Ranger, Inc. v. Equitable Life Assur. Soc. of US

• Citation: 196 F.2d 968
• Decision Date: 13 May 1952
• Docket Number: No. 11360.,11360.
• Parties: RANGER, Inc. v. EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES.
• Court: U.S. Court of Appeals — Sixth Circuit

196 F.2d 968 (1952)

RANGER, Inc. v. EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES.

No. 11360.

United States Court of Appeals Sixth Circuit.

May 13, 1952.

COPYRIGHT MATERIAL OMITTED

Craig E. Davids, Grand Rapids, Mich., for appellant. Allaben, Wiarda, Hayes & Hewitt, by F. Roland Allaben, Grand Rapids, Mich., on the brief.

Clifford Christenson, Grand Rapids, Mich., for appellee. Varnum, Riddering, Wierengo & Christenson, by L. K. Varnum, Grand Rapids, Mich., on the brief.

Before HICKS, Chief Judge, and ALLEN and MILLER, Circuit Judges.

MILLER, Circuit Judge.

The appellant, Ranger, Inc., brought this action in the district court to recover on a life insurance policy in the amount of $20,000, in which it was named beneficiary. Following a verdict of no cause of action, judgment was entered for the appellee insurance company.

The complaint alleges that on January 11, 1947, the Equitable Life Assurance Society of the United States, insured the life of Edward N. Andrews, then President of the Appellant Company, in the amount of $20,000 for a period of ten years, payable to the appellant as beneficiary upon receipt of due proof of death prior to the expiration date therein; that the insured, Andrews, died on December 2, 1948; that appellant furnished proper proof of death to the appellee, and that the appellee refused to make the payment provided by the policy. Appellee by its answer admitted the execution of the policy, but claimed that the insured made false answers to certain questions in the application for insurance, which the appellee relied upon, believing them to be true; that the false representations materially affected the acceptance of the risk and the hazard assumed by the appellee; that they were made by the insured with the intent to deceive the appellee and for the purpose of inducing it to issue the policy of insurance; that if the appellee had known the true facts it would not have approved the application nor issued the policy; that the appellee upon learning of the falsity of the statements in the application had acted to rescind the policy and had tendered to the appellant a return of the premiums paid with interest thereon. Death of the insured occurred within the two-year contestable period. Appellant denied that the answers were false or that they gave the appellee the right to rescind the policy. On the factual issues thus presented, the jury found for the appellee.

On this appeal, appellant raises numerous questions pertaining principally to the admissibility of evidence and to alleged erroneous instructions of the trial judge. As a preliminary question, however, we are met by appellant's challenge to the right of the appellee to rely upon any of the alleged false statements in the application.

Under § 24.263, Michigan Statutes Annotated, Comp.Laws 1948, § 522.3, it is provided that in the absence of fraud no statement made by the insured "shall avoid the policy unless it is contained in a written application and a copy of such application shall be endorsed upon or attached to the policy when issued". This has been construed by the Supreme Court of Michigan as requiring a copy that could be read by a person of normal eyesight under normal conditions and with reasonable ease, and that whether the copy complies with this standard is a question of fact for the jury. Eastman v. Metropolitan Life Ins. Co., 228 Mich. 125, 199 N.W. 655; Janunas v. Metropolitan Life Ins. Co., 239 Mich. 150, 214 N.W. 117.

Appellant contends that the copy in the present case did not meet this test. In charging the jury upon this issue, the District Judge stated in effect that it was for the jury to determine from observation of the photostatic copy and from the expert testimony in the case "whether or not the copy of the application at the time the policy was delivered to the insured could be read by a person of normal eyesight under normal conditions with reasonable ease," and that if the jury found that the copy of the application attached to the policy could not be so read, the appellant could not avoid liability under the policy by reason of any misrepresentation in the application. The jury's verdict shows that it found against the appellant on this issue. Appellant contends that the instruction was erroneous in that it required the copy of the application to be legible only at the time the policy was delivered, and that the statute requires the copy of the application to be legible at all times during the life of the policy. The contention is without merit. The statute above referred to requires the application to be attached to the policy "when issued." A similar instruction was given by the trial judge in Janunas v. Metropolitan Life Ins. Co., supra, and approved by the Supreme Court, although the particular point now made was not presented. In any event, as a practical matter, there was no prejudicial error, in that the testimony as to legibility was based on the photostat in its condition at the time of trial, and the jury was necessarily deciding whether or not it was legible at that time.

