Pacific Mut. Life Ins. Co. v. Hayes

• Decision Date: 07 June 1917
• Docket Number: 8 Div. 938
• Citation: 200 Ala. 246,76 So. 12
• Parties: PACIFIC MUT. LIFE INS. CO. v. HAYES.
• Court: Alabama Supreme Court

76 So. 12

200 Ala. 246

PACIFIC MUT. LIFE INS. CO. v. HAYES.

8 Div. 938

Supreme Court of Alabama

June 7, 1917

Rehearing Denied June 28, 1917

Appeal from Law and Equity Court, Morgan County; Thomas W. Wert Judge.

Action by Mrs. E.M. Hayes against the Pacific Mutual Life Insurance Company. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

Plea 3 alleged: That insured, Arthur J. Maynor, failed to pay the premium which said policy stipulated he should pay September 7, 1913, or else said policy should become lapsed and void unless the same should be reinstated by Arthur J Maynor's warranty of good health and condition. That after said policy lapsed and became void, he, said Maynor, to procure reinstatement of said insurance, executed the following warranty of present health and condition, which is as follows:

Arthur J. Maynor of New Decatur, Ala., to whom policy No 244486 was issued by the Pacific Mutual Life Insurance Company of California, a premium on which was due on September 7, 1913, hereby warrants that he is at this time in all respects in good, sound, and unimpaired health and condition; that he has not within one year prior to the date hereof consulted any physician, surgeon, or other practitioner respecting his mental health or condition; and that it is the insured's understanding that said company accepts at this time payment of said premium, and issues its receipt therefor solely in consideration of the warranties herein made.

And defendant avers that said warranty was breached, and thereby the policy rendered void in this: That the said Arthur Maynor was at the time he signed said warranty afflicted with heart disease, from which he soon thereafter died. And with respect to the premium paid, in connection with said warranty of present health and condition, to procure a reinstatement of said policy, defendant tendered to plaintiff the amount due to her, to wit, $23.02, before this action was commenced, and now brings the money into court.

The other pleas are 4, 5, 7, 8, 9, and 11; and they adopt the averments of plea 3, except as to the breach of warranty, and that is practically the same, merely changing the character of the disease. The other pleas and replications, together with their rejoinders, sufficiently appear. The health certificate appears in plea 3. The following charges were refused to defendant:

(6) The court charges the jury that although Maynor may not have known that he had heart disease when he signed the warranty of present good health and condition, yet if he did know if he was sick, and if he knew that he recently, or since his original examination for insurance, advised with or consulted a physician with respect to his health, and if he did know that he was really sick when he consulted said physician, the court charges the jury that it was his duty to have correctly stated that he did consult a physician, and if he failed so to do his failure was a misrepresentation and concealment of a matter tending to increase the risk of loss, and the verdict must be for defendant.

(29) If the jury find from the evidence that said Maynor did not pay said premium on the day that it was stipulated that it should be paid, as set out in replication 2, and if they believed further from the evidence that said Maynor executed the alleged warranty as set out in replication 2, and if they further believe from the evidence that he tendered to defendant the premium due on said policy, and that defendant accepted said premium, and if they further believe from the evidence that said Maynor was then sick and knew that he was sick, or knew that he had consulted or advised with a physician, and if defendant did not know that he was sick, and did not know he had consulted and advised with a physician, then the verdict must be for defendant, and you cannot find for plaintiff on replication 2.

E.W. Godbey, of Decatur, for appellant.

W.T. Lowe and Callahan & Harris, all of Decatur, for appellee.

This cause was submitted and considered under rule 46; the opinion of the court being delivered by Mr. Justice THOMAS.

It is not necessary that we indulge in a detailed discussion of the many assignments of error. The suit, which was on a policy of life insurance, was in the Code form. Code, vol. 2, p. 1196, form 12; Pence v. Mut. Ben. L. Ins. Co., 180 Ala. 583, 61 So. 817; Patterson v. Grand Lodge, 162 Ala. 430, 50 So. 377.

Demurrers to pleas 3, 4, 5, 7, 8, 9, and 11 were properly sustained on the authority of Massachusetts Mutual Life Insurance Co. v. Crenshaw, 195 Ala. 263, 70 So. 768; s.c., 186 Ala. 460, 65 So. 65; Code, § 4572.

