Weber v. John Hancock Mut. Life Ins. Co.

• Decision Date: 09 November 1954
• Citation: 66 N.W.2d 672,267 Wis. 647
• Parties: Maurice J. WEBER, Respondent, v. JOHN HANCOCK MUTUAL LIFE INSURANCE CO., a corporation, Appellant.
• Court: Wisconsin Supreme Court

Page 672

66 N.W.2d 672

267 Wis. 647

Maurice J. WEBER, Respondent, v. JOHN HANCOCK MUTUAL LIFE INSURANCE CO., a corporation, Appellant.

Supreme Court of Wisconsin.

Nov. 9, 1954.

This is an appeal from a judgment entered upon a special verdict in the circuit court for Kenosha county on November 20, 1953, in favor of plaintiff-respondent, Maurice J. Weber of Kenosha in the sum of $2,436.30 principal, interest and costs. The plaintiff-respondent, Maurice J. Weber, sued the defendant-appellant, John Hancock Mutual Life Insurance Company of Boston, Mass., a foreign corporation engaged in the insurance business, to recover the premium paid by him during the period of his permanent disability, under the supplementary provision of a life insurance policy issued upon his life by said insurance carrier,--the supplementary feature of the policy providing for the waiver of premiums in event of total permanent disability. The defendant-appellant counterclaimed for cancellation of the supplementary provision of the insurance policy, which relief was not granted.

The facts will be set forth in the opinion.

Bloodgood & Passmore and John P. Roemer, Milwaukee, for appellant.

Lepp & Phillips, Kenosha, for respondent.

STEINLE, Justice.

On May 16, 1947, the appellant insurance company issued a policy of life insurance upon the life of respondent, Maurice J. Weber. It was an endowment plan policy for $15,000 maturing in 12 years or upon prior death, and attached thereto was a total and permanent disability waiver of premiums supplement. The policy specifically provides that the two year incontestability limitation applicable to the policy does not apply to the supplementary provision granting benefit for total and permanent disability. The controversy concerns only the waiver of premium clause of the policy.

The written application, which is an essential part of the contract between the parties, was signed by Maurice J. Weber at Chicago, Illinois on April 1, 1947. Included in the application are the following questions and answers:

'15. Have you ever had, or consulted or been treated by a physician or other practitioner for any of the following? Epilepsy, insanity, paralysis, discharging ear, goitre, rheumatism, gout, any drug habit, nervous breakdown, dizziness, heart disease, hemorrhage from the lungs or stomach, consumption, or tuberculosis, pleurisy, cancer, tumor, indigestion, stomach or intestinal ulcer, appendicitis, gallstones, kidney stones, bladder, prostate or rectal trouble, varicose veins, sugar in the urine, high blood pressure, syphilis, or any other illness, injury, deformity, physical defect, impairment or infirmity, or any surgical operation:'

'Answer: Yes.'

'16. Have you ever had, or consulted or been treated by a physician or other practitioner for pain or pressure in the chest, shortness of breath, or palpitation?'

'Answer: No.'

'17. Have you consulted or been treated by a physician or other practitioner during the past five years?'

'Answer: Yes.'

'18. Have you ever received, or applied for treatment at, or attended, any hospital, dispensary, sanitarium, cure or other institution?'

'Answer: No.'

'If the answer to any or all of Questions 15, 16, 17, 18, is 'Yes,' specify every illness, injury, deformity or operation, with dates, duration, severity, results, the names and addresses of any physicians or other practitions, and hospitals, etc.

'Dermatitis rt. hand 2 wks. ago. Duration 10 days. Was fully recovered. Dr. Siegel of Kenosha, Wis. Unimportant.'

The insurance policy including the attached supplementary provision of waiver of premium, was delivered to Maurice J. Weber in the state of Illinois. Payment of the premium was made by him in that state.

