Watson v. Metropolitan Life Insurance Co.
| Decision Date | 18 July 1941 |
| Docket Number | 31-1941 |
| Citation | 21 A.2d 503,145 Pa.Super. 369 |
| Parties | Watson v. Metropolitan Life Insurance Company, Appellant |
| Court | Pennsylvania Superior Court |
Argued March 4, 1941.
Appeal from decree of C. P. Luzerne Co., May T., 1937, No. 366, in case of Mary Watson v. Metropolitan Life Insurance Company.
Assumpsit. Before Jones, P. J.
The facts are stated in the opinion of the Superior Court.
Verdict for plaintiff. Motion by defendant for judgment n.o.v. refused; motion for new trial granted. Defendant appealed.
Error assigned, among others, was refusal of judgment n.o.v.
Order affirmed.
John H Collins, of Collins & Collins, for appellant.
Wm. J Fahey, with him Al. J. Kane, for appellee.
Before Keller, P. J., Cunningham, Baldrige, Stadtfeld, Rhodes and Hirt, JJ.
The action below was in assumpsit on an endowment policy of life insurance for $ 1,000 issued on the life of Alfred Watson. The plaintiff beneficiary was the insured's wife. It has been tried twice, resulting each time in a verdict for the plaintiff; and each time the court below has granted a new trial, because, in its opinion, there was so much in the case from which fraud could be inferred, that a new trial was required in the interests of justice. At the same time the court refused to enter judgment non obstante veredicto for the defendant holding that the principle laid down by the Supreme Court in Evans v. Penn Mut. Life Ins. Co., 322 Pa. 547, 560, 186 A. 133, applied, to wit: " Whenever disputed questions of fact are presented by conflicting evidence, whether documentary or oral, or whenever the insurer's defense depends upon the testimony of its witnesses, even though such testimony is uncontradicted, the case must be submitted to the jury, subject to the trial court's power to award a new trial as often as in its sound discretion it may think the interests of justice require"; and adding
The defendant appealed to this court from the refusal to enter judgment in its favor non obstante veredicto and seeks to obtain a ruling from us that the doctrine of 'continuing representation' will be applied in this state in its severest form; that is, that every material representation made by the insured in his application for insurance and in connection with his medical examination for insurance, will be deemed to continue as a representation by him down to the date of the delivery of the policy, unless notice of any change therefrom or exception thereto is given by the insured to the company at its home office and assented to by it before the policy becomes effective. It is contended that notice of such change or exception by the insured to the agent commissioned by the insurer to countersign and deliver the policy would not be sufficient. In other words, if an applicant for insurance truthfully states that he has not consulted a physician for five years prior to the date of his application, but in the interval between the date of his examination by the company's doctor and the delivery of the policy, he should consult a physician, the policy would be avoided if he died before it became incontestable, unless he notified the insurance company, prior to the effective delivery of the policy, of his visit to the physician and had the exception noted by it on the application and the policy.
We do not understand that to be the law of Pennsylvania and refuse so to rule. This court, in First Nat. Bank v. U. R. O. Brotherhood , 132 Pa.Super. 320, 324-325, 200 A. 935, in substance held otherwise. See also, Stonsz v. Equitable Life Assur. Soc., 324 Pa. 97, 187 A. 403, where the insured was injured between the date of his application and the delivery of the policy, but was permitted to recover.
In our opinion the decisions in this state go no farther than to hold that the mutual good faith which is required in a contract of life insurance will not permit a recovery where the insured intentionally withholds or conceals material changes in the condition of his health between the date of his examination by the company's physician and the delivery of the policy, of which he has knowledge, and of such a nature as to affect his insurability and make him a hazardous risk, and thus amount to a fraud on the company. See Mutual Life Ins. Co. v. Bamford, 132 Pa.Super. 255, 200 A. 907; Livingood v. New York Life Ins. Co., 287 Pa. 128, 131-132, 134 A. 474; Suravitz v. Prudential Ins. Co., 244 Pa. 582, 91 A. 495. And in such cases, the knowledge of the insured and his fraudulent intent are usually questions for the jury, subject to the power and duty of the court to grant a new trial if required in the interest of justice.
