Court Opinion

ID: 3516882
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:28:16.592928+00
Date Added: 2024-06-11T13:21:33.553559
License: Public Domain

In the absence of proof that an applicant for life insurance has knowingly made false statements in the application as to the condition of his health, the same rule should be applied as to the liability of the insurer in cases where a medical examination is waived as where the applicant has been examined by a physician. In each instance the insurance company determines the method by which it will ascertain the facts as to insurability. In one case it has the physician, as its own agent, to ascertain the applicant's state of health by asking him questions, recording the answers and a physical examination of his person. In the other, it has its insurance agent ask the questions, record the answers in the application, observe the physical condition of the applicant as reflected by a personal observation of his appearance as to good health, and make a recommendation as to the acceptance of the risk. A medical examination having been waived by the insurance company in the case at bar, it should not now be permitted to avoid the payment of the death claim because of its failure to obtain the knowledge or information that such an examination would have disclosed, unless it can show that the applicant intentionally concealed the true facts as to the state of his health at the time the application for the policy was taken, by knowingly making false statements in regard thereto.
It is true that the policy itself contains a provision to the effect that it will not be enforceable "if the insured is not alive or is not in sound health on the date hereof," meaning the date of delivery. However, a provision in this and other language of the same import has been repeatedly held by this Court not to relate to anything other than a change in the condition of health between the date of the application and the date of the policy. Fidelity Mutual Life Ins. Co. v. Elmore, 111 Miss. 137, 71 So. 305; New York Life Ins. Co. v. Smith, 129 Miss. 544, 91 So. 456; and New York Life Ins. Co. v. Rosso, 154 Miss. 196, *Page 599 122 So. 382, cited in one of the controlling opinions herein. Moreover, this language of the provision itself shows on its face that it has reference to some change that might intervene from the date of the application and the delivery of the policy. The words, "if the insured is not alive . . . on the date hereof," obviously had reference to some change in his condition that might occur between the date of the application and the delivery of the policy, since the agent certainly knew that he was not dead when he made the application, and it is likewise clear that the remainder of the provision, "or is not in sound health," was intended to protect the insurance company against any changed condition in the health of the applicant between the time he had been recommended by the agent as a good risk and the date of the issuance and delivery of the policy. At any rate, this Court so construed the meaning of such a clause in the cases hereinbefore cited. In the Elmore case, supra, the Court said that the requirement that the insured be in sound health at the time the policy should take effect "means that the [assured's] health had not undergone any change between the date of the application for and the delivery of the policy." Likewise, in the Smith case, supra, the Court construed a provision that the policy should not take effect until the payment of the first premium, and delivery to the insured in his lifetime, and while in good health, related solely to a change in the condition of his health from the date of the application to the date of the policy, a provision identical in substance with the one contained in the policy before us. But the majority opinion herein seeks to distinguish those cases from the instant case, because there was an examination of the applicant in each of those cases by a doctor, and the policies were issued as a result of such an examination; and that the doctor was the agent of the insurance company. I am unable to thus distinguish those cases from the case at bar. While in those cases the insurance company selected the doctor as its agent, to secure the information *Page 600 
as to the condition of the health of the applicant by asking him questions, recording the answers, and observing his physical condition, it likewise selected its insurance agent to ask the questions in regard to whether the applicant was then suffering from the tuberculosis that later caused his death, and whether he was suffering from other diseases mentioned in the application; and permitted its said agent to make a recommendation as to the insurability of the applicant, based on his personal observation of his physical condition and good health. Moreover, the cases referred to were determined by the meaning of the language employed in the policy, requiring that the applicant should be in good health at the time of the delivery of the same, and those decisions do not purport to be based upon the fact that in those cases there had been a medical examination. In other words, the Court was construing the meaning of the provision in the policy, and I am unable to see how such meaning could be affected by the fact that in one instance the insurance company procured its information as to the health of the applicant through a physician as its agent, and in another instance procures such information through its soliciting agent, to avoid the expense of a medical examination. The courts have not assigned the fact that a medical examination was made as the basis for construing such a provision in the policy to relate solely to a change in the state of the applicant's health between the date of the application and the delivery of the policy.
This case seems to have been tried in the court below by the plaintiff on the theory that there was a common law estoppel against the insurance company making the defense of non-liability on the ground that the applicant had tuberculosis when the insurance was applied for, and where no false representation was knowingly made by the applicant to negative such fact. The case was submitted to the jury on that issue, and in my opinion under proper instruction, resulting in a verdict for the plaintiff. *Page 601 
Some emphasis is also laid upon the fact that a copy of the insured's application was not delivered to him with the policy, as required by section 5174, Code of 1930, which provides that in case of such default the insurance company, "shall not be permitted in any court of this state to deny that any of the statements in said application are true." That statute, in full, reads as follows: "All life insurance companies doing business in the state of Mississippi shall deliver to the insured with the policy, certificate or contract of insurance in any form a copy of the insured's application, and in default thereof said life insurance company shall not be permitted in any court of this state to deny that any of the statements in said application are true."
