New York Life Ins. Co. v. Moats

• Decision Date: 04 August 1913
• Docket Number: 2,228.
• Parties: NEW YORK LIFE INS. CO. v. MOATS. [1]
• Court: U.S. Court of Appeals — Ninth Circuit

207 F. 481

NEW YORK LIFE INS. CO. v. MOATS. ^[1]

No. 2,228.

United States Court of Appeals, Ninth Circuit.

August 4, 1913

[Copyrighted Material Omitted] [Copyrighted Material Omitted]

Platt &amp Platt and Hugh Montgomery, all of Portland, Or., for plaintiff in error.

C. E. Cochran, of Portland, Or., and Geo. T. Cochran, of La Grande, Or., for defendant in error.

Before GILBERT and MORROW, Circuit Judges, and WOLVERTON, District judge.

MORROW Circuit Judge (after stating the facts as above).

The defendant denies its liability on the two insurance policies for $5,000 each, issued to the plaintiffs as beneficiaries, on the life of George S. Moats, on two grounds:

(1) It is charged in defendant's answer that at the time of making application for such insurance, George S. Moats, the insured, made false and fraudulent answers and representations to two certain questions asked him by Dr. H. L. Underwood, the medical examiner of the insurance company, such answers and representations being material to the risk, and known to be false and fraudulent by both the insured and the beneficiaries. The two questions and answers charged to have been false and fraudulent were preceded by the following general question:

'9. Have you ever had or suffered from any of the following diseases? Answer 'Yes' or 'No' to each part of this query below. (Give explicit answers and particulars in each case-- the medical examiner should satisfy himself that the applicant gives full and careful answers to this question).

"Yes' or 'No'; name of disease; No. of attacks; date; duration; severity; results.

'(First question). A. Of the brain or nervous system?

'Ans. No. * * *

'(Second question). 11. A. Have you been under the care of or consulted a physician concerning yourself for any cause within five years?

'A. Once 3 yrs. ago.

'B. If so, for what ailment; name and address of physician?

'Ans. A pain in the back. N. Molitor, La Grande.'

If either of these answers was false and fraudulent, it may be assumed that the insurance company had no knowledge of their false and fraudulent character at the time of the delivery of the policies of insurance, and that the answers were material to the risk.

(2) It is also alleged in defendant's answer that the policies of insurance were not to take effect until delivery to the applicant; that subsequent to making application for the policies of insurance on the 16th day of March, 1911, and prior to their delivery to the applicant on April 6, 1911, and pending negotiations for a contract of insurance, the applicant became insane; that the insurance company had no knowledge of any change in the physical or mental condition or health of the applicant at the time of the delivery of the policies; that a knowledge of such change in the physical or mental condition and health of the applicant was material to the risk, and had the insurance company known of such change, it would not have made, executed, and delivered its policies to the applicant.

With respect to the defendant's denial of liability on the ground of alleged false and fraudulent answers to the questions asked by the medical examiner of the company, it will be noticed that in the first general question, as to whether the applicant had suffered from certain mentioned diseases, there is the parenthetical instruction to the medical examiner that he should satisfy himself that the applicant gives full and careful answers to the questions, and in pursuance of this instruction the medical examiner is required to make an examination of the applicant and an independent report to the home office as to his physical condition, and whether the applicant has given full and true information in all respects. Such a report was made out by Dr. Underwood, the medical examiner in this case, and was transmitted to the home office of the insurance company, with the application. In this report the medical examiner was required to answer:

'Do you find after careful inquiry and physical examination, any evidence of past or present diseases (if so give full details).'

