State ex rel. John Hancock Mut. Life Ins. Co. v. Hughes

• Decision Date: 12 June 1941
• Docket Number: 37483
• Citation: 152 S.W.2d 132
• Parties: STATE ex rel. JOHN HANCOCK MUT. LIFE INS. CO. v. HUGHES et al
• Court: Missouri Supreme Court

152 S.W.2d 132

STATE ex rel. JOHN HANCOCK MUT. LIFE INS. CO. v. HUGHES et al

No. 37483

Supreme Court of Missouri, First Division

June 12, 1941

Leahy Walther & Hecker and John S. Leahy, Jr., all of St. Louis for relator.

Robert E. Hannegan, Gilbert Weiss, and Martin A. Rosenberg, all of St. Louis, for respondents.

OPINION

HAYS Judge.

Certiorari to the St. Louis Court of Appeals to quash the judgment of said court in the case of Phillip Longo v. John Hancock Mutual Life Insurance Company, 142 S.W.2d 871, 875, upon the ground of alleged conflict with certain of our prior controlling decisions. The case under review was an action on a policy of life insurance brought by the named beneficiary against the insurer. The issuance of the policy, the payment of premiums and the death of the assured are conceded. The insurer defended upon the ground of certain false and allegedly fraudulent representations said to have been made by the assured in her application for the policy and also upon the ground of the alleged breach of the sound-health provision contained in the policy itself. For the facts of the case we look, of course, solely to the opinion of the respondent judges and the record documents, such as pleadings, instructions, the policy and the application referred to in such opinion.

From December, 1929, to November, 1932, the assured, Josephine Longo, wife of the plaintiff beneficiary, had suffered from pulmonary tuberculosis and had undergone treatment therefor in two hospitals. At the latter date she was discharged from Koch Hospital as an arrested case although she was advised to report to an out-patient clinic for periodic examinations and did so report. She was apparently in good health and went about normally performing her regular duties. Shortly before February 13, 1934, she signed the application for the policy here in suit. The events leading up to the signing of this application, as they are set out in the opinion below, are as follows:

The defendant company was engaged in one of the special-selling campaigns, periodically started by most insurance companies. One Saputo, an agent of the defendant, had been personally acquainted with the Longos for many years. During these years he knew of the fact that Mrs. Longo had been in the hospital and had frequently discussed her condition with her husband. On the day the application was signed Saputo, together with one Ramsey, an assistant district manager of the defendant, called on Mr. Longo at his filling station to try to sell him a policy on his own life. Longo declined to take out such policy and Saputo asked him about the chance of writing one on Longo's wife. Plaintiff then told Ramsey that his wife had been in the hospital for tuberculosis but had been discharged as an arrested case. To this Ramsey replied: 'It would be alright as long as she is an arrested case, it wouldn't make much difference.' The three men then went across the street to a place where Mrs. Longo was visiting and discussed the matter with her. She again told them about her previous hospitalization and Ramsey, in his own handwriting and without further consulting her, filled out the answers to the various questions contained in the application, including those touching on prior illness. He neither asked her the questions directly nor read over to her the answers he had written, but simply presented to her the completed application and asked her to sign it. It is this application which contains the allegedly false statements which form the basis of the insurer's defense.

Six months after the issuance of the policy the assured caught a cold which hung on for sometime. Her tubercular condition again became active and on April 11, 1935, she died. The reactivated tuberculosis was the cause of death.

In the trial court plaintiff was awarded judgment for the face of the policy and interest and also for a ten per cent penalty and an attorney's fee, the latter portion of the judgment being based upon the alleged vexatious delay of the insurer in settling the claim. In the Court of Appeals the defendant, among other points not here in issue, assigned error upon the action of the trial court in submitting the issue of vexatious delay to the jury. The portion of respondents' opinion disposing of this contention is as follows:

'Finally it is contended that the court was in error in submitting the question of vexatious refusal to pay.

'We think this point is likewise unavailing. If the facts were as plaintiff's evidence tended to show, that defendant refused payment upon the ground of the misrepresentations regarding the insured's health, when it was not only to be charged with knowledge of the true facts, but was also to be charged with knowledge that its own agent had knowingly written the false answers in the application without the knowledge of the insured, then its refusal was vexatious within the meaning of the statute, * * * or at least the jury was warranted in...