As the jury found a verdict for the plaintiff every disputed question of fact must be resolved in her favor. With that principle kept in mind we shall recite the facts which the jury would be warranted in finding.
On August 24, 1936 Alfred Watson signed a written application for insurance, or rather Part A of that application. On August 27, 1936 he was examined and passed by the company's physician as an insurable risk. In connection with that examination and forming Part B of his application, also signed by him, he made certain answers to questions asked him by the company's physician. Among them were the following, the answers being italicized:
"6. Present condition of health? Good
7. (a) When last sick? (Month) August, (Year) 1918
(b) Nature of last sickness? Appendectomy
(c) How long sick? 3 weeks ....
11. Have you had any surgical operation, serious illness or accident? If yes, give date, duration and name of ailment. Yes. Appendectomy. Dr. L. Edwards, 1918, Wilkes-Barre Gen.
....
17. Have you ever had any of the following complaints or diseases? .... Asthma .... Pneumonia .... [A] No.
18. Have you been attended by a physician during the last five years? If yes, give name of complaints, dates, how long sick, and names of physicians. No."
For the purposes of this case, the absolute truthfulness of every one of those answers is admitted.
Just preceding his signature to Part A of the application appeared the following provisions:
For the purposes of this case it is admitted that all answers to the questions in Part A, likewise, were truthful.
The policy as drawn and afterwards delivered was dated September 3, 1936 and contained, among others, the following provisions:
"1. Payment of Premiums: -- All premiums are payable, on or before their due dates, at the Home Office of the Company, and may be paid to an authorized agent or representative of the Company, but only in exchange for the Company's official premium receipt signed by the President, Vice-President, Actuary, Treasurer or Secretary of the Company and countersigned by such agent or representative by whom such payment is received ....
4. Entire Contract: -- This Policy and the application therefor, a copy of which is attached hereto as a part hereof, constitute the entire contract between the parties, and all statements made by the Insured shall, in the absence of fraud, be deemed representations and not warranties, and no statement shall avoid this Policy or be used in defense of a claim hereunder unless it be contained in the application therefor ....
8. Agents: -- No agent is authorized to waive forfeitures, to alter or amend this Policy, to accept premiums in arrears or to extend the due date of any premium."
Receipt for the first premium printed on the back of the policy was as follows, the insertions, etc., being italicized:
"Receipt of $ 61.69, the first premium hereunder, is hereby acknowledged
J. P. Bradley (an engraved signature)
Secretary
Countersigned 9-28-1936
(signature) Ben Lustig"
Lustig was the company's local agent who solicited and obtained the insurance and delivered the policy. Watson also had three industrial policies in the defendant company, collections for which were made by Lustig every Monday.
At the time of soliciting the insurance, in response to the suggestions of Watson and his wife, that they might not have the money to pay for the insurance he told them that they had thirty days after its date to pay for and accept the policy.
The company accepted the risk and issued the policy as of date of September 3, 1936. It is to be noted that the next payment would fall due on September 3, 1937. If accepted and paid for, it related back to its date. The insurance company would thereby be paid for the insurance risk accruing from the date of the policy. [1]
On Monday September 7, 1936 Lustig, the company's agent presented the policy for delivery, but was told that they did not have the money ready. The same thing happened on September 14 and September 21. But on the last mentioned date they informed him they would pay him on September 28 -- he made his calls every Monday -- within the thirty-day limit he had fixed. Up to that date (September 21) there is no...
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Metro. Life Ins. Co. v. Macaulay.
...48 S.Ct. 512, 72 L.Ed. 895; Cohen Friedlander & Martin Co. v. Massachusetts M. L. I. Co., 6 Cir., 166 F.2d 63; Watson v. Metropolitan Life Ins. Co., 145 Pa.Super. 369, 21 A.2d 503. ...