Winger v. General Am. Life Ins. Co., 47837

• Decision Date: 13 February 1961
• Docket Number: No. 1,No. 47837,47837,1
• Citation: 345 S.W.2d 170
• Parties: George L. WINGER, Trustee, Respondent, v. GENERAL AMERICAN LIFE INSURANCE COMPANY, Appellant
• Court: Missouri Supreme Court

Page 170

345 S.W.2d 170

George L. WINGER, Trustee, Respondent, v. GENERAL AMERICAN LIFE INSURANCE COMPANY, Appellant.

No. 47837.

Supreme Court of Missouri, Division No. 1.

Feb. 13, 1961.

Motion for Rehearing or to Transfer to Court en Banc Denied

and Opinion Modified on Court's Own Motion April 10, 1961.

Paul Van Osdol, Jr., Guy A. Magruder, Jr., Terrell, Hess, Van Osdol & Magruder, Kansas City, for appellant. Frank P. Aschemeyer, St. Louis, of counsel.

Barnett & Skeer, David Skeer, Paul Barnett, Kansas City, for respondent.

DALTON, Judge.

This is an action to recover on two life insurance policies issued by defendant. Verdict and judgment were for plaintiff for $54,153.52. Defendant has appealed.

The policies sued on were each for the principal sum of $25,000 and were dated November 26, 1957. The policies were issued to the Midwest Bolt & Supply Company, a corporation (hereinafter referred to as Midwest) as owner and beneficiary, on the life of its then president, Oscar Rose. Thereafter, the corporation assigned both policies to plaintiff-trustee to further secure certain indebtedness of the corporation to Mrs. Eva M. Bowersock, who had transferred certain shares of stock in said corporation to the insured Oscar Rose. The policies were delivered on November 27, 1957, in exchange for two prior policies in the same amount, on the same life, dated November 21, 1957, which had been delivered to Midwest on the 26th day of November 1957. The insured committed suicide on November 29, 1957, two days after the policies sued on were delivered.

Appellant contends the court erred in refusing to direct a verdict for defendant. Appellant says the evidence clearly established (1) that Oscar Rose was not in sound health on November 26 and 27, 1957, when the policies were delivered, but was suffering from the condition which shortly thereafter caused his death; (2) that Midwest, plaintiff's assignor, violated its duty to advise defendant of the knowledge of Rose's condition of health acquired on the morning of November 27, 1957; and (3) that defendant had the right to avoid the policies for misrepresentation in the applications for insurance concerning Mr. Rose's prior medical history and treatment. Respondent, on the other hand, contends that defendant waived the provisions of the applications for the policies that the assured must be in sound health at the time of delivery of the policies; that delivery of the policies and the collection of the premiums therefor by defendant's general agents under the then known facts and circumstances, as shown by this record, constituted a waiver of the right to contend the policies were not in full force and effect from and after November 26, 1957; that defendant is estopped to interpose the mentioned defenses; and that, under the evidence favorable to plaintiff, the defendant was not entitled to a directed verdict on any of the grounds relied on. Appellant replies that defendant did not waive its asserted defenses, because (1) the evidence fails to show that Cochran, its general agent at Kansas City, 'had actual or apparent authority to waive the sound health requirement'; (2) plaintiff was bound by the provisions of the application which prohibited waiver or modification except by home office endorsement and provided that no information acquired by a representative of the company should be binding upon it unless stated in the application; and (3) Cochran and Lowry (general agents) did not know the true condition of Rose's health and could not have waived the sound health provisions of the policies.

In determining the issues presented, we must consider the evidence in a light most favorable to plaintiff and give him the benefit of all favorable inferences reasonably to be drawn from all the evidence and disregard defendant's evidence unless it aids the plaintiff's case. Highfill v. Brown, Mo.Sup., en Banc, 340 S.W.2d 656. Admitted or conceded facts, however, may not be disregarded.

Oscar Rose, 56 years of age, was married and resided with his wife in Kansas City, Missouri. For several years he had been a member of a partnership engaged in business under the name of Rose Mercantile Company. The partnership was finally dissolved April 15, 1957, and Mr. Rose began to look for other employment. By an agreement dated October 28, 1957, he and his wife Sarah Rose acquired certain shares of stock in the Midwest corporation from Mrs. Eva M. Bowersock. In connection with that transaction a further 'Collateral Trust Agreement' was entered into between Oscar Rose and wife and George L. Winger, Trustee (plaintiff-respondent) and Mrs. Bowersock, wherein it appeared that Midwest was indebted to Mrs. Bowersock and the indebtedness evidenced by a note for $50,000 with certain shares of stock pledged as security. The Collateral Trust Agreement provided that Rose and wife would promptly 'cause Midwest to obtain new life insurance upon the life of Oscar Rose in the amount of Fifty Thousand and no/100 Dollars ($50,000.00) on at least a five (5) year term basis and to deposit the same with the Trustee as additional collateral, provided such insurance is obtainable at standard rates.' Thereafter, Mr. Rose became president of Midwest and David L. Sheffrey, an attorney and the 'duly authorized agent and attorney-in-fact' for both Mr. & Mrs. Rose, became secretary of Midwest.