Pleas 2 and 6 were to the effect that, by reason of a failure to pay the agreed premium according to contract stipulations, there was a lapse of the policy.

Plea 9a set out the policy conditions as to the payment of premiums, averred a default, and, in consequence thereof, a lapse of the policy, and averred assured's application for a restoration to benefit thereunder, which, by reason of previous policy requirements, became a part thereof, and assured's warranty that he had not, between the time of the last application, and that for restoring said policy consulted a physician. This warranty, it is averred, was untrue, because assured was then suffering from a serious affection of the heart, which was discovered by said physician so consulted; and it is alleged that this misrepresentation "was as to a matter warranted and guaranteed by the said Maynor [the assured] to be true, and was as to a matter that increased the risk of loss." This plea was held free from demurrer, though it may have been subject to the infirmity pointed out in Crenshaw's Case, supra.

In substance plea 10 averred, among other things, that the said Maynor "falsely and fraudulently represented to this defendant that his health was good," that at the time of said false representation the said Arthur J. Maynor knew that said representation was false and made the same with the intent to deceive defendant, and did so deceive it and induce it "to execute the contract here sued on." Thus plea 10 complied with the law announced in Massachusetts Mutual Life Insurance Co. v. Crenshaw, supra.

Plea B was:

"The defendant avers that the insured failed to pay the quarterly premium due September 7, 1913, when it became due, or within 30 days thereafter, whereby the said policy lapsed and became void; that the insurant was the young, unmarried son of the plaintiff, and a member of her household; that she had prevailed upon him to transfer and assign to her the said policy of insurance; that after the said policy had lapsed, the insured was diseased, and became the subject of medical attendance and attention on the part of Dr. W.H. Watson, a physician; that after the said policy lapsed, the plaintiff became aware of insurant's critical condition, and of the medical attendance aforesaid; that after such medical attendance, she undertook to pay up the aforesaid premium; that in doing so, she fraudulently suppressed the fact of insurant's illness, and the previous medical attendance; that defendant did not know, at the time of accepting said premium, and allowing said policy to become ostensibly reinstated, of insurant's illness, or said medical attention, and had it known thereof, it would not have accepted said premium, and would not have effected a restoration of the lapsed policy; that the defendant did not know of the disease and medical attention until after insurant's death, when it announced to plaintiff its rescission of said policy contract, and undertook to return to plaintiff the said premium, which she refused, and that on the filing of the original pleas in this cause, the same was brought into court, and is here now tendered to the plaintiff."

By replications 8 and 9 plaintiff sought to make full answer to pleas 9a and 10, the effect of the replications being that plaintiff had full knowledge of the facts that:

"The said statement had already been prepared by the defendant in advance, and all the statements and warranties therein contained had been inserted therein by the defendant in advance and without consultation or information from Arthur Hayes. And plaintiff avers that the said Penney called by the house of Arthur Hayes early in the morning, about 7 o'clock, and when said statement was presented to him, stated in response to an inquiry from Arthur Hayes that the premium on said policy had not been paid until several days after it was due, and the signature of the paper or statement was a mere matter of form in order to reinstate the policy of insurance. And relying on such statement of said Penney, who at that time was apparently in a hurry, the said Arthur Hayes signed said statement without reading the same, or having the same read over to him, or without otherwise knowing that there was any such representation therein as that he had not consulted a physician, within one year prior to the date thereof, respecting his mental and physical health or condition."

To these replications defendant rejoined:

"That the plaintiff ought not to profit by the matters and things set forth in said replication, for the reason that she herself was the owner of said policy by assignment from her son, the insurant, who was an inmate of her household prior to the date of said certificate of good health, etc., and knew the matters and things rendering said certificate false, and on or about the 24th day of October, 1913, she received from the defendant's state agents a letter as follows, relating to policy sued on, viz.: 'Tuscaloosa, Ala., 10/23/13. Mr. E.M. Hayes, 1302 4th Ave., New Decatur, Ala., No. 244486, Maynor,

A.J. Dear Madam: Replying to your notation on our notice of the 20th inst., bed [meani

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