Pannunzio v. Monumental Life Ins. Co., 35421

• Citation: 168 Ohio St. 95,151 N.E.2d 545
• Decision Date: 11 June 1958
• Docket Number: No. 35421,35421
• Parties: , 5 O.O.2d 356 PANNUNZIO, Appellee, v. MONUMENTAL LIFE INS. CO., Appellant.
• Court: Ohio Supreme Court

Page 95

168 Ohio St. 95

151 N.E.2d 545, 5 O.O.2d 356

PANNUNZIO, Appellee, v. MONUMENTAL LIFE INS. CO., Appellant.

No. 35421.

Supreme Court of Ohio.

June 11, 1958.

Syllabus by the Court

1. Under the provisions of Section 3911.04, Revised Code, every life insurance company doing business in this state shall return, with and as a part of any policy issued by it,

to any person taking such policy a complete copy of each application or other document held by it which is intended in any manner to affect the force and validity of such policy, and a company which fails or neglects to do so is estopped from denying the truth of any such application or document. Acacia Mutual Life Ins. Co. v. Weissman, 164 Ohio St. 82, 128 N.E.2d 34, approved and followed.

2. Conditions embodied in a life insurance policy to the effect, among other things, that, if within two years before the issuance of the

policy the insured had been attended by a physician, the policy shall be voidable by the insurer, unless it is shown by the insured or the claimant that the affliction for which medical treatment was had did not actually contribute to the insured's death or disability, are valid conditions on which the insurer may rely to avoid the policy but against which the claim of estoppel may properly be raised.

3. Where a life insurance policy contains the above-described conditions, knowledge acquired, prior to the issuance of the policy, by an agent of the insurer who is authorized by his principal to solicit applications for insurance, fill in the applications, deliver the policies and collect the premiums thereon, that the insured was then suffering from a heart affliction and was under the care of a physician, is imputable to the insurer, and, in the absence of fraud or collusion on the part of the insured, the insurer is thereby estopped from successfully relying on such conditions to void the policy, in an action on the policy after the death of the insured.

4. In an action to recover on a life insurance policy in which the insurer denies liability on the ground that the insured had been under treatment by a physician for a serious physical ailment within two years before the issuance of the policy, and the plaintiff-beneficiary claims that information of such facts was imparted to the insurer's agent at the time he solicited the insurance risk and made out the application for the policy, the issue as to whether the agent was informed of such treatment and ailment is usually a question of fact for determination by a jury.

The present action arose in the Court of Common Pleas of Mahoning County when Louis Pannunzio, the beneficiary under a weekly-premium-payment life insurance policy, sued the Monumental Life Insurance Company, the insurer, to recover $1,000, representing the face amount of the policy. The policy was issued under date of August 20, 1955, on the life of Ruth Pannunzio, wife of the beneficiary. The required weekly premiums were paid, and the insured died on January 2, 1956. On the death certificate the cause of death was given as 'rheumatic heart disease and aortic valvulitis, mitral grade.'

In its answer to the petition the insurer admits the existence of the insurance policy sued on and, to escape liability, relies on those provisions of the policy which accord the insurer the right to void it within one year of its issuance for stated reasons. It is asserted that some of those reasons existed; that the insurer voided the policy on those grounds; that it has tendered to the plaintiff the premiums paid; and that, upon his refusal to accept them, it deposited the same with the clerk of courts of Mahoning County.

The reply, after a general denial, asserts that the agent of the insurer was fully informed as to the physical condition of the insured when the application for the insurance policy was solicited and executed, and that therefore the insurer knew or should have known those facts before it issued the policy.

Upon trial before the court and a jury, a verdict was returned for the plaintiff for the face amount of the policy, with interest. A motion for judgment notwithstanding the verdict was overruled, and judgment was entered on the verdict.

An appeal on questions of law to the Court of Appeals resulted in an affirmance of the judgment below, and the cause is now before this court for decision pursuant to the allowance of a motion to require the Court of Appeals to certify the record.

Morris Mendelssohn, Youngstown, for appellee.

Hammond & Hammond, Youngstown, for appellant.