Then followed the direct and specific question (previously asked the applicant): 'Of the brain or nervous system,' to which the medical examiner replied, 'No.' Then followed a number of questions relating to certain signs and symptoms of disease, from which the skilled physician and examiner would be able to make a diagnosis of the applicant's condition of health, or lack of it. These signs and symptoms, as reported by the medical examiner, appeared to have been satisfactory. But in addition to this report in detail, the medical examiner was required to state whether there was anything about the applicant's character, residence, mode of life, or occupation, which would render the risk in any way undesirable. His answer to this question was, 'No.' He was further required to state whether he had reviewed all of the answers in his report, and also to state whether he was sure they were clear and complete. His answer to this question was, 'Yes.' He was further required to report:

'Do you believe that the applicant has given full and true information in all respects?'

His answer to this question was, 'Yes.' He was further requested to send direct to the home office of the company any information which for any reason he preferred not to embody in his report; that every endeavor should be made by the examiner to make his report as complete and precise as possible, the object being to give the home office a pen picture of the applicant as he presented himself to the examiner; and, if in addition the examiner knew of any fact or had any impression not expressed in the preceding part of his report that in his judgment would probably influence the home office in its estimate of the risk, he was required to note it under the head of 'additional remarks.' Nothing appeared in the report under that head; from which it may be inferred that the medical examiner, after having made a careful examination of the applicant, as a representative of the company skilled in the detection of disorder, found no sign or evidence of derangement of the brain or nervous system; that nothing in the appearance, speech, or manner of the applicant gave to the medical examiner any impression not before expressed in his report, or which might influence the home office in its estimate of the risk.

In other words, he had, as an expert representative of the company, and as required by his instructions, given in his report a pen picture of the applicant as he presented himself to the examiner, and this pen picture was favorable to the applicant as an insurable risk.

It was plainly upon the examination and report of this skilled expert of the company that the character of the risk was finally and mainly determined by the company, and not wholly upon the answers and representations of the applicant himself; and particularly must this be so where the inquiry relates to the brain or nervous system of the applicant, wherein a physician and skilled examiner and observer is often a better judge of the physical and mental condition of the applicant than the applicant himself. Dr. Underwood, the medical examiner, whose report we are now considering, was called as a witness in behalf of the defendant, and testified on cross-examination, among other things, that from his examination of the applicant, and the conversation which he had with him, he found nothing out of the normal. He found him a good risk so far as the examination revealed his condition. He had no ailment that the witness detected, and the witness was there as the representative of the company to find out if there was anything. The competency of this witness to so testify was not questioned.

It appears from the evidence that on March 21, 1911, or five days after George M. Moats had made application for insurance, he was admitted to a sanitarium for treatment for a nervous condition; that he remained in the sanitarium until March 27, 1911; that he returned to the sanitarium on April 11, 1911, and on April 18, 1911, was removed to an insane asylum, where he remained until May 2, 1911, when he was discharged cured; that he was again committed to the asylum on June 4, 1911, and on June 14, 1911, he died. The type of insanity which the deceased had was designated by Dr. Tamiesie, the attending physician, and a witness on behalf of the defendant, as maniacal depressive insanity. This witness was of the opinion that the deceased was insane on and prior to March 16, 1911. Dr. Nicholas Molitor, a witness for the defendant, saw the deceased on March 3, 1911, and again on March 14, 1911. He was of the opinion that the deceased was at that time suffering from neurasthenia, but would not say that it was at that time an incipient form of insanity. Dr. James W. Laughlin, a witness for the defendant, testified that he saw the deceased on March 16, 1911 (we shall see later that there is a dispute as to this date), and again on March 20, 1911; that the deceased was in a highly nervous condition, which, upon inquiry, the witness associated with a religious revival, and the witness was of the opinion that the condition of the deceased when he saw him was a form of dementia. Dr. Charles Henry Upton, a witness on behalf of the defendant, testified that he saw the deceased in the early part of the year 1911; that he complained of nervousness and sleeplessness; that the witness was of the opinion that it was a case of neurasthenia.

The witness was informed of the medical examination on March 16 1911, and was asked if there later developed a mental condition of the applicant which required him to be confined in the asylum; was it possible that such condition might have sprung up after March...