New York Life Ins. Co. v. Kuhlenschmidt
| Decision Date | 17 December 1937 |
| Docket Number | 26964. |
| Citation | 11 N.E.2d 673,213 Ind. 212 |
| Parties | NEW YORK LIFE INS. CO. v. KUHLENSCHMIDT. |
| Court | Indiana Supreme Court |
Appeal from Vanderburgh Circuit Court; John W Spencer, judge.
Louis H. Cooke, of New York City, Daniel H. Ortmeyer, of Evansville, and Gavin & Gavin, of Indianapolis, for appellant.
John W. Spencer, Wm. F. Little, and W. C. Clippinger, all of Evansville, for appellee.
This is an action by appellee, the sole beneficiary of a life insurance policy issued by appellant upon the life of appellee's husband. Appellant sought to avoid liability on the ground that the insured had made false and fraudulent statements as to his health, and as to consultations with doctors concerning ailments and diseases, in his application for the insurance; and, by cross-complaint, prayed the cancellation of the policy on the ground of fraud, based upon the false statements in his application. The cause was tried by the court without a jury. There were special findings of fact and conclusions of law, and judgment for appellee.
Error is assigned upon the overruling of a motion for a new trial and upon the conclusions of law.
The application for the insurance was made on April 24, 1930. The application contained the following questions and answers The insured had consulted a physician on the 17th and 19th days of July, 1929, and on the 26th day of July, 1929, relative to a pain in the region of his kidneys. The physician, believing that the insured suffered from a kidney stone, referred him to a specialist. On July 19, 1929, he consulted a specialist, giving a history of his illness; that it had begun a month before with pain in the region of the left kidney, which grew in frequency; that he had lost ten pounds in weight in six weeks. The specialist made an examination, including a cystoscopic examination of the urinary tract, dilation of the ureters, and the insertion of medicine into the kidneys and bladder. The specialist diagnosed the trouble as probably a stone in the ureter. He was again consulted on July 24th and August 2d, and the insured reported that he had passed a stone. The specialist testified that these stones are believed to be due to focal infection somewhere in the body, usually above the neck, plus lack of drainage in the urinary tract, plus lack of fluids; that the same condition may or may not produce other stones; and that he could not tell whether there is a tendency toward recurrence.
The policy was delivered to the insured on April 28, 1930. He died on June 18, 1931. His death was due to mitral stenosis, with endocarditis as a secondary cause. Officers and agents of appellant, whose duty it was to pass upon the application, testified that they relied upon the statements of the insured in approving the application, and that they would not have approved the application if the facts concerning the consultations with the doctors and the treatment for the ailment of the kidneys had been disclosed; that, if the kidney ailment had been known, the application would have been disapproved and a further investigation made for the purpose of determining whether the company 'could offer substandard insurance.'
Appellant contends that the false statements made in the application concerning the ailment or disease of the kidneys, and the consultations with physicians, were sufficient to constitute a cause for rescission of the contract of insurance; and that:
Appellee contends that, under subdivision (5) of section 39-801, Burns' Ann.St.1933, section 9723, Baldwin's Ind.St.1934, which provides: 'That all statements made by the insured in the application shall, in the absence of fraud, be deemed representations and not warranties,' representations need only be substantially true, and that, 'whether an applicant's answer to a question as to whether he had consulted a physician for disease of the kidneys was false, or substantially true, will depend upon whether the ailment of the kidney for which he consulted a physician seriously affected the general soundness and healthfulness of his system.'
It would seem to be obvious that questions in an application for life insurance, which deal with the past health of the applicant, are intended to elicit information from which the company may determine whether or not to assume the risk and issue the policy, and that a deliberate false answer that the applicant had never consulted a physician concerning, or suffered from, any ailment or disease of the kidneys or bladder, and the false answer that he had never consulted any physician within five years, other than those named in the application, when, in fact, within a year he had consulted two physicians, one a specialist, and submitted to severe exploratory examinations, resulting in a diagnosis afterwards confirmed, for a severe and painful ailment, are sufficient in themselves to establish fraud, which would make the statements warranties, and not representations, under the statute. It is inconceivable that the false answers could be accounted for by mistake or inadvertence, or misunderstanding of the plain, simple questions, or forgetfulness of such a...
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