ZIMMERMAN, Judge.

The agent who solicited the insurance policy in issue was a long-time employee of the insurer. His duties were to sell insurance within the territory assigned to him, collect premiums and service debits and accounts. He described himself as 'an insurance representative.'

At the trial, plaintiff, a filling station attendant, gave substantially the following account concerning the solicitation and delivery of the policy:

On August 8, 1955, the insurer's agent came to plaintiff's place of work and solicited first his employer and then him to purchase insurance. Plaintiff told the agent that he had enough insurance, whereupon the agent said, 'I have a special insurance policy and let me sell you an insurance policy for your wife.' In reply plaintiff stated, 'My wife has a rheumatic heart condition, you can't sell me a policy for her.' The agent was also informed that the wife was under a doctor's care. Nevertheless, he persisted and finally handed plaintiff a blank application form and told him to have his wife sign it at the place marked with an 'X.' Further, the agent directed plaintiff to write on a separate sheet of paper his wife's name, age, address and medical history and stated that he, the agent, would then fill in the application. Plaintiff testified also that the agent said, 'Don't worry * * * I will fill it in and then send it to the company and in the meantime I will have the physician come up there.' The physician never came.

When the agent delivered the policy and was paid the initial premium of $5, there was no copy of the application attached to the policy, and the insurer concedes this. Plaintiff testified also that he never saw the application after he handed it to the agent, signed by his wife in blank.

A customer at the filling station, who was there using facilities of the station in placing tires on his automobile, testified that he overheard a part of the conversation between plaintiff and the agent. According to this witness, plaintiff advised the agent that plaintiff's wife had a heart condition and was being treated by a physician, and the agent answered, 'Well, we would not worry about that, we will take care of that and everything; this is a new policy that we have which will cover this and will cover her.' The witness asserted also that he saw the agent hand plaintiff some papers, saw him mark a spot and heard him say, 'You take this home and have your wife sign and bring it back, and don't worry about the rest.'

The application, which was introduced in evidence and made an exhibit, contains no reference to the heart ailment with which the insured was afflicted. It is only fair to say that the agent categoricall denied the material parts of plaintiff's testimony and that of his corroborating witness, and stated that neither the plaintiff nor the insured, whom he claimed to have interviewed personally, made disclosure as to the insured's heart affliction.

This case is simplified somewhat by the following statement contained in the insurer's brief:

'For the sake of argument, we will concede the following matters; they are not at issue in this appeal--beneficiary gave agent true answers concerning rheumatic heart disease suffered by insured and treatments by Dr. Rirestone; agent, without collusion on the part of either beneficiary or insured, fraudulently filled out the application with answers which were not true and did not reflect the true health of insured; in soliciting the insurance and filling in the application, agent, as a soliciting agent, was an agent of the company and not of insured.'

In asking for a reversal of the judgment of the Court of Appeals and for final judgment in its favor, the insurer relies wholly on provisions of the policy, which it claims are conditions precedent to the effectiveness of the policy and which the knowledge and actions of its agent did not estop it from asserting in voiding the policy. Such provisions are:

'Incontestability. This policy shall be incontestable after it has been in force, during the lifetime of the insured, for one year from its date of issue, except for nonpayment of premiums.

'When voidable. If (1) within two years prior to the date of issue of this policy the insured has been a patient at, or an inmate of, any institution for the treatment of physical or mental disease, or has undergone any surgical operation, or has been attended by a physician; or if (2) prior to such date of issue the insured has been rejected for life insurance by this or any other insurer, if shown by the company that knowledge of such rejection would have led to a refusal by the company to issue this policy; then, in any such case, this policy shall, subject to the above incontestable clause, be voidable by the company, unless it shall be shown by the insured or any claimant that no such rejection, institutional, surgical, or medical treatment or attention was for a disease, injury, or physical or mental condition which actually contributed to the insured's death or disability as defined herein, or unless reference to such institutional, surgical, or medical treatment or attention, or such prior rejection, is endorsed on this policy by the company; provided, however, that this policy shall not be voidable because of the absence of an endorsement referring to any information which was disclosed in a written application for this policy....