Southard v. Occidental Life Ins. Co. of Cal.

• Decision Date: 07 June 1966
• Citation: 142 N.W.2d 844,31 Wis.2d 351
• Parties: James H. SOUTHARD, Plaintiff-Respondent, v. OCCIDENTAL LIFE INSURANCE COMPANY OF CALIFORNIA, a foreign corporation, Defendant-Appellant.
• Court: Wisconsin Supreme Court

Page 844

142 N.W.2d 844

31 Wis.2d 351

James H. SOUTHARD, Plaintiff-Respondent, v. OCCIDENTAL LIFE INSURANCE COMPANY OF CALIFORNIA, a foreign corporation, Defendant-Appellant.

Supreme Court of Wisconsin.

June 7, 1966.

Chambers, Nash, Pierce & Podvin, Wisconsin Rapids, for appellant.

Hosek, Zappen & Meissner, Marshfield, for respondent.

HALLOWS, Justice.

We hold a question of law rather than a question of fact is raised by the affidavits and should be decided upon the defendant's motion under the rule laid down in Bond v. Harrel (1961), 13 Wis.2d 369, 108 N.W.2d 552, 98 A.L.R.2d 330; Rabinovitz v. Travelers Ins. Co. (1960), 11 Wis.2d 545, 105 N.W.2d 807, and Voysey v. Labisky (1960), 10 Wis.2d 274, 103 N.W.2d 9. In its affidavit in support of its motion, the defendant sets forth the application and states it relied thereon in insuring Southard. The critical question in the application concerning the applicant's health asked, 'During the last two years have you had heart disease, diabetes, lung disease, cancer or any other serious illness, or received treatment or medication for blood pressure?' To this inquiry, Southard answered 'no.'

From the affidavits it is clear and without dispute that Robert R. Southard severed his spine in a swimming accident in June 1954, that as a result he had a nonfunctioning nervous system and was partly paralyzed, that the paralysis affected both his arms and legs, making him a quadriplegic, that he had no control of his normal bladder functions and it was necessary to have a cystotomy tube inserted in his bladder, that this tube caused a chronic cystitis condition which necessitated continual medical treatment for leakage and bleeding around the tube and that from the time of the 1954-swimming accident until his death the applicant was confined to a wheelchair.

The defendant's affidavit claims this condition was a serious illness and thus the answer in the application was a misrepresentation; and on the contrary the plaintiff's affidavit claims such condition was not a serious illness, was not considered so by the applicant, and in spite of his handicap the applicant completed his college education at the University of Wisconsin and the Eau Claire State Teacher's College, established a successful insurance agency in Eau Claire, was president of the Sheltered for Handicapped, Inc., and was chosen Wisconsin's handicapped person for 1960. The cause of death given in the death certificate was 'Pul. (monary) Atelectasis & Pneumonia' with 'Quadriplegia' and 'Septicemia' as significant conditions contributing to death but not related to the terminal disease.

We hold the applicant did not have a serious illness at the time he made the application for group-life insurance coverage. What constitutes a serious illness must be construed in the light of the particular use of the word and in its context. Here, the defendant solicited the application for life insurance by mail and required no physical or medical examination. Only two questions directly relating to insurability were asked. The first inquired whether the applicant had been confined to a hospital or sanitorium within the last two years, to which the applicant answered 'no.' The second question, claimed to be falsely answered, asked whether 'During the last two years' the applicant 'had heart disease, diabetes, lung disease, cancer or any other serious illness, or received treatment or medication for blood pressure?' Under the familiar canon of construction of ejusdem generis, 'other serious illness' would mean an illness of the same general seriousness and classification as cancer, or diabetes, or heart and lung disease. See 17A C.J.S. Contracts § 313 p. 173. These diseases all relate to and seriously affect the general soundness and health of a person and require continuous medical treatment. Quadriplegia is not such an illness, if it is an illness at all. This inquiry in the application relating to insurability is limited and does not cover all illnesses but only serious illnesses of a limited classification. This and the question relating to confinement in a hospital or sanitorium and treatment for blood pressure were all the insurance company was interested in or considered necessary for the type of group-life insurance offered. It does not ask whether the applicant was free from any physical impairment, whether he considered himself in good health, or except for blood pressure whether he had received any medical treatment or advice. Obviously the risks assumed under this group plan are greater than those assumed under individual policies requiring more detailed information and a medical examination and presumably the premiums were related and adjusted to the risks thus assumed.

The inquiry in the application called for a layman's answer, not a medical opinion. An insurer soliciting by mail applications for life insurance from laymen cannot expect medical opinions as answers to inquiries. Conversely, the applicant must make a reasonable use of his faculties in endeavoring to understand and answer the questions asked of him and his answers must be made fairly and in good faith. Nor can an insurer inquire about a few illnesses and expect a complete medical history in response. The questions must 'fetch the answer.'

It is no doubt true the applicant's condition was material to the risk in the sense it would have influenced an insurance...