FANSLER, Judge.
Appellee
began this action in equity to cancel and rescind a life
insurance policy upon the life of Walter Emsweller, upon the
ground that the insured had concealed a material fact in
applying for the policy. There was a second paragraph of
complaint, which we need not notice. There were answers in
general denial, the cause was submitted to the court, and
there was judgment for appellee canceling and annulling the
policy. A motion for a new trial was overruled, which ruling
is the basis of the only errors assigned.
The
complaint alleges that Walter Emsweller applied to the
plaintiff for a policy of insurance on his life in the amount
of $5,000; ‘ that in said application for that
insurance the said Walter Emsweller in the blank calling upon
him to state the death of any deceased brother, did not state
the death of a brother who had died just a few months prior
which said brother died insane and by suicide, that said
facts of said brother's death were then and there well
known to the said Walter Emsweller; in fact, plaintiff is now
informed that the said Walter Emsweller so worried over the
death of that brother that he himself became mentally
deranged, and died of such insanity; that said facts so known
to the said Emsweller and so concealed from
plaintiff were material, and had they been known to
plaintiff, plaintiff would not have issued an insurance
policy upon said application; that plaintiff, relying upon
the truth of said application, in pursuance to said
application, issued to said Walter Emsweller its
policy.’
It
appears from the evidence that, in December, 1930, when he
applied for the policy, the applicant was 44 years of age;
that he was a farmer and road-building contractor, residing
near the town of New Salem, in Rush county; and that, for
some time prior thereto, he had been in partnership with
appellant Arthur H. George in the business of quarrying
gravel and stone for road-building and other purposes.
Chester George, a lawyer and brother of Arthur H. George, was
attorney for the partners and also agent for appellee. At
about the time of the application for this policy, the
partners agreed that each should procure a policy of
insurance on his life in the sum of $5,000; the premiums to
be paid out of partnership funds, and the policies to be
assigned to the Rushville National Bank, as trustee, pursuant
to a written contract, by the provisions of which the bank,
upon the death of a partner, should collect the proceeds of
the policy and use them in purchasing the deceased
partner's interest in the partnership property for the
benefit of the surviving partner. The policy, when issued on
January 2, 1931, was made payable to Emsweller's estate.
It was assigned to the bank, as trustee, and thus appellant
Arthur H. George, brother of the company's agent, became
the principal beneficiary under the policy, which fact was
unknown to appellee at the time. Chester George drew up and
prepared the contract involving the insurance. On December
22, 1930, the partners went to his office and filled out an
application for the insurance. The two Georges testified that
this occurred in Rushville, late in the
afternoon, and that, at about 5 o'clock, Chester George
telephoned the offices of Drs. Kennedy and Logan, the regular
examining physicians of appellee, and was unable to get them
on the telephone. The doctors both testified that they were
in Rushville during the entire day and evening of that day.
There was no effort to locate them at their homes. Chester
George then immediately called the office of Dr. Metcalf, who
was, and had been for twenty-five years, the family physician
of Emsweller, and Emsweller proceeded to Dr. Metcalf's
office for a physical examination. In answer to an inquiry
from appellee, before the policies were issued, Chester
George replied that the company's regular examiners were
not employed for the reason that they were not available when
the applicant was ready to be examined.
Chester
George, Dr. Metcalf, and appellant Arthur H. George were
familiar with the fact that, within a few months prior to the
application for insurance, a brother of the applicant
Emsweller committed suicide while insane. Chester George
testified, that, before going to the office of Dr. Metcalf,
he prepared a family history, setting out the names of the
brothers and sisters of Emsweller which he took from an
application for insurance made some time before; that he
handed this family history to Dr. Metcalf, and told him the
date on which it was made, and suggested that the ages could
be corrected by adding the difference in years. Dr. Metcalf
at first testified that no such list was given him; that he
did not need it, since he personally knew the family history;
but afterwards seemed in doubt about the question. The
application, when filed with the company, did not disclose
the death of the brother above referred to. The following is
a photostatic copy of that part of the application which
refers to the family history:
|
7.a. Family History
|
Age if Living
|
Health-Good or Bad
|
Age at Death
|
|
Father
|
......
|
..............
|
60
|
|
Cause of
|
How
|
Year of
|
b. Have any of those
|
|
Death
|
Long Ill
|
Death
|
mentioned under
|
|
diabetis
|
20 days
|
..95
|
househod ever had
|
If the family history had been correctly given in
the former insurance application, from which Chester George
says he copied it, the brother, who had since died, was
either accidentally or purposely omitted in copying or by Dr.
Metcalf in filling the blank. Chester George testified that
he told Dr. Metcalf, at the time of the examination, to show
the death of the brother Elmer, who had suicided while
insane, and that the applicant Emsweller also reminded the
doctor to insert in the application the fact of his
brother's death,
which was not done. Appellants' witnesses testified that,
at the time Emsweller signed the application, it had all been
filled out except the family history, which was filled in by
Dr. Metcalf later.
Afterwards,
and before the policy was issued, Chester George called upon
the chief medical examiner of appellee. He testified that the
medical examiner made some question about the application on
account of an abnormal difference between the systolic and
diastolic blood pressure, and suggested a re-examination, and
that George then suggested that, rather than a
re-examination, the policy be written at the higher rate
provided for such conditions. George then testified that he
thought he mentioned the death of the brother to the medical
examiner, and said: ‘ As I recall it, I made the
statement that the only objection that I saw to the policy
was the suicide of his brother.’ This was positively
denied by the chief medical examiner. George also testified
that he had knowledge of the fact that another brother of the
applicant was mentally deficient. Dr. Metcalf testified that
nothing was said to him at the time of the
application, either by Emsweller or George, concerning the
suicide of the applicant's brother, but that he had
personal knowledge of the facts and the entire family history
at the time, and that he did not recall whether he had put it
in the application or not. He testified that he had known and
been connected with the Emsweller family for twenty-five
years, and that he had examined other members of the family
and was familiar with the family history.
On
April 23, 1931, an insanity inquest was held on the assured,
and he was found to be of unsound mind, and was committed to
an institution, and on May 13, 1931, less than five months
after the policy was issued, he died.
It is
contended by appellants that the application filed with the
company discloses the fact that there is one brother
unaccounted for, and that the company must be charged with
knowledge of that fact and with having waived information
concerning that brother. But assuming, as the trial court
evidently did, that the application was prepared, as it is,
designedly and pursuant to a plan to deceive appellee, it was
necessary to the success of the fraudulent plan that there be
some basis for such a contention as is now made.
The
application blank makes it clearly appear that the company
desired to know whether any of the brothers or sisters of the
applicant were dead, the cause of death, the length of
illness, and the year of death. It is equally clear that in
examining the application the company's representatives
would be principally concerned with the facts concerning the
members of the family who are dead. It would be observed that
the father's age at death was given, the cause of death
and the length of illness, and, when it was observed that the
remaining members of the family were living and in good
health, and that no others were shown to be dead, there would
be but little concern as to the number of
brothers and sisters. The figures, after the words ‘
brothers' and ‘ sisters,’ in the first
column,...