No copy of the application in the present case was delivered to the insured with the policy, nor is the application referred to in the policy as being a part of the contract of insurance. It will be noted, however, from the language of the statute, that the application of its provisions are not made to depend upon whether the application is referred to in the policy as being a part thereof, nor is the application of the statute made to depend upon whether the applicant has been examined by a physician, or whether such examination has been waived. It is true that in the case of Metropolitan Life Ins. Co. v. Scott,160 Miss. 537, 134 So. 159, the Court held that the statute was inapplicable to any provision where there is no language or provision in the policy indicating the purpose or intent on the part of the insurance company to make anything found in the application a part of the contract. Thus it will be seen that the decision in that case seeks to engraft an exception upon the statute as written, and permits the insurance company to deny that any statements in the application are true when the policy itself contains the requirement that the insured be in good health at the time of the delivery of the policy. *Page 602 
In other words, it was held that the insurance company, by inserting such a provision in its policy, may introduce evidence to deny the truth of statements contained in the application, if at the same time such evidence disproves the good health of the insured at the time of the delivery of the policy. The case, however, did not hold that the requirement that the insured shall be in good health on the date of the delivery of the policy relates to anything other than a changed condition in the insured's health at the time of the application to the date of such delivery. The case did not overrule the former decisions hereinabove referred to, nor is it controlling to require us to depart from the rule announced in those cases as to the meaning of such a provision in the contract.
But aside from the effect to be given to this statute, I am of the opinion that the evidence sustains the plea of estoppel at common law, and that the judgment of the court below should have been affirmed.
It is a matter of common knowledge that there is a great amount of life insurance now in force in this state where medical examinations were waived, both by old line life insurance companies, and under health and accident benefit insurance contracts, especially on the lives of young people, where the holders believe in good faith that they are protected, unless it can be shown by the insurer that false statements were knowingly made as to the health of the applicant when the applications were taken, and in my opinion an insurance company should not be permitted to defeat death claims in such cases by showing that death was caused by some illness which ante-dated the application, but which was unknown to the applicant at the time, by merely offering to refund the premiums paid. No one would be willing to sacrifice and pay premiums from year to year under such circumstances. If the insurance companies, in order to avoid the expense incident to a medical examination, should choose to accept the risk on the recommendation of their *Page 603 
soliciting agents, they should be bound by such acceptance, in the absence of proof that the applicant has knowingly made those representations in order to obtain the insurance.
In the case of National Life  Accident Ins. Co. v. Hugger,158 Miss. 686, 131 So. 75, cited in the majority opinion on this suggestion of error, the evidence of the plaintiff showed that at the time the insured made the application he knew he was not in good health. If so, he knowingly made false statements therein to the contrary, and therefore no recovery could be allowed on the policy. The court below recognized this to be the law, and instructed the jury accordingly, as shown by instruction No. 3, set forth in the main opinion herein.
Referring again to the effect that should be given to section 5174, Code of 1930, hereinbefore quoted, attention should be called to the fact that in the Scott case, supra, this Court predicated its decision upon the holding of the Iowa Court in the case of Kirkpatrick v. London Guarantee  Accident Co., Ltd.,139 Iowa 370, 115 N.W. 1107, 1108, 19 L.R.A. (N.S.) 102, saying that the Iowa statute under consideration, section 1741, is practically the same as ours, when in fact the statute of that state limited its own application to policies by the terms of which the application is "made a part thereof . . . or referred to therein, or which may in any manner affect the validity of such policy," whereas our statute is not so limited by its terms or by necessary implication. Nor is it contended by the appellant in the case at bar that the application "affects the validity of the policy," but non-liability is sought to be predicated solely upon the fact that the insured was not in good health at the time of its delivery when the policy itself required that he should be. Moreover, this Court expressly held in the cases of Sovereign Camp of W.O.W. v. Farmer, 116 Miss. 626, 77 So. 655, and New York Life Ins. Co. v. Rosso, 154 Miss. 196, 122 So. 382, 386, that our statute now under consideration is substantive law, and that its provisions *Page 604 
"became a part of the contract here entered into to the same extent as if appellant had expressly agreed in its certificate [the policy] not `to deny that any of the statements in said applications are true.'" By the same token the appellant in the case at bar failing to comply with this requirement of the substantive law, should not be permitted to introduce proof to deny the truth of the statements contained in this application, which was then in evidence as a part of the plaintiff's case, on the ground that such proof would likewise show that a provision in the policy itself also required that the insured should be in good health. If the insurance company had, by the force of this statute, agreed not to deny the statements contained in the application, as the Court held in the cases above cited, then it cannot offer proof the effect of which would be to deny such statements by the expedient of invoking a provision in the policy itself, which the Court has thrice held to relate only to a change in the state of the applicant's health between the date of the application and the delivery of the policy, and especially when no such change is claimed to have occurred.
But aside from this statute, I am of the opinion, as hereinbefore stated, that the jury was justified in finding that the insurance company is estopped in this case under the rule of estoppel at common law, as embodied in the instructions granted in favor of the plaintiff.