In his application for insurance the insured answered certain questions as follows:

"Question 3 E. Have you ever been in any hospital, asylum or sanatorium for observation, treatment or an operation? (State when, where, and for what reason).

"Answer: Yes, appendectomy, Evanston, Ill. 1923."

"Question 6 F. Have you ever had or been treated for any disease or disturbance of:

"The Skin, Bones, Glands, Eye or Ear?

"Answer: No."

"Question 7 F. Have you ever had any other illness or injury not mentioned above?

"Answer: No."

"Question 9. State below every physician, practitioner or specialist whom you have consulted or who has treated you during the past five years. (If none, so state.)

"Answer: None."

The appellee contends that the foregoing answers were false.

The evidence showed without contradiction that on November 30, 1943, the insured was admitted to the Saginaw General Hospital at 9:10 a. m. for the removal of a birthmark or mole on the top side of his face and that he was discharged the same day at 6:30 p. m. as "Recovered," with G. L. Ackerman as the attending doctor. The death certificate showed the insured to have died on December 2, 1948 of metastatic malignant melanoma, which the proof showed to be a form of cancer. Dr. Ackerman was called as a witness by the appellee and testified over appellant's objection that over a period of several months prior to November 30, 1943, he had observed a small growth on the insured's face which had a distinctly black appearance and that it was his opinion that just prior to its removal the growth was changing in its characteristics and becoming larger. Another doctor answered a hypothetical question containing those facts to the effect that in his opinion there was a direct connection between the tumor that was growing larger in 1943 and the insured's death in 1948, and that the insured had a malignant tumor in January 1947, when the policy was issued.

Appellant contends that the testimony of Dr. Ackerman was inadmissible as privileged under the well established physician-patient rule. Michigan Statutes Annotated, § 27.911, Comp.Laws 1948, § 617.62, provides — "No person duly authorized to practice medicine or surgery shall be allowed to disclose any information which he may have acquired in attending any patient in his professional character, and which information was necessary to enable him to prescribe for such patient as a physician, or to do any act for him as a surgeon: * * *." It seems clear that the patient or his personal representative may invoke the privilege, and also to be the rule in Michigan that the widow beneficiary of an insured may do so. New York Life Ins. Co. v. Newman, 311 Mich. 368, 373, 18 N.W.2d 859; Wigmore, Evidence, §§ 2386, 2391 (3rd Edition 1940). Appellee contends that a business beneficiary as contrasted with a relative beneficiary can not invoke the privilege, citing Rhodes v. Metropolitan Life Ins. Co., 5 Cir., 172 F.2d 183. However, the Michigan Supreme Court stated in Briesenmeister v. Supreme Lodge Knights of Pythias, 81 Mich. 525, 533, 45 N.W. 977, that an assignee of the beneficiary has the status to invoke the privilege. On the authority of that case, we agree with the ruling of the District Judge that the appellant in the present case had the right to invoke the privilege.

However, the privilege can be waived. People v. Kayne, 268 Mich. 186, 255 N.W. 758; Wigmore, Evidence, 3rd Ed., §§ 2388-2391. In the present case, the wife of the insured gave written authorization to the physicians who had treated her husband to furnish to the representative of the insurer who was investigating the case, the facts pertaining to the insured's illness and cause of death. Appellee claims this was a waiver of the privilege. But it has been held otherwise in Michigan, the law of which State is controlling in this case. Gilchrist v. Mystic Workers of the World, 188 Mich. 466, 475-476, 154 N. W. 575; Wohlfeil v. Bankers Life Co., 296 Mich. 310, 320, 296 N.W. 269. And although the death certificate was properly admitted in evidence, it did not operate as a waiver of the privilege so as to permit the physician who made out the certificate to testify generally about the patient's condition. Krapp v. Metropolitan Life Insurance Co., 143 Mich. 369, 106 N. W. 1107; Wigmore, Evidence, 3rd Ed., § 2390(4). Nor was the privilege waived by statements in the proof of death furnished to the appellee. Repala v. John Hancock Mutual Life Ins. Co., 229 Mich. 463, 467, 201 N.W. 465.

However, the evidence was admitted by the District Judge on the theory that the physician-patient relationship had not come into existence at the time Dr. Ackerman noticed the change in the growth on the insured's face. There is some conflict in the evidence on this point. Dr. Ackerman and the insured were friends socially and saw each other frequently before Dr. Ackerman became...