N. Am. Life Assur. Co. v. Jones

• Decision Date: 02 February 1939
• Docket Number: No. 62.,62.
• Citation: 283 N.W. 587,287 Mich. 298
• Parties: NORTH AMERICAN LIFE ASSUR. CO. v. JONES.
• Court: Michigan Supreme Court

287 Mich. 298

283 N.W. 587

NORTH AMERICAN LIFE ASSUR. CO.

v.JONES.

No. 62.

Supreme Court of Michigan.

Feb. 2, 1939.

Proceeding in equity by the North American Life Assurance Company, a Canadian corporation, against Eleanor W. Jones, as administratrix of the estate of Lawrence H. Jones, deceased, to cancel a life insurance policy covering the life of the deceased, wherein defendant, by cross-bill, sought payment of the policy. From a decree granting cancellation, defendant appeals.

Decree affirmed.

Appeal from Circuit Court, Wayne County, in Chancery; Lester S. Moll, judge.

Argued before the Entire Bench, except BUTZEL, C. J.

Atkinson, Donnelly & Lyon, of Detroit, for appellant.

Butzel, Levin & Winston, of Detroit (Chris M. Youngjohn and Morris W. Stein, both of Detroit, of counsel), for appellee.

NORTH, Justice.

After tendering repayment of premiums, plaintiff filed its bill in equity seeking the cancellation of a life insurance policy covering the life of Lawrence H. Jones, now deceased. Eleanor Jones, administratrix of estate of the insured, was made defendant. On the application of Jones dated December 6, 1935, the policy was executed December 17, 1935. In substance, the application stated that Jones did not have a regular medical advisor, that he had not been under observation or treatment in any hospital except for a tonsillectomy, that he had been last medically examined in 1933, that he had never suffered from, consulted a physician about, or had any disturbance or symptoms pertaining to the circulatory system as, for example, heart disease or weakness, shortness of breath, palpitation of the heart, pain about the heart, varicose veins, high blood pressure, etc. Plaintiff asserts, that the questions were answered falsely and with fraudulent intent to deceive; and that relying on the truthfulness of the answers the policy in question was issued. Defendant contends that there was no fraud and further, that the plaintiff did not rely upon the answers in the application because it had complete knowledge of the insured's condition and therefore is estopped from setting up the falsity of the answers. Defendant, by cross-bill, seeks payment of the policy. From a decree granting cancellation defendant has appealed.

The testimony shows that several times between August 14, 1931 and Sept. 25, 1936, Jones consulted a Doctor Maloney. On Oct. 31, 1931, the patient complained of pain over the right arm and chest which led the doctor to suspect angina pectoris and since Dr. Maloney was not a heart man, he referred Jones to a competent cardiologist, Dr. Colvin, who took an electrocardio-graph. During 1931, Dr. Maloney told the patient that he had heart trouble-that he was suffering from spasms of the coronary vessels, but after an examination on Sept. 7, 1934, the doctor told Jones that he found no evidence of pathology. Dr. Colvin took another electrocardio-graph on Sept. 8, 1934, which showed a curve within normal limits and therefore did not indicate anything abnormal. A copy of this electrocardiogram was inclosed in a letter dated Oct. 31, 1934 which was sent to plaintiff by its agent Miller.

On Sept. 25, 1934, Jones went to the University Hospital at Ann Arbor. He was in the out-patient department and returned at intervals. During his first visit he was carefully examined by Dr. Freund who found his heart normal. But a diagnosis on Nov. 12, 1935 showed a heart condition-arteriosclerotic heart disease, slight cardiac enlargement, angina pectoris. The insured, on April 16, 1936 visited an osteopathic physician and when Jones was asked “how long have you had these so called heart symptoms', replied, ‘Approximately two years.” The osteopath's diagnosis revealed an irritable heart caused by fatty degeneration. But on Oct. 24, 1936, the last time insured was treated by the osteopath, there were no chronic symptoms of heart condition. At the age of 43, coronary thrombosis caused insured's death on Oct. 25, 1936.

From this evidence it is clear that the representations and answers in the application were false. If they had been truthful the policy would not have been issued until an investigation had been made.

Defendant contends that plaintiff had knowledge of insured's physical condition and consequently the false answers are immaterial and plaintiff is estopped from asserting its reliance upon them. Before the issuance of other policies to the insured in 1933 and 1934, and the policy in suit in 1935, the plaintiff's doctor examined Mr. Jones but discovered no heart trouble. In 1934, a policy was issued in which waiver of premium and total disability benefits were asked. Plaintiff's underwriting department denied the waiver of premium benefits because of certain medical features which when explained referred to insured's history of sugar. Subsequently Mr. Jones submitted...