Rabin v. The Central Business Men's Association

• Decision Date: 07 June 1924
• Docket Number: 25,206
• Citation: 226 P. 764,116 Kan. 280
• Parties: JULIUS H. RABIN, Appellee, v. THE CENTRAL BUSINESS MEN'S ASSOCIATION, Appellant
• Court: Kansas Supreme Court

226 P. 764

116 Kan. 280

JULIUS H. RABIN, Appellee, v. THE CENTRAL BUSINESS MEN'S ASSOCIATION, Appellant

No. 25,206

Supreme Court of Kansas

June 7, 1924

Decided January, 1924

Appeal from Wyandotte district court, division No. 3; WILLIAM H MCCAMISH, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. ACCIDENT INSURANCE--Voluntary Surrender of a Former Policy--No Breach of Warranty in Application. In an application for accident insurance a warranty that no other insurance had been canceled is not breached by the prior voluntary surrender of a policy by the assured.

2. SAME--Incomplete Answer to Questions in Application--Waiver by Insurer. When upon the face of an application for accident insurance a question appears to be incompletely answered and the insurer issues a policy without further inquiry it waives the incompleteness of the answer.

3. SAME--"Continuous" Injury Defined. An injury develops at once and is continuous within the meaning of an accident insurance policy when it follows directly from the accidental hurt within such time as the processes of nature consume in bringing the person affected to a state of incapacity to prosecute his occupation.

J. E. McFadden, O. Q. Claflin, jr., both of Kansas City, and Ross J. Ream, of Kansas City, Mo., for the appellant.

J. H. Brady, and T. F. Railsback, both of Kansas City, for the appellee.

OPINION

HARVEY, J.:

This is an action upon an accident insurance policy. There was a verdict and judgment for plaintiff, and defendant has appealed.

The petition contained the usual allegations for such an action, and had attached to it a copy of the policy sued upon, including a rider indemnifying for injuries from pyrogenic infection. The answer, after admitting the execution of the policy, contained a general denial, and averred that plaintiff had made false answers to material questions in his application for the policy which he had warranted as true and which had been relied upon by defendant in issuing the policy. The reply was a general denial.

Among the answers given by plaintiff in his application for the policy, and which he warranted as being true, were the following:

"Has any application ever made by you for life, accident or health insurance been declined? Answer as to each: No.

"Has any life, health or accident policy issued to you been canceled? Answer as to each: No.

"Has any renewal of a life, accident or health policy been refused by any company or association? Answer as to each: No."

Defendant contended that the second portion of this question was falsely answered, for the reason that in 1915 plaintiff had policies in three accident insurance companies which were canceled, and offered evidence tending to show that fact. Plaintiff in his testimony admitted that he had three accident insurance policies; said he had received an injury which resulted in a fractured arm; that he presented a claim under each policy; that he was not satisfied with the settlement made, and that he had surrendered the policies by going personally to the general office of the respective companies at Kansas City, Mo., and turning his policies in and receiving the unearned premiums thereon. On this question the court instructed the jury as follows:

"In regard to this I instruct you that the cancellation contemplated by the question related to cancellation by other insurance companies when exercising their option under the policy to cancel same, and does not refer to a cancellation by the plaintiff himself or the assured because of being dissatisfied with the manner in which his claims were handled or other conduct on the part of the insurance company objectionable to him."

Appellant complains of this instruction, and says that by it the court has changed the question asked in the application so as to read, "Has any life, health or accident policy issued to you been canceled by the company issuing the same?" and contends that that was not within the province of the trial court. Considering question eight as a whole, it is clear the company wanted such information as would indicate whether or not any company had ever declined to insure the applicant or canceled the policy issued to him or refused to renew a policy previously issued, and so construed the question is material. It was of no importance to the company to know whether or not the applicant had voluntarily surrendered a policy, even though technically it might have been marked canceled, or whether he had let one lapse by reason of nonpayment, for under such circumstances the act would not indicate anything detrimental to the applicant as a risk. In 1 C. J. 423, speaking of false warranties in an application for accident insurance and the interpretation which should be given to them, it is said: "So also the voluntary surrender of a policy is not a breach of a warranty that no other insurance has been canceled."

In Smith v. Insurance Co., 36 N. B. 300, Smith had two accident policies with one insurance company, and sustained an injury, for which he made claim. After some controversy the amount payable was agreed to. The company, in remitting to its local agent, sent a check for the amount agreed to be due upon the claim, and stated, "As we are desirous of retiring from the risk we inclose a further check" for the unearned premium, and asked its local agent to take up the policies in making settlement of the claim. The agent did not read the letter to the insured, but handed him the check for the amount of the settlement and asked him if he was willing to surrender the policies on the unearned premiums being returned. To this the insured assented. The agent then gave him the check for the unearned premiums and the insured delivered the policies. Thereafter he made application to another insurance company for accident insurance and stated in his application, "No accident policy ever issued to him had been canceled by this or any other company, corporation or association, except as herein stated." No exceptions were stated. In an action upon this last policy the defense was that this answer was false, and that it avoided the policy. The court held "that the putting an end to the policy with the consent of the plaintiff was a surrender and not a cancellation, and was not a breach of the warranty that no policy issued to him had ever been canceled."

In Wells v. Great Eastern Casualty Co., 40 R. I. 222 the application contained this statement: "No accident, sickness or life insurance policy issued to me has ever been canceled or renewal refused except as follows--no exceptions." In an action upon...