected claims under the policy, because he sued appellant on the policy and alleged therein the issuance and validity of it and that a copy of the policy was in the possession of appellee, and because appellee, on at least three occasions since this case was commenced, changed his position in an effort to avoid the effect of evidence produced by appellant that informed appellee that appellant had discovered and knew the facts as to his fraud and misrepresentation in procuring the policy to be issued to him.
The court found in favor of appellees and against appellant; denied its petition and decreed reformation of the part of the policy consisting of a copy of the application as requested by appellee; that he was entitled to $100 a month, with interest on each installment from maturity thereof, as benefits for total, permanent disability and total loss of time, as provided by the policy, commencing with May 25, 1942, and as long as his disability continued; that he should recover $52, premium paid August 1, 1942, with interest; and that appellant should waive all premiums on the policy commencing with that date, and should pay all costs including $2,500 attorneys' fees. The motion of appellant for a new trial was denied, and it appealed.
Appellant contends that each of the findings and the decree are contrary to the evidence and...
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