Mutual Life Ins. Co. of New York v. Hurni Packing Co.

• Decision Date: 01 September 1919
• Docket Number: 5365.
• Parties: MUTUAL LIFE INS. CO. OF NEW YORK v. HURNI PACKING CO. [1]
• Court: U.S. Court of Appeals — Eighth Circuit

260 F. 641

MUTUAL LIFE INS. CO. OF NEW YORK v. HURNI PACKING CO. ^[1]

No. 5365.

United States Court of Appeals, Eighth Circuit.

September 1, 1919

R. L Read, of Des Moines, Iowa, and G. T. Struble, of Sioux City Iowa (Read & Read, of Des Moines, Iowa, and Jepson & Struble of Sioux City, Iowa, on the brief), for plaintiff in error.

Edwin J. Stason, of Sioux City, Iowa, for defendant in error.

Before SANBORN, Circuit Judge, and MUNGER and YOUMANS, District judges.

MUNGER District Judge.

In this case Hurni Packing Company, the beneficiary of a life insurance policy issued in Iowa to Rudolf Hurni by the Mutual Life Insurance Company of New York, brought suit against the insurer for the amount of the policy. The answer alleged that the policy was not in force, because Hurni made fraudulent and false representations in his application for the policy and thereby obtained the policy and the prerequisite certificate of health from the insurance company's medical examiner.

There was a trial to a jury, but at its close each of the parties asked the court for a directed verdict. The court directed a verdict for the plaintiff for the amount of the policy, and from the judgment thereon the insurer prosecutes this writ of error. The errors assigned relate to the direction of the verdict in favor of the plaintiff. There is very little dispute as to the facts.

To obtain the policy the insured made a written application, and he also signed a written statement, which he made to the medical examiner of the insurer on September 3, 1915. This statement contained the following questions and answers:

'18. What illness, diseases, injuries, or surgical operations have you had since childhood?

'Pneumonia, one attack; fall 1899; duration 3 weeks; severity moderate; results, good; don't remember date of recovery.

'19. State every physician or practitioner who has prescribed for or treated you, or whom you have consulted in the past five years.

'None consulted.

'20. Have you stated, in answer to question 18, all illnesses, diseases, injuries, or surgical operations which you have had since childhood?

'Yes.

'21. Have you stated, in answer to question 19, every physician and practitioner consulted during the past five years and dates of consultation?

'Yes.

'22. Are you in good health?

'Yes.'

Hurni died in July, 1917, aged 47 years. He had resided at Sioux City, Iowa, since 1885, and had been engaged in the meat-packing business for many years before his death. He was the principal owner of this business and gave it his personal attention, regularly devoting long days of service to its demands. In 1899 Hurni had an attack of pneumonia, but recovered. After that he was subject to what his wife called 'colds' two or three times a year, sometimes confining him to his house for a day. Dr. Clingan was Hurni's regular family physician, and he testified that he made one professional visit to see Hurni in 1911 and prescribed for him; that Hurni consulted him at his office on February 21, and also on April 24, 1912, and he then gave him medical treatment; that he visited and prescribed for Hurni at his home on October 4, 1913; and that Hurni consulted him and he prescribed for him twice thereafter during that year; that Hurni came to his office once in 1914, and obtained a prescription; and that in 1915 and prior to September 2 (which was the date of Hurni's statement to the insurance company's examiner) he had professionally visited Hurni on March 9 and also on May 31. Dr. Clingan testified that most of Hurni's illnesses were of an influenza nature, and all resulted from overwork. Hurni spent the greater part of June, July, and August, of 1913, at the health resort of Excelsior Springs, Mo. Dr. Clingan had examined him before he made this trip, had advised that he go there, and had told him that if he did not get away from his work he would collapse. At Excelsior Springs, Hurni consulted Dr. Bogaard, and then consulted Dr. Prather, was examined by him for half an hour, and thereafter, during his stay at Excelsior Springs, Hurni went to Dr. Prather's office for serum treatments, of which he took a number, which his wife estimates as a dozen, although she said it might have been 30. These treatments were given to Hurni by hypodermic injections.

The medical examiner for the insurance company, in addition to taking the statement referred to, also made a physical examination of the applicant, and then recommended him to the insurance company as a fit subject for insurance. In doing so he relied upon the truth of Hurni's statements, as well as upon the results of his observations, in making the physical examination.

The questions involved in this case are somewhat narrowed by reason of the provisions of section 1812 of the Iowa Code of 1897, which reads as follows:

'In any case where the medical examiner, or physician acting as such, of any life insurance company or association doing business in the state shall issue a certificate of health or declare the applicant a fit subject for insurance, or so report to the company or association or its agent under the rules and regulations of such company or association, it shall be thereby estopped from setting up in defense of the action on such policy or certificate that the assured was not in the condition of health required by the policy at the time of the issuance or delivery thereof, unless the same was procured by or through the fraud or deceit of the assured.'

As construed by the Supreme Court of Iowa, the estoppel provided by this statute extends, not only to the assured's condition of health at the time the policy is issued, but relates to all matters inquired about, so far as they bear on the health and physical condition of the applicant as affecting the risk. Peterson v. Des Moines Life Association, 115 Iowa, 668, 87 N.W. 397.

Applying this statute, the question presented in this case is whether the evidence produced was such that it was the duty of the court to declare as a matter of law that the medical examiner's report was not obtained by the assured's fraud and deceit.

The particular issues disclosed by the contentions of the parties are whether these statements by the assured were material and knowingly false. These statements related to the illnesses or diseases suffered by applicant, and to consultations treatments, and prescriptions by physicians in the preceding five years. The evidence does not show the existence of any undisclosed illness or disease suffered by Hurni, unless it can be said that the colds to which he was subject were such illnesses. The existence of such colds may have been material for the medical examiner's purposes, but neither Hurni nor his physician regarded them as more than casual disturbances, and complete recovery followed each attack. His answer to these questions was only the expression of his opinion as to whether such colds amounted to disease or illness, and good faith in stating this opinion was all that was...