New York Life Ins. Co. v. Griffith

• Decision Date: 29 October 1929
• Docket Number: No. 65.,65.
• Parties: NEW YORK LIFE INS. CO. v. GRIFFITH et al.
• Court: U.S. Court of Appeals — Tenth Circuit

35 F.2d 945 (1929)

NEW YORK LIFE INS. CO. v. GRIFFITH et al.

No. 65.

Circuit Court of Appeals, Tenth Circuit.

October 29, 1929.

William C. Michaels, of Kansas City, Mo. (Robert Stone, of Topeka, Kan., Louis H. Cooke, of New York City, Meservey, Michaels, Blackmar, Newkirk & Eager, of Kansas City, Mo., and Stone, McClure, Webb & Johnson, of Topeka, Kan., were with him on the brief), for appellant.

Ralph T. O'Neil, of Topeka, Kan. (J. D. M. Hamilton, of Topeka, Kan., was with him on the brief), for appellees.

Before LEWIS, COTTERAL, and PHILLIPS, Circuit Judges.

COTTERAL, Circuit Judge.

The appellant insurance company filed a bill seeking cancellation of a policy of life and disability insurance issued of date July 15, 1924, to Raymond K. Cave, the assured, and naming his mother, Stella Cave, as beneficiary. Summons was served on both defendants. She filed an answer and cross-bill, purporting to be in behalf of both defendants, in which she resisted cancellation of the policy, and prayed judgment for disability of the assured up to the time of his death on June 27, 1926, and for liability due to his death. On motion, the cross-bill was stricken by the court. The company filed an amended and supplemental bill. Later, the assured and beneficiary having both died, it was stipulated the appellee, Barton E. Griffith, administrator of both estates, be substituted as defendant, and he might plead in his answer his demands for recovery on the policy. A formal action of revivor was entered, and the administrator filed a separate answer and cross-petition for each estate.

The suit was brought within the two years during which by its terms the policy was contestable. The grounds on which the company sought to avoid liability were, first, that in the application for the insurance, which was by its terms made a part of the contract, the insurance was to be effective only if the applicant had not consulted or been treated by any physician since his medical examination, and he had consulted and been treated by Dr. F. E. Wrightman, on July 14, 1924, between the date of that examination and the delivery of the policy, whereby a condition precedent to the validity of the policy had failed; and, second, the assured made the false representations in his application that albumin and sugar had not been found in his urine, that he had not been found to have a high blood pressure, and that he had not consulted a physician or suffered from any ailment or disease of the stomach, or intestines, liver, kidneys, or bladder, whereas, as he knew, he was theretofore afflicted with nephritis, and albumin was found in his urine, and thereby the company, having a right, by the terms of the application, to rely on the representations, was induced to issue the policy, and is entitled to rescind the contract. Both these grounds of suit were explicitly denied in the answer. After a trial to the court, a decree was rendered, dismissing the original and the amended and supplemental bills, and awarding recovery to the defendant, as administrator of Raymond K. Cave, of $640, with interest, and as administrator of Stella Cave, of $3,427.50, with interest, and taxing the costs to the company.

The case was tried as an equity suit upon the issues made by bill and answer, and properly before the administrator's demands at law were heard. Liberty Oil Co. v. Condon National Bank, 260 U. S. 236, 43 S. Ct. 118, 67 L. Ed. 232; Horbach v. Coyle (C. C. A.) 2 F.(2d) 702. However, objection to the answer was waived, and there was no dispute that, if the company should fail in its suit, a recovery would follow as of course, in favor of the administrator. Such was the result in the case, and the company appeals.

It is well settled that both grounds taken to avoid the policy are valid defenses. The controversy is whether they are sustained in fact by the evidence.

In support of the first ground, the company introduced a prescription of potassium iodide given by Dr. Wrightman, purporting to be for the assured, bearing the doctor's initials, filled July 14, 1924. He could not say whether he saw the assured personally, or the prescription was given to his father. The father, O. M. Cave, testified he was treated by the doctor in the summer of 1924, and the prescription was given for him supposedly for a cold, that the assured both obtained it and was sent to have it filled, that the first time assured consulted Dr. Wrightman was on September 28, or 29, 1924. The assured testified by deposition when ill on June 24, 1926, that he never consulted or was treated by any other than the company's doctor before delivery of the policy.

While, on appeal in an equity suit, the evidence is reviewed de novo, the findings of a chancellor are presumptively correct and should be accepted, unless a serious mistake has been made in the consideration of the evidence. Fienup v. Kleiman (C. C. A.) 5 F. (2d) 137; Larson v. Crowther (C. C. A.) 26 F.(2d) 780; Unkle v. Wills (C. C. A.) 281 F. 29. The finding for the administrator was well justified, and in view of its weight in this court, it is approved. There was a failure to sustain the first ground of attack on the policy.

The second ground, based on the alleged false representations, is more serious. Concededly the assured and his mother both died of nephritis, the former on June 27, 1926, and the latter on February 11, 1928. Dr. Wrightman testified to treating the assured in September, 1924. Drs. Shafter and Keith testified by deposition to a diagnosis of his ailment as chronic glomerular nephritis, at the Mayo Clinic, in Rochester, Minnesota, on February 9, 1925. The former recorded his history and the latter the consultation notes of the case, from which it appeared he had some retinal disease and high blood pressure, he stated he had had pneumonia, influenza in 1918, and other ailments, albumin had been found in his urine over two years, and he had been on a low protein diet. These witnesses depended on their record, without a personal recollection of the consultation. Dr. Keith in particular may not have been present when all the questions were asked of the assured, and "he was just one of thousands coming through the clinic."

Dr. Good's affidavit was read as his deposition, relating to assured's admission to the...