Shaw v. American Ins. Union

• Decision Date: 06 January 1931
• Docket Number: No. 21335.,21335.
• Court: Missouri Court of Appeals
• Parties: SHAW v. AMERICAN INS. UNION.

33 S.W.2d 1052

SHAW v. AMERICAN INS. UNION.

No. 21335.

St. Louis Court of Appeals. Missouri.

January 6, 1931.

Rehearing Denied January 23, 1931.

Appeal from St. Louis Circuit Court; O'Neill Ryan, Judge.

"Not to be officially published."

Action by Nelson Shaw against the American Insurance Union, a corporation. Judgment for plaintiff, and defendant appeals. Affirmed.

J. D. Karns, of Columbus, Ohio, and Jones, Hocker, Sullivan & Angert and Raymond J. Lahey, all of St. Louis, Mo., for appellant.

Gordon Wheeling, Roberts P. Elam, and R. P. & C. B. Williams, all of St. Louis, for respondent.

BENNICK, C.

This is an action upon a policy of life insurance, issued by defendant, American Insurance Union, a fraternal benefit society, organized and existing pursuant to the provisions of article 15, chap. 50, R. S. 1919. The policy was for the face value of $2,000, and was taken out July 20, 1926, by Minnie B. Shaw, the wife of plaintiff, Nelson Shaw, who sues as the beneficiary therein.

The petition alleged the issuance of the policy; the death of the insured on November 4, 1926, while the policy was in full force and effect; demand by plaintiff upon defendant for the payment of the proceeds of the policy prior to the filing of this suit; and defendant's refusal to pay. Judgment was prayed for the aggregate sum of $2,700, representing the face value of the policy, together with the statutory penalty and an allowance for attorney's fee by way of vexatious refusal.

The answer admitted the issuance of the policy in the amount and at the time stated in the petition; the designation of plaintiff as beneficiary; the death of the insured; and the fact that plaintiff had demanded payment, and that the same had been refused.

Coupled with a general denial, and by way of affirmative defenses, the answer set up that in her application for the policy the insured had misrepresented her age and the condition of her health, all of such misrepresentations being breaches of warranty which rendered the policy null and void; and, further, that plaintiff, after the death of the insured, did not present any claim under the policy to defendant's national board of directors, as required by defendant's by-laws, and that consequently his action was prematurely brought.

The reply was in the conventional form.

In all there have been two trials of the case, resulting in each instance in a verdict for plaintiff, and against defendant. After the first trial, defendant's motion for a new trial was sustained upon the ground that the verdict was against the weight of the evidence. The verdict in the second trial was for plaintiff in the aggregate sum of $1,588.06, representing the amount for which defendant was liable to plaintiff in the light of the actual age at which the insured was found to have applied for the policy, together with interest thereon. Judgment was rendered in accordance with the verdict, and defendant has duly appealed.

Defendant has but one principal point for our consideration, and that is that the court erred in refusing to direct a verdict in its favor, the theory being that the representations which were made by the insured in her application for membership in regard to the state of her health constituted warranties; that the uncontradicted evidence, and particularly defendant's documentary evidence, showed such representations to have been false; and that they therefore avoided the policy as a matter of law, and the court should have so declared. There is also the further contention that the action was prematurely brought, inasmuch as the claim was not first submitted to a designated tribunal within the society; and this latter point will receive consideration in due course.

In so far as defendant argues that representations by an applicant for membership in a fraternal society are warranties, and when false will avoid a policy, it correctly states the law as declared by numerous authorities. In fact, counsel for plaintiff admit the proposition, so that our task is to determine whether the uncontradicted evidence disclosed a misrepresentation by the insured in regard to her health, in which event there would have been no issue of fact to submit to the jury, and defendant's requested peremptory instruction should have been given.

In her application for the policy, made on July 13, 1926, in response to questions as to whether she had had rheumatism, whether she had consulted a physician in the last five years, and whether she had been treated for uterine disorders, the insured answered in each instance in the negative. In support of its claim that all of such answers were false, defendant offered, not only an abundance of parol evidence which tended to show that the insured had been in bad health and under the care of physicians within the five-year period, but also the records of the Washington University Clinic and the City Hospital. The former purported to disclose that on May 1, 1924, the insured came to the clinic, at which time a diagnosis of dysmenorrhœa was entered, the same being considered by defendant as a uterine disorder; and that she received additional care and attention at the clinic from time to time thereafter until September 25, 1924. The latter showed that she entered the City Hospital on October 20, 1926; that she had been complaining, among other things, of rheumatism since the previous November; that she had been treated by outside physicians prior to her entry into the hospital; that on October 27, 1926, she underwent an operation for the removal of the left tube and ovary; and that on November 4, 1926, she died, the final diagnosis being "broncho-pneumonia—post-operative."

As opposed to defendant's evidence upon the issue of the health of the insured, plaintiff offered in rebuttal a great deal of parol evidence to the effect that the insured appeared to be a healthy normal person; that she complained of no illness and consulted no physicians until immediately before her entrance into the City Hospital; that she performed her housework all the while, and in addition had employment in factories for a number of months; and that she took part in the ordinary forms of amusement. Such testimony covered the period from May, 1924, a year prior to her marriage to plaintiff, up to her last illness, approximately three months after the issuance of the policy. Beyond this, plaintiff had the testimony of defendant's district representative who took the insured's application, and who stated that he judged from her physical appearance that she was a desirable risk, and that he saw her at lodge meetings afterwards, where she appeared to be all right physically; and he further relies upon the medical examiner's report attached to the application, in which defendant's own examining physician certified that he had examined the applicant, and had found her free from any disease, and that he recommended her as a first-class risk.

There seems to be no dispute about the fact that plaintiff made a prima facie case through the introduction of the policy, but defendant argues that, notwithstanding such conclusion, the prima facie case was overcome and destroyed by its own evidence so as to have warranted a directed verdict in its favor. As the basis for its claim, it calls our attention to the fact that its own proof consisted, in part at least, of what it would have us believe was uncontradicted and unimpeached documentary evidence, showing conclusively that the insured had made the misrepresentations upon which it relies to defeat the policy. Of course it recognizes the fact that the truth of such evidence was disputed by plaintiff's parol testimony which was offered in rebuttal, but as to this it argues that lay evidence in regard to health cannot serve to contradict medical evidence to an opposite effect, and that evidence of the former character in no way rebuts or modifies the force of the latter.

Ordinarily there is no doubt that, where the plaintiff makes out a prima facie case, it would be error for the court to give a peremptory instruction declaring that he cannot recover. However, as in the case of most general rules, this one has its exception (and it is upon such exception that defendant pins its hopes for a reversal), namely, that if the evidence contradictory of plaintiff's case is in writing, or is a matter of record, and stands undisputed, and overcomes and destroys the prima facie case made for plaintiff, then it is perfectly proper for the court to...