On October 29, 1957, Mr. Rose made application to defendant for two $25,000 policies of life insurance. The application stated the beneficiary was to be 'Mrs. Eva M. Bowersock, creditor as interest may appear, balance to Sarah H. Rose, wife.' The reverse side of the application, signed by the Cochran-Lowry Agency, as general agent of defendant, recited: 'Al Haas broker has known Mr. Rose & handled his insurance for 25 years. * * * Dr. Ready OK'd Dr. Shifrin & we are requesting his appointment.'

On October 29, 1957, Dr. Shifrin gave Mr. Rose the medical examination for the insurance and completed Part II, the medical portion, of the insurance application. On this form, witnessed by Shifrin, Question 19(f) asked if the applicant had 'ever had any of the following or symptoms thereof? Epilepsy, Fainting Spells, Mental Disorder, Other Disorder of Brain or Nervous System?' This question was answered 'No.' Question 19(h) which asked if the applicant had ever been a patient in a hospital, clinic or sanitarium, was answered 'Yes.' Question 20 asked the name of every physician or practitioner consulted during the past five years and the details of any question answered 'Yes' under 19. The answer given was that Mr. Rose had consulted Dr. Louis Forman for nervousness and Dr. A. Shifrin for routine checkup; that this was in February of 1957, for a duration of three weeks, no operation involved, with results of 'excellent, good.' In answer to Question 27, Dr. Shifrin stated that he had known Mr. Rose 'as patient 3 yrs.-well.' Question 31(e) asked if there was any evidence of past or present disease of brain or nervous system; this was answered 'No.' This application also included a waiver of the protection of the physician-patient relationship, including the following: 'I expressly authorize and request any hospital, clinic, physician, surgeon, nurse, practitioner or other person who has attended, examined, or treated me, or who may hereafter attend, examine or treat me, or in which I have been or may hereafter be a patient, to furnish the General American Life Insurance Company with complete information regarding the past, present, or future state of my health * * *.'

The applications for the original policies, as signed by Mr. Rose on October 29, 1957, and the applications for the policies sued on dated November 26, 1957, as signed by Oscar Rose and Midwest, all carried in Part I of the applications the following provisions: '(2) No information acquired by any representative of the Company shall bind it unless stated in this application. No printed provision hereof shall be modified or waived except by an endorsement signed by an Officer at its Home Office. * * * (4) If the amount stated in (3) hereof has not been paid in cash with this application, no contract of insurance shall take effect until a policy has been issued by the Company, delivered to and accepted by the Proposed Owners of such policy, and an amount equal to the full first premium thereon has been paid in cash to the Company, all during the lifetime and continued sound health of the Proposed Insured.' Part (3) mentioned an amount equal to the first full premium for the insurance applied for.

As stated, the original policies were issued on the first application and were dated November 21, 1957. They arrived for delivery on November 25. At Mrs. Rose's direction, since Mr. Rose was in a hospital, defendant's agent was referred to attorney Sheffrey. On the same date, when Mr. Lowry, of the Cochran-Lowry Insurance Agency, called Sheffrey, Sheffrey told Lowry that Mr. Rose was in the hospital with a 'nervous breakdown' and that the policies were Midwest's not Mr. Rose's. Lowry explained how the policies were issued and said he would have to call Cochran, who was out of town, and advise him about Rose being in the hospital and would let Sheffrey know. Lowry then called a second time and asked if it would be all right to talk to Rose's doctor, and Sheffrey said, 'Certainly.' Lowry, later, called Sheffrey a third time and said that he had good news; that he had talked to Dr. Shifrin and had been told that Rose did not have a nervous breakdown but had 'nervous exhaustion; that the man was in perfect physical condition'; 'that he was physically sound and that what the man needed was a rest'; that Rose had had this condition before and it had been reported on the insurance application; and that there was no reason from a health standpoint why the policies could not be delivered. Sheffrey then again explained to Lowry why the policies had to be issued to Midwest and then be...