New England Mut. Life Ins. Co. v. Le Vey, 36.

• Decision Date: 29 August 1933
• Docket Number: No. 36.,36.
• Citation: 264 Mich. 282,249 N.W. 854
• Parties: NEW ENGLAND MUT. LIFE INS. CO. v. LE VEY.
• Court: Michigan Supreme Court

264 Mich. 282

249 N.W. 854

NEW ENGLAND MUT. LIFE INS. CO.

v.LE VEY.

No. 36.

Supreme Court of Michigan.

Aug. 29, 1933.

Appeal from Circuit Court, Wayne County, in Chancery; George W. Sample, Judge.

Bill by New England Mutual Life Insurance Company against Herbert L. Le Vey, who filed a cross-bill. From a decree for defendant, plaintiff appeals.

Affirmed.

Argued before the Entire Bench.Angell, Turner, Dyer & Meek, of Detroit, for appellant.

Casper C. Cutler, of Detroit, for appellee.

FEAD, Justice.

July 15, 1930, plaintiff issued to defendant a life insurance policy, annual premium $583, with supplemental agreements for waiver of premium and for income during total and permanent disability, premium $91.50, and double indemnity in case of death by accident, premium $17.50. The life feature of the policy has become incontestable. This bill is to cancel the supplemental agreements for alleged fraud in concealment of prior disease and medical treatment. Defendant filed a cross-bill to establish the agreements as valid and to recover installments due thereon. Defendant had decree.

Defendant took sick November, 1930, and it is conceded he became totally disabled in January. He had been treated at the University Hospital at Ann Arbor for boils from August, 1929, to June, 1930, and (time not shown) had had an operation for hemorrhoids. Neither was disclosed in his written application or medical inquiry signed by him, although he claims he told both the soliciting agent and the medical examiner of the treatments. The fact of the treatments for boils, with name of attending physician, was communicated to plaintiff before the policy was issued, through report of its agent, after further interview with defendant, but the details of the treatment, symptoms, and diagnosis did not reach the home office. The court held there was no fraud, and, if there was, plaintiff had waived it. The latter ground is decisive and has the merit of shortening the opinion.

On February 2, 1931, defendant notified plaintiff of his diability and was advised to wait four months, as required by the policy, before making proof of claim. He made the proof June 2d. In the interim and afterward, with defendant's co-operation, plaintiff conducted a thorough investigation, by inspection of the hospital records, interviews with defendant's physicians and his neighbors and otherwise. The last item of the inquiry seems to have been a supplemental report which plaintiff's state agent, Mr. Utter, wrote would follow his letter of July 21st. On request of the company, with disclosure of its desire to avoid the liability, Mr. Utter had given personal attention to the matter.

August 7th, with full knowledge of the facts, plaintiff wrote defendant denying liability for the disability because defendant had failed to disclose to the medical examiner the fact that he had been under treatment in 1929 and 1930, he was not in good health at the date of the application, and the company believed his condition represented the progress of his prior disease. Plaintiff further reserved all legal defenses and right to base its declination upon any other existing ground. It said nothing about canceling the contract.

Utter was the general state agent of plaintiff, with duty and authority to collect premiums. Defendant's second premium was due July 15, 1931, with 31 days' grace for payment. August 14th, 7 days after the company had denied liability, defendant paid at Utter's office $83.50, in cash, received credit for dividend of $109.50, and the next day executed three notes, one for $167 and two each for $166, dated July 15th and due in three, six, and nine months, respectively, representing the balance of the total...