Thomas v. New York Life Ins. Co.
| Decision Date | 04 May 1935 |
| Docket Number | 6304 |
| Citation | 260 N.W. 605,65 N.D. 625 |
| Court | North Dakota Supreme Court |
Syllabus by the Court.
1. Under section 6501, Comp. Laws 1913, no oral or written misrepresentation made in the negotiations for a contract or policy of insurance is deemed material or defeats or avoids the policy or prevents its attaching unless:
(a) Such misrepresentation is made with actual intent to deceive or
(b) Unless the matter misrepresented increased the risk of loss.
2. Where the application for insurance is made the basis of the insurance contract and attached to and made a part of the policy, the application and the questions and answers thereto are as material as any other part of the contract.
3. In an action on an insurance policy where the defense is that there are misrepresentations of matter in the answers of the insured to the questions in the application for insurance which increased the risk of loss, insurance experts may testify concerning the usage of insurance companies generally in charging higher rates of premiums or in rejecting risks when made aware of facts relating to matter which increased the risk.
4. Where the application for an insurance policy is made the basis of the insurance contract, is attached to and made a part of the contract, and there are misrepresentations in the answers of the applicant to the questions in such application, and it appears from the record that reasonable minds could not differ on the question as to whether the matter misrepresented increased the risk of loss, such question is a question of law for the court.
5. Where a medical examiner's authority is limited to filling in the answers of the applicant to the questions in the application for insurance, to the making of a physical examination and report of the findings on the medical report knowledge of the applicant's health previously acquired in treating such applicant as a patient is not notice to or binding on the company.
Appeal from District Court, Stark County; H. L. Berry, Judge.
Action by Joseph Thomas against the New York Life Insurance Company. Judgment for plaintiff, and defendant appeals.
Judgment reversed.
Where plaintiff, suing for disability benefits under life policy made written consent to use of records of federal veterans' administration, and court made order for taking of depositions of certain officials connected with veterans' administration, all privilege as to records so far as their use in case was concerned held waived.
Dullam & Young, for appellant.
C. H. Starke, for respondent.
This is an action for damages for an alleged breach of an insurance policy. The appeal is from the judgment rendered in favor of the plaintiff and against the defendant for damages for the total and permanent disability of the plaintiff from the commencement of his disability throughout the term of his life expectancy on the theory that there has been an anticipatory breach of the contract of insurance against disability on the part of the defendant.
The policy covered the life of the plaintiff and included a total and permanent disability clause, by the terms of which, upon due proof of total or permanent disability, the defendant agreed to waive payment of premium and to pay to the insured the sum of twenty dollars per month. The policy was issued on the 25th day of March, 1929 and on March 3, 1933 the plaintiff offered proof of total disability and the defendant, upon receipt of the proof, made an investigation of the condition of the plaintiff's health at the time he signed the application and made certain representations concerning his health and on the 20th day of June, 1933 the defendant mailed to the plaintiff a notice rescinding the permanent disability clause of the insurance policy upon the ground of misrepresentation made by the plaintiff in his application for insurance. The attempted rescission relates only to the disability and double indemnity benefits expressly excluded from the incontestable provisions and excepting the disability and double indemnity provisions the policy is in full force and effect.
The defendant returned to plaintiff the premiums paid for the permanent disability insurance and the plaintiff, refusing to accept the same, brought an action for breach of the insurance contract. The case was tried to a jury and at the close of all the testimony a motion, by the defendant, for directed verdict was overruled and judgment was entered for the plaintiff upon the verdict returned by the jury, from which judgment the defendant appeals.
The misrepresentations, upon which the defendant relies for a rescission of the total and permanent disability clause in the insurance policy, are the answers to the questions in the application as follows, to wit:
Just above the signature of the plaintiff to the application for insurance and printed in red ink appears the following, namely: "On behalf of myself and of every person who shall have or claim any interest in any insurance made hereunder, I declare that I have carefully read each and all of the above answers, that they are each written as made by me, and that each of them is full, complete and true, and agree that the company believing them to be true shall rely and act upon them."
The policy states: "This contract is made in consideration of the application therefor and of the payment in advance of the sum of $ 78.50." After the term "The Contract," there appears in the policy the following: A copy of the application is attached to the policy and made a part thereof.
Section 6501, Compiled Laws 1913, provides: "No oral or written misrepresentation made in the negotiation of a contract or policy of insurance by the insured or in his behalf shall be deemed material or defeat or avoid the policy or prevent its attaching, unless such misrepresentation is made with actual intent to deceive, or unless the matter misrepresented increased the risk of loss." The following §§, Compiled Laws 1913, apply to insurance contracts, viz.:
Section 6480: "A neglect to communicate that which a party knows and ought to communicate is called a concealment."
Section 6481: "A concealment, whether intentional or unintentional, entitles the injured party to rescind a contract of insurance."
Section 6492: "The language of a representation is to be interpreted by the same rules as the language of contracts in general."
Section 6500: "The materiality of a representation is determined by the same rules as the materiality of a concealment," and the materiality of a concealment, under § 6484, "is to be determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is due in forming his estimate of the disadvantages of the proposed contract or in making his inquiries."
Section 6498: "A representation is to be deemed false when the facts fail to correspond with its assertions or stipulations."
Section 6499: "If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract from the time when the representation becomes false."
Section 6482: "Each party to a contract of insurance must communicate to the other in good faith all facts within his knowledge which are or which he believes to be material to the contract and which the other has not the means of ascertaining and as to which he makes no warranty."
Section 6483: "Neither party to a contract of insurance is bound to communicate information of the matters following, except in answer to the inquiries of the other:
The applicant represented that he had not consulted a physician or practitioner or suffered from any ailment or disease of the brain or nervous system, the heart, blood vessels or lungs, the stomach or intestines, liver, kidneys or bladder the skin, middle ear or eyes; that he never had rheumatism, gout or syphilis; that he had not consulted a physician or practitioner for any ailment or disease not included in any of the above answers and that he had not...
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