Opinion ID: 1546050
Heading Depth: 1
Heading Rank: 4

Heading: Application for Accident or Disability Insurance

Text: I hereby apply for insurance in the Sentinel Life Insurance Company and for that purpose make the following statements:    14. (a) Are you sound physically and mentally? Yes.    15. Have you now any ailment, disease or disorder, or have you consulted a physician for any cause in the past 10 years? None.    24. Are the Answers to the Questions in This Application Your Own Answers and do you understand and agree that the right to recovery under any policy which may be issued upon the basis of this application shall be barred in the event that any one of the foregoing statements, material either to the acceptance of the risk or the hazard assumed by the Company, is false or made with intent to deceive;    Dated at Kansas City this 7 day of Oct., 1931. (Italics ours.) The issues presented by the pleadings were these: 1. Did the insured incur a rupture or perforation of a duodenal ulcer on November 25, 1931, and if so, was it an accidental injury? 2. Was his death on December 2, 1931, the result thereof? 3. Was he unsound physically on October 7, 1931, in that he then had a duodenal ulcer? 4. If he had such ulcer on October 7, 1931, did he know or have reason to believe he was so afflicted? 5. Had he consulted any physician in the ten years prior to October 7, 1931, for duodenal ulcer? The court made a general finding in favor of the plaintiff and gave judgment accordingly. The evidence, viewed in a light most favorable to plaintiff, established these facts. On November 25, 1931, the insured emptied a 50-pound sack of flour into a bin about five feet high. Shortly thereafter he was seized with very severe pains in the upper abdomen which prostrated him. Insured was removed to the hospital at Steamboat Springs, Colorado, and attended by Doctors Willett and Sloan, who decided that an abdominal operation was necessary. Dr. Willett performed the operation and Dr. Sloan assisted. Upon opening the abdominal cavity, they found a ruptured duodenal ulcer, and performed a gastroenterostomy. There was considerable serous exudate from the stomach that had escaped through the perforation into the abdominal cavity. An operation was absolutely necessary, and a gastroenterostomy was the proper operation. During three or four days following the operation insured made good progress toward recovery. On November 30 he developed postoperative pneumonia from which he died on December 2, 1931. The shock of the operation and the anaesthetic lowered insured's vitality and caused him to contract pneumonia. The higher the point of the operation in the abdominal cavity, the greater is the probability of postoperative pneumonia. While pneumonia was the terminal cause of insured's death, the perforated ulcer set in motion and was the proximate cause of a natural sequence of events that resulted in insured's death, namely, the operation with its attendant shock, reduced vitality, and postoperative lobular pneumonia. Insured was not aware that he was suffering from an ulcer at the time he made the application for the policy of insurance, and the statement in his application that he was physically and mentally sound, if untrue, was made by him in good faith and without knowledge that it was not true. Insured had not consulted a physician concerning a duodenal ulcer within ten years prior to the date of the application. Policies of accident insurance may be divided generally into two classes: (1) those that insure against accidental result, and (2) those that insure against the result of an accidental cause. There is a well recognized distinction between these two classes. To come within the coverage of the second class, the means or cause must be accidental, while to come within the coverage of the first class it is sufficient if the result or effect is accidental. [1] The policy in the instant case insures against accidental result. Delaney v. Modern Acc. Club, 121 Iowa, 528, 97 N. W. 91, 63 L. R. A. 603; North American Life & Acc. I. Co. v. Burroughs, 69 Pa. 43, 8 Am. Rep. 212. Webster's New International Dictionary defines accident as follows: An event that takes place without one's foresight or expectation; an undesigned, sudden, and unexpected event. It defines accidental as happening by chance, or unexpectedly; taking place not according to the usual course of things. In United States Mut. Acc. Ass'n v. Barry, 131 U. S. 100, 121, 9 S. Ct. 755, 759, 33 L. Ed. 60, the court defines accidental as follows: `Happening by chance; unexpectedly taking place; not according to the usual course of things;' or not as expected. See also Continental Cas. Co. v. Willis (C. C. A. 4) 28 F.(2d) 707, 709, 61 A. L. R. 1069. Here the rupture or perforation of the stomach wall at the point of the ulcer was an event that took place unexpectedly and not according to the usual course of things. It was clearly an accidental result. It set in motion and was the natural and proximate cause of a sequence of events that resulted in insured's death, namely, the operation, reduced vitality, and postoperative lobular pneumonia. We conclude that insured's death resulted from an accidental injury, and was within the coverage of the policy. A warranty in the law of insurance is a statement or stipulation in the policy which is breached unless absolutely true or literally fulfilled, and the breach of which results in the avoidance of the insurer's liability upon the policy. Capital Fire Ins. Co. v. King, 82 Ark. 400, 102 S. W. 194, 195; 2 Joyce on Insurance, § 1970; Union Nat. Bank of New Orleans v. Manhattan Ins. Co., 52 La. Ann. 36, 26 So. 800, 806; Shamrock Towing Co. v. American Ins. Co. (C. C. A. 2) 9 F.