Old Colony Life Insurance Company v. Julian

• Decision Date: 07 November 1927
• Docket Number: 310
• Citation: 299 S.W. 366,175 Ark. 359
• Parties: OLD COLONY LIFE INSURANCE COMPANY v. JULIAN
• Court: Arkansas Supreme Court

299 S.W. 366

175 Ark. 359

OLD COLONY LIFE INSURANCE COMPANY v. JULIAN

No. 310

Supreme Court of Arkansas

November 7, 1927

Appeal from Craighead Chancery Court, Western District; J. M Futrell, Chancellor; affirmed.

Judgment affirmed.

McKinley & Price and Gautney & Dudley, for appellant.

Basil Baker, for appellee.

OPINION

MCHANEY, J.

On February 16, 1923, appellee, Orby Julian, made application to appellant for a policy of life insurance, in which his mother, the appellee, Annie Julian, was to be named as beneficiary. The application consists of two parts: Part 1 being the questions and answers made at the time the agents, Webb and Neustadter, took his application; and part 2, being the questions and answers thereto given to the medical examiner, which is dated February 20, 1923. Under date of February 28, 1923, the medical examiner, who had filled out part 2 of the application, made a confidential report to the company, in which he answered all the questions called for in the confidential report, in which he stated that no other person was present at the examination except himself and the applicant. Also in this confidential report he stated that the age of the applicant as given by him was 28, but that his apparent age was 25, and stated that he had the general appearance of a healthy person, of normal gait, without defects or deformities, without impairment of sight or hearing, or disease of skin, bones or joints. Question 31 in this report is as follows: "Q. Do you see in the appearance, manner, occupation, residence, mode or station of life of the person examined, anything which would render him in any way undesirable as a risk, or make the proposal of insurance one of speculation or over-insurance?" His answer to that question was "No." In part 2 of the application, consisting of answers made to the medical examiner, the applicant was asked if he had had any of the list of ailments therein stated, running through the alphabet from albumin in the urine to varicose veins, and consisting of about sixty-five diseases, influenza not being one of the diseases called for, and he answered "None." Question 22 of said part 2 is as follows: "Name all ailments, physical injuries and surgical operations said person has had in the last ten years, giving the names of all persons who attended said person in connection therewith, together with date and address." He answered "None." As a matter of fact this answer was untrue, for, in the year 1918, he had had a serious case of influenza, and had been treated by two physicians in Jonesboro. This fact is undisputed.

It appeared in evidence, on a trial of the case, that appellee, Annie Julian, and her son, C. L. Julian, who is a brother of appellee, Orby Julian, were both present at the time part 2 of the application was filled out by the examining physician, Dr. Hartwig, who himself admitted that the mother was present, but did not remember the brother being present, although he had stated in his confidential report that no other person was present. Both the mother and her son, C. L., testified that the examining physician was told, in answer to question 22, as above set out, regarding the serious case of influenza the applicant, Orby Julian, had had in 1918, but that he stated it was not necessary to mention same in answer to said question, for the reason that it was not included in the list of diseases above mentioned, set out under question 20.

It was also provided, in part 1 of the application, that the applicant agreed that there should be no contract unless the policy was delivered to and accepted by the applicant while in good health, and it is further set out therein that "all statements and answers written in this application, marked part 1, as well as those made and to be made to the medical examiner in continuation hereof, marked part 2, are true and complete; that no material information or facts have been omitted therefrom, and that the same are offered to the company as a consideration for said insurance and any other or additional insurance for which policies may be issued by the company on this application." The application, medical examination and confidential report were thereafter mailed to the insurance company, on which it issued two policies for $ 1,000 each, both dated March 13, 1923, and both were delivered to the insured June 11, 1923.

The policies contained the following provisions:

"Waiver of Premiums. The company will waive the payment of all premiums becoming due hereon after expiration of six months from the date of receipt by the company of satisfactory proof that the insured has become totally and permanently disabled, as hereinafter defined, if such proof is received before the insured has attained the age of sixty years and if all premiums becoming due hereon from the beginning of this insurance to the expiration of the aforesaid six months have been duly paid. The payment so waived by the company will not be charged as an indebtedness against the insured or this policy, which will continue in full force towards maturity, with loan, cash and other guaranteed values increasing and progressing from year to year, in like manner as if the premiums were being duly and regularly paid by the insured.

"Disability Annuity. If such proof is received by the company before the insured has attained the a aforesaid age and premium payments have been waived as herein provided, the company will, one year after the receipt of such proof, begin to pay the insured a disability annuity of one-tenth of the face amount hereof, and will make such annuity payments annually on the anniversary of the first payment until the maturity of the policy, without charging any such payments as an indebtedness against the insured or this policy.

"Miscellaneous Conditions. The total and permanent disability of the insured herein referred to must be due to bodily injuries or disease occurring while this policy and this provision are in full force, and must be such as to prevent the insured then and at all times thereafter from performing any work or conducting any business for compensation or profit; provided that, notwithstanding proof of disability may have been accepted by the company as satisfactory, the company shall, at any time, on demand, be furnished satisfactory proof of the continuance of such disability; and if such proof is not furnished, or if it shall appear to the company that the insured is able to perform any work or to conduct any business for compensation or profit, no further premium payments shall be waived nor annuity payments made. In no event will premium payments be waived, or annuity payments made, except during total and permanent disability of the insured, as herein provided. Military or naval service in time of war is a risk not assumed by the company under any of the foregoing disability provisions.

In the latter part of June, or the early part of July, 1923, Orby Julian, the insured, became insane. Appellant's agents were notified of this condition, and, on March 19, 1924, Mrs. Pearl Turner, sister of the insured, wrote a letter to the appellant, inclosing a statement from the physician, regarding the condition of her brother; and again, on June 3, she communicated with appellant relative thereto, but received no reply to either of these letters.

On September 24, 1924, appellant filed suit in the Craighead Chancery Court, Western District, in which it sought to cancel the policies in question, on the ground that the insured had fraudulently concealed material facts from the company in the answers to the questions in the application heretofore referred to, and in accepting...