Preferred Life Assur. Soc. v. Thompson

• Decision Date: 28 May 1934
• Docket Number: 31239
• Court: Mississippi Supreme Court
• Parties: PREFERRED LIFE ASSUR. SOC. v. THOMPSON

155 So. 188

170 Miss. 575

PREFERRED LIFE ASSUR. SOC. v. THOMPSON

No. 31239

Supreme Court of Mississippi

May 28, 1934

Division B

1 INSURANCE.

Where applicant was physician, and knew that medical examiner knew that he was not insurable risk, and that, if correct answers were given, policy would not be issued, and medical examiner made false answers in application and applicant anticipated that examiner would act in applicant's interest against insurer, examiner held not agent of insurer so as to render insurer liable on policy, regardless of examiner's misrepresentations.

2 INSURANCE.

Medical examiner cannot be agent of insurer for purpose of defrauding insurer.

HON THOS. E. PEGRAM, Judge

APPEAL from circuit court of Calhoun county HON. THOS. E. PEGRAM, Judge.

Action by Florence B. Thompson against the Preferred Life Assurance Society. From a judgment for plaintiff, defendant appeals. Reversed and dismissed.

Reversed and dismissed.

Stovall & Stovall, of Okolona, and Hill, Hill, Whiting, Thomas & Rives, of Montgomery, Alabama, for appellant.

The appellant being a fraternal benefit society, its rights and duties and those of appellee are governed by article 14, chapter 127, Mississippi Code of 1930, entitled "Fraternal Societies."

Knights of Maccabees of the World v. Coleman, 128 Miss. 854, 91 So. 561; Columbian Mutual Life Assurance Society v. Harrington, 104 So. 297.

Knowledge of the physical condition of an applicant for insurance with a fraternal benefit society known to the medical examiner and not transmitted to the principal does not constitute a waiver of any misrepresentations by the applicant, or estop the company from pleading same in an action on the policy, because the common-law rule is restricted by section 5249, Code of 1930.

New York Life Ins. Co. v. Smith, 129 Miss. 544, 91 So. 456.

It is a generally accepted rule that a misrepresentation of a material fact by an applicant in his application for life insurance where the policy to be issued is based on the truthfulness of the statements made therein will avoid the policy based thereon.

Williams v. N. Y. Life Ins. Co., 96 So. 97; Keeton v. Jefferson Standard Life Ins. Co., 5 F.2d 183; Mutual Life Ins. Co. of N. Y. v. L. Hilton-Green, Ex. Estate of C. L. Wiggins, dec., 60 L.Ed. 1202; Aetna Life Ins. Co. v. Moore, 231 U.S. 543, 58 L.Ed. 356.

It is a valid stipulation in an application and policy of insurance that its provisions could not be varied by notice nor representations not brought home to the actual knowledge of the company's principal officers and that no waiver was authorized by any other agent.

N. Y. Life Ins. Co. v. Odom, 56 So. 379; John Hancock Mutual Life Ins. Co. v. Luzio, 176 N.E. 446.

Insurer is not bound by statements contained in an application when not only the agent but the insured knows they are untrue, and are calculated to deceive, and that the application is to be forwarded to the insurer to be acted on by it.

Mutual Life Ins. Co. of N. Y. v. L. Hilton-Green, Ex. Estate of C. L. Wiggins, dec., 60 L.Ed. 1202; N. Y. Life Ins. Co. v. Fletcher, 29 L.Ed. 934; John Hancock Mutual Life Ins. Co. v. Luzio, 176 N.E. 446; Aetna Life Ins. Co. v. Moore, 231 U.S. 543, 58 L.Ed. 356; Bankers Life Co. v. Dixon, 24 F.2d 241; Keeton v. Jefferson Standard Life Ins. Co., 5 F.2d 183; American Central Life Ins. Co. v. First National Bank of Interprise, 90 So. 294; Mutual Life Ins. Co. of N. Y. v. Powell, 217 F. 565.

The rule charging the principal with his agent's knowledge is established for the protection of those who deal with the agent in good faith. If, therefore, the third person acts in collusion with the agent to defraud the principal, the latter will not be chargeable with any information which the agent receives pertaining to the transaction.

2 C. J., par. 550, page 871; Continental Mutual Life Association v. Parham, 80 Tex. 518, 16 S.W. 316; Elliot v. Knights of Modern Maccabees, 46 Wash. 320, 89 P. 929; Benedict v. Arnous, 154 N.Y. 715, 728, 49 N.E. 326.

Patterson & Patterson, of Calhoun City, for appellee.

The appellant's rights and privileges as well as the rights and privileges of the appellee are governed by article 14, chapter 127, Mississippi Code of 1930.

The presumption of knowledge of the by-laws of a fraternal beneficiary society does not arise against an applicant for membership, he being at the time of the application a stranger to the by-laws.

Modern Woodmen of America v. Head, 96 So. 219; American Equitable Assurance Co. v. Powderly Coal & Lbr. Co., 142 So. 37.

Medical examiner of a life insurance company is the agent of the company, although he is paid by the insured for the examination, and notwithstanding a recital in the application or policy that he shall be regarded as the agent of insured.

37 C. J. 378; 14 R. C. L. 1167, sec. 347 and page 1161, sec. 343.

Knowledge of medical examiner is knowledge of insurer.

N. Y. Life Ins. Co. v. Smith, 129 Miss. 544, 91 So. 456; Ogletree case, 77 Miss. 7, 25 So. 869; Grand Lodge of K. P. v. James, 100 Miss. 467, 56 So. 458.

A corporation, society or individual cannot repeal the law of estoppel.

Fraternal Aid Union v. Whitehead, 125 Miss. 153, 87 So. 453, 88 So. 274.

In order to establish fraud the evidence must be clear and satisfactory.

12 R. C. L., pages 436 and 437, sec. 183; National Life & Accident Ins. Co. v. Baker, 147 So. 427.

In absence of insured's knowledge that agent did not write into application information which insured gave agent, insured had a right to assume agent acted honestly with principal.

American Life Ins. Co. v. Buntyn, 148 So. 617.

Fraud must always be distinctly proved.

Tuteur v. Chase et al., 66 Miss. 476, 6 So. 241.

OPINION

Griffith, J.

The insured, Dr. F. E. Thompson, at the time of the application for the policy of insurance involved in this case, was suffering from chronic dilation of the heart due to valvular obstruction. He was well aware of this fact and that the disease was of such character that he was liable to die of it at any time, and he did die of the disease a short time after the issuance of the policy. Only the day before the application he had been thoroughly examined by a physician, expert on this disorder, and had been informed of its exact nature and imminent danger. But in part 1 of his application for the insurance he stated over his signature that he was in good health and free from any and all diseases, ailments, or afflictions; and in part 2 of the application he...