The record indicates that the insured was 38 years of age when he applied for the policy in 1947. In the fall of 1944, he suffered from diarrhea for a week or two, and consulted his family physician, Dr. Nathaniel B. Lans of Chicago, who gave him some medicine. His condition not having improved, Dr. Lans on October 3, 1944 sent him to Grant Hospital in Chicago where an abdominal X-ray was made. Immediately thereafter, Dr. Lans advised him that he could find nothing wrong except that he was very nervous and that there was a possibility of ulcerative colitis. The physician prescribed no medication or diet or treatment. Further examination was not suggested. No laboratory tests were made, no specimens were examined. At the trial the insured denied that he at any time observed blood or mucous with reference to the condition. The situation cleared up, and no physician has ever made a positive diagnosis that he had ulcerative colitis. He consulted no other physician during the 5 year period preceding the issuance of the policy except Dr. Siegel for dermatitis. On November 12, 1949, the insured was admitted to Columbia Hospital in Milwaukee and underwent an operation for herniated cervical disc. When being prepared for the surgery, a hospital attendant wanted to give him an enema. In an effort to avoid this, Weber told the attendant that such could not be administered to him for reason stated that 'I have got colitis.' He claims to have learned that an enema was not to be given to a patient with colitis. In July of 1950, Weber was sent to the Mayo Clinic for a complete examination following the cervical disc operation. That examination included a barium enema and an abdominal X-ray. The report to him was that there was no trace of ulcerative colitis existing or having existed in the past. The insured was permanently disabled due to the cervical disc condition from the later part of October, 1949, until about March 2, 1951. He gave notice to the insurer of this disability and demanded a refund of premiums paid in amount of $1,857.60, claiming entitlement thereto under the supplementary provision of the policy. After making this claim, Weber was visited by a representative of the insurer. At the trial he admitted that at such visit while discussing his previous history, he told the representative that he was 'supposed to have had colitis,' and gave the name of the doctor whom he had consulted. The insurer refused to honor the claim. It is Weber's position that at the time of the application for the insurance he had completely forgotten his former treatment by Dr. Lans as well as the X-rays at Grant Hospital. He had remembered only the treatment for dermatitis. Dr. Lans at the time of trial was deceased. Prior to 1945 Weber had lived in Chicago and was an executive of a diaper service business there. At the time of trial he resided in Kenosha and was engaged in the laundry and dry cleaning business.

A special verdict containing sixteen questions was submitted to the jury. Four separate misrepresentations alleged to have been made by Mr. Weber on his application for the insurance policy were inquired about.

Question 1 read: Did the plaintiff falsely represent to the defendant that he was not afflicted with the disease of ulcerative colitis at any time during the five year period prior to April 1, 1947?

Question 4 read: Did the plaintiff falsely represent to the defendant that he had not consulted Dr. Lans at any time within the period of five years prior to April 1, 1947?

Question 7 read: Did the plaintiff falsely represent to the defendant that he had not attended Grant Hospital for the purpose of a barium enema and an X-ray at any time during the period of five years prior to April 1, 1947?

Question 10 read: Did the plaintiff falsely represent to the defendant that he had not been placed on a diet by Dr. Lans at any time within the period of five years prior to April 1, 1947?

Following each of questions 1, 4, 7 and 10 appeared three subsidiary inquiries. Those which followed questions 4, 7, and 10 are identical in phraseology with those (2, 3 and 13) that followed question 1, excepting that as to numerical references they pertained only to questions 4, 7 and 10 respectively.

Question 2 read: If you answer question 1 'Yes,' then answer this question: Was such false representation made by the plaintiff with actual intent to deceive the defendant?

Question 3 read: If you answer questions 1 and 2 'Yes,' then answer this question: Did the defendant rely thereon in issuing the policy of insurance?

Question 13 read: If you answer both questions 1 and 2 'Yes,' then answer this: Did such false representation materially affect the acceptance of the risk or hazard assumed by the defendant?

The jury answered 'No' to questions 1 and 10. The court answered questions 4 and 7, 'Yes.' The jury answered 'No' to questions immediately following questions 4 and 7 inquiring as to the existence of an intent on the part of Weber to deceive the insurer. All other questions of the special verdict were unanswered by the jury.

The jury's verdict consequently resulted in a determination that Weber had not falsely represented that he was not afflicted with ulcerative colitis, and had not falsely represented that he had not been placed on a diet within five years before making the application for the policy. It was determined that Weber had falsely represented that he had not consulted Dr Lans and that he had falsely represented that he had not attended Grant Hospital for the X-ray, within five years before the application was signed. It was further determined that Weber's false statements in such respects, however, were not made with intent to deceive. The jury made no determination as to materiality of risk or hazard.

Since it was in Illinois that the application for the policy was made, the delivery effected and the premium paid, under well-established rules, the substantive law of that state governs as regards the contract. Both parties so agreed, and at the trial the contract was treated in such manner by the court.

The principal consideration upon this appeal involves an interpretation of the law of the state of Illinois regarding the character of a...