(2d) 57, 58. A warranty may be either affirmative or promissory. The former affirms the existence of a fact at the time the policy is entered into; the latter requires that something be done or not done after the policy has taken effect. Orient Ins. Co. v. Van Zandt-Bruce Drug Co., 50 Okl. 558, 151 P. 323, 324; Rosenthal Cloth. & Dry Goods Co. v. Scottish Union & Nat. Ins. Co., 55 W. Va. 238, 46 S. E. 1021. A breach of warranty does not prevent a contract from taking effect, but avoids the insurer's liability thereunder. Hurt v. New York Life I. Co. (C. C. A. 10) 53 F.(2d) 453, 454; Everson v. General F. & L. Assur. Corp., 202 Mass. 169, 88 N. E. 658; Chambers v. Northwestern Mut. L. Co., 64 Minn. 495, 67 N. W. 367, 368, 58 Am. St. Rep. 549. A representation is an oral or written statement of a fact or a condition affecting the risk, made by the insured to the insurer, and which precedes and is not a part of the contract, unless it is expressly stipulated that it shall be. Ætna Life Ins. Co. v. McCullagh, 185 Ky. 664, 215 S. W. 821, 823; Maryland Casualty Co. v. First State Bank of Dewar, 101 Okl. 71, 223 P. 701, 703; Cooley's Briefs on Insurance (2d Ed.) vol. 3, p. 1865; Id., vol. 4, p. 3005. Unless it clearly appears that the parties intended statements made by an insured in his answers to questions in the application for insurance to be warranties, they will be construed to be representations. Phnix Life Ins. Co. v. Raddin, 120 U. S. 183, 189, 7 S. Ct. 500, 30 L. Ed. 644; Ætna Life Ins. Co. v. Moore, 231 U. S. 543, 557, 558, 34 S. Ct. 186, 58 L. Ed. 356; Fidelity Mut. Life Ass'n v. Jeffords (C. C. A. 5) 107 F. 402, 408, 53 L. R. A. 193. A misrepresentation will not constitute a defense to an action on a policy of insurance unless it was intentionally untrue or was made with a reckless disregard for its truth or falsity. [2] The questions and answers in the application are designated in the policy as statements. The policy says that the insurance contract is made in consideration of a first premium of $32.50 and policy fee of $5.00 and of the statements in application for this policy. The application reads: I hereby apply for insurance in the Sentinel Life Insurance Company and for that purpose make the following statements. Then follow the questions and answers. Following those is the agreement: That the right to recovery    shall be barred in the event that any one of the foregoing statements, material either to the acceptance of the risk or the hazard assumed by the company is false, or made with intent to deceive.  (Italics ours.) It is well settled in the national courts that contracts of insurance should be construed according to the sense and meaning of the terms the parties have used, that those terms ought to be given their plain, ordinary and popular meaning, and that it is only where, because of ambiguity in the language employed, the contract is fairly susceptible of two interpretations  one favorable to the insured and the other favorable to the insurer  that the rule of liberal construction in favor of the insured may be applied. Chase v. Business Men's Assur. Co. of America (C. C. A. 10) 51 F.(2d) 34, 35, and cases there cited; East & West Ins. Co. of New Haven, Conn., v. Fidel (C. C. A. 10) 49 F.(2d) 35, 38. But if the language of the policy is reasonably open to two constructions, the one more favorable to the insured will be adopted. Aschenbrenner v. U. S. F. & G. Co., 292 U. S. 80, 85, 54 S. Ct. 590, 78 L. Ed. 1137; Stipcich v. Metropolitan Life Ins. Co., 277 U. S. 311, 322, 48 S. Ct. 512, 72 L. Ed. 895; Mutual Life Ins. Co. v. Hurni Pack. Co., 263 U. S. 167, 174, 44 S. Ct. 90, 68 L. Ed. 235, 31 A. L. R. 102; Norwich Union Fire Ins. Soc., Ltd., of Norwich v. Cohn (C. C. A. 10) 68 F.(2d) 42, 94 A. L. R. 494; Sanderson v. Postal Life Ins. Co. of N. Y. (C. C. A. 10) 72 F.(2d) 894, 898; Southern Surety Co. v. MacMillan Co. (C. C. A. 10) 58 F.(2d) 541. Webster's New International Dictionary defines false as follows: 3. Not according with truth or reality; not true; erroneous; as, a false statement. 4. Not genuine or real; assumed or designed to deceive; intentionally or wilfully untrue; counterfeit; artificial; hypocritical; sham; feigned; as false tears; false modesty; false colors; false jewelry; a false check or entry; false teeth; false gods;  in this sense often distinguished from erroneous or mistaken.  Thus it will be seen that false is a word of double meaning. In Moulor v. American Life Ins. Co., 111 U. S. 335, 345, 4 S. Ct. 466, 471, 28 L. Ed. 447, the court said: In one sense, that only is true which is conformable to the actual state of things. In that sense, a statement is untrue which does not express things exactly as they are. But in another and broader sense the word `true' is often used as a synonym of honest, sincere, not fraudulent. It follows that false should be construed to mean intentionally or wilfully untrue. [3] There was substantial evidence supporting the finding of the court that if the insured had a duodenal ulcer on October 7, 1931, the date he made application for the insurance, he did not know or have reason to believe he was so afflicted. His answer, not being intentionally or wilfully false, even if not literally true, constituted no defense to the policy. The judgment is affirmed.