Prudential Ins. Co. of Am. v. Ashe
| Decision Date | 04 April 1934 |
| Docket Number | No. 107.,107. |
| Citation | 266 Mich. 667,254 N.W. 243 |
| Parties | PRUDENTIAL INS. CO. OF AMERICA v. ASHE et ux. |
| Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Ingham County, in Chancery; Charges B. Collingwood, Judge.
Suit by the Prudential Insurance Company of America against Vivan M. Ashe and wife. Decree for defendants, and plaintiff appeals.
Reversed and remanded.
Argued before the Entire Bench.
Emmons, Oren & Sleeper, of Detroit (Donald McGraffey, of Detroit, of counsel), for appellant.
Pierce & Planck, of Lansing, for appellees.
Plaintiff filed a bill in chancery to cancel an insurance policy on the life of defendant and to restrain a suit at law commended by defendant as against plaintiff for the collection of sick benefits under said insurance policy.
The policy was issued in 1928, lapsed, was reinstated, and lapsed again. An agent of the insurance company called upon the defendant during the latter part of February or the early part of March, 1932, for the purpose of having defendant reinstate his policy, and defendant promised to do so as soon as he could get the money. On April 13, 1932, and at the request of defendant, the agent again called at the home of defendant about supper time and when defendant was in a hurry to go to work. Defendant did not have time to talk to the agent about the policy, but was told that all he needed was his signature to the application and the money to reinstate the same. The answers to certain material questions were filed in by the agent either before the application was signed or later, but without the knowledge of the defendant. On the basis of these statements in the application, the plaintiff company reinstated the policy.
The answers to the questions in the application for reinstatement stated that defendant was in good health and had had no illness or medical treatment since the date of issue of the policy. The record shows that in 1918 defendant had bronchial asthma; in 1922 he complained of being short of breath; in 1925 he had pleurisy and was in bed twelve days; in 1927 he was operated upon for a rectal abscess. In 1930 he was operated upon for appendicitis, and about that time an X-ray disclosed an early parenchymal type of tuberculosis in the upper right lung with lesions fairly well arrested. In August, 1930, defendant was again treated for pleurisy. In February, 1932, he was treated for inflammation of the lumber region. On the 15th and 26th of March and the 25th of April he was treated for a fistula. On August 4, 1932, his case was diagnosed as tuberculosis.
The record also discloses that when the application for reinstatement was being made out, the agent asked defendant if he was in good health and defendant replied that he was in good health so far as he knew except for a lingering cold.
The question involved in this case is: Was the defendant's statement that he was in good health such a misrepresentation of fact as would void the reinstatement of the policy? Under the view we take of the case, it will not be necessary to consider whether defendant is bound by the answers to the other questions filled in by the insurance agent.
We think that the defendant had no intention of defrauding the insurance company; yet his statement that he was in good health was not true. ‘Good health’ as the term is used in an insurance policy means that insured is free from disease that would seriously affect the general soundness of the system, and that he has not been attended by a physician for a serious ailment. Ligrow v. Abraham Lincoln Life Ins. Co., 260 Mich. 444 at page 446,245 N. W. 498.
Insurance policies are traditionally contracts uberimae fidei and a failure by the insured to disclose conditions affecting the risk, of which he is aware, makes the contract voidable at the insurer's option. Hardman v. Firemen's Insurance Co. (C. C.) 20 F. 594;New York Life Insurance Co. v. Abromietes, 254 Mich. 622, 236 N. W. 769.
Concealment becomes fraudulent only when it is the duty of the party having knowledge of the facts to disclose them to the other. 2 Pomeroy's Equity Jurisprudence (4th Ed.) § 902.
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