Court Opinion

ID: 9856625
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:52:30.474082+00
Date Added: 2024-06-11T09:40:10.206786
License: Public Domain

*206OxnER, Justice
(dissenting).
I am unable to agree with the conclusion reached by a majority of the Court that the only reasonable inference warranted by the evidence is that the certificate or policy of insurance involved in this action was procured by fraudulent misrepresentations on the part of the assured. I am clearly of opinion that this question should have been submitted to the jury.
It is conceded in the majority opinion that the statements made by the insured constituted representations and not warranties. The legal effect of a representation is quite different from that of a warranty. Nix v. Sovereign Camp W. O. W., 180 S. C. 153, 185 S. E. 175. It is held in some jurisdictions that a material misrepresentation made by an applicant for life insurance, in- reliance on which a policy is issued to him, avoids the policy, even though made through mistake and in good faith. But under our decisions the good faith of the insured is a vital consideration. The rule applied in this State is succinctly stated in Johnson v. New York Life Insurance Co., 165 S. C. 494, 164 S. E. 175, as follows:
“Where a statement of fact in an application is only a representation, its mere falsity is not sufficient to avoid the policy, its materiality and the good faith of the applicant in making it being important considerations. Under the issues made in the case at bar, it would be necessary for the defendant to show that the statements in the application relied on to defeat the policy were untrue, that their falsity was known to the applicant, that they were material to the risk and relied on- by the insurer, and that they were made with intent to deceive and defraud the company.
* # *
“Finally, the intent with which representations or misstatements of facts are made is a thing that is locked up in the heart and consciousness of the applicant. It may be shown by his express words, or it may be deduced from his *207acts and the facts and circumstances surrounding the making of the misrepresentations, though on this question the mere signing of the application containing the answers alleged to be false is not conclusive.”
Assuming, as the evidence rather conclusively shows, that at the time the insured made this application he had a heart condition rendering him uninsurable, I do not think it can be said as a matter of law that -this condition was known to and concealed by him with the intent .to defraud the company. It seems to me that there are strong circumstances negativing any such intent, which required the submission of this issue to the jury.
The insurance was written on the solicitation of respondent’s agent. The application was made by assured when he appeared to be in good health and was regularly employed. There is no testimony to the effect that insured was ever told that there was anything wrong with his heart. Dr. Cutchin, the attending physician, unequivocably stated that insured “thought he had acute indigestion”. His testimony certainly warrants the inference that insured was unaware of any defective heart condition. This being true, it is difficult to perceive how it can be said that he knowingly concealed this disease from respondent. The symptoms related by him to Dr. Cutchin might easily incite suspicion of heart disease in the mind of a physician, but would not necessarily alarm a layman of limited education with no knowledge of medicine. It is true that Dr. Cutchin testified that he told the insured to regulate his life, discontinue hard work and stop worrying, but evidently the insured did not think it was necessary to follow these suggestions because after the policy was issued, he continued to engage in heavy work as a butcher in a grocery store.
Assuming that the circumstances were such as would have led a person of ordinary prudence to believe that he had heart disease, fraud cannot be predicated upon imputed knowledge. Respondent’s examining physician, who had known the insured for twenty-five years, found nothing *208wrong with his heart and recommended him as a “first class” risk. Can it be said that insured should have known and disclosed to respondent what this physician failed to find ?
It is contended and the lower court held, that assuming the insured did not know he had heart trouble, he did know and should have disclosed to respondent that during the previous year he had been attended by a physician. There is no showing that insured was ever confined to his home or visited there by Dr. Cutchin. The consultations with this physician were probably made at his office., If the insured thought his trouble was indigestion, he might easily have regarded this as an inconsequential, temporary ailment which heed not be reported. In Krauza v. Golden Seal Assurance Society, 221 App. Div. 380, 223 N. Y. S. 143, 145, the Court said: “The applicant’s consultation with a physician would be material as a matter of law only if the consultation were for a physical condition which left some permanent weakness or indicated a predisposition to serious malady. If the consultation were for a temporary functional disorder, without permanent effect, it might not be a material fact, and might not reasonably be thought, by an applicant to whom such a question is put as was answered by the applicant here, to have been within the intent of the question.”
On direct examination, the soliciting agent of respondent testified: “I asked him (insured) about the condition of his heart and he said that there wasn’t anything serious wrong that he knew of, and I said I would have to take him to a medical doctor to examine him.” Such a statement, if made, was sufficient to have put this agent on inquiry as to possible heart disease, which if pursued with due diligence, might have led to the knowledge of insured’s condition. Abercrombie v. Pilot Life Insurance Co., 214 S. C. 350, 52 S. E. (2d) 400, 402. Moreover, this statement would certainly not be consistent with the contention of respondent that the insured sought to conceal his physical condition. As stated in the Abercrombie case, a statement of this nature “bespeaks honesty and negatives the charge of fraud.” An*209other circumstance negativing fraud is that when insured was asked in the application to give the name and address of his family physician, he answered “Dr. J. H. Cutchin, Easley, S. C.”, who could have given full information as to the applicant’s physical condition.
It is stated in the majority opinion: “whether the deceased knew he had a serious heart disease may have been an issuable fact; that he concealed. medical attention therefor was not, under all of the evidence.” It is true that the application contains a misstatement with reference to the medical attention which insured received from Dr. Cutchin and apparently the Court infers a fraudulent intent as a matter of law from such misstatement. At least there is no other evidence of such intent. But I think under the circumstances of this case that was a question for the jury to determine. As pointed out in Johnson v. New York Life Insurance Co., supra, and as consistently held by this Court, the mere fact that the insured signed an application containing misstatements of fact with reference to his medical history is not conclusive. It must further appear that such misstatement was made with intent to deceive and defraud the insurer. In the majority opinion little, if any, consideration is given to this element of intent. If insured intended to defraud the Society by concealing the fact that he had consulted Dr. Cutchin, why did he give the name and address of Dr. Cutchin in his application? If he had such intent, why did he tell the soliciting agent, as respondent claims he did, that “there wasn’t anything serious wrong (with his heart) that he knew of” ? No explanation of these circumstances can be found in the majority opinion.
The views herein expressed are fully sustained by the following decisions: Sligh v. Sovereign Camp W. O. W., 117 S. C. 437, 109 S. E. 279; Rogers v. Atlantic Life Insurance Co., 135 S. C. 89, 133 S. E. 215, 45 A. L. R. 1172; Sirgany v. Equitable Life Assurance Society, 173 S. C. 120, 175 S. E. 209; Suggs v. New York Life Insurance Co., 174 S. *210C. 1, 176 S. E. 457; Crumel v. Metropolitan Life Insurance Co., 179 S. C. 338, 184 S. E. 169.
I am unable to reconcile the foregoing cases with the conclusion reached in the majority opinion. Illustrative of what they hold is the case of Sirgany v. Equitable Life Assurance Society, supra. [173 S. C. 120, 175 S. E. 211.] In that case the application for insurance was made in June, 1929, and the insured died on May 4, 1930, of chronic lymphatic leukemia, from- which she had probably suffered for several years. In the application this disease -was not disclosed and the insured stated that within the preceding five years she had only suffered from minor ailments with good recovery| In holding that the issue of fraud was properly submitted to the jury, the Court said:
“We have read with painstaking care the entire record and are constrained to hold that the trial judge properly submitted the case to the jury. While, as already indicated,-Drs. Buist and Wilson expressed the opinion that Mrs. Sarkis must have known that she was not a well woman, they both stated positively that they had not disclosed to her the nature of her disease or that it would prove fatal. In addition, Dr. Buist testified that he had known her for about twenty years, that he had always found her perfectly honest, and that her general reputation was good. Dr. Frampton, who it must be assumed made a proper examination of the applicant in order to determine whether she was a good risk for insurance, was unable to find anything wrong with her. As more than one inference could be drawn from the testimony, the court could not say, as a matter of law, that Mrs. Sarkis intended to deceive the company and to perpetrate a fraud upon it by her answers, which were representations and not warranties, to the questions propounded by the medical examiner.
“The appellant argues that this case is controlled by the principles announced in Johnson v. New York Life Insurance Company, 165 S. C. 494, 164 S. E. 175. We think, however, that the cases are easily distinguishable.1 In the *211Johnson Case the insured stated in his application that he did not drink spirits or other intoxicants in any quantity at all; that he had only taken an occasional drink in the past, and had not taken any of .them to excess in the last five years. The undisputed testimony, as stated in the opin7 ion, showed that, during the five years immediately preceding the signing of the application, Johnson had been treated by his physician for alcoholism on ten different occasions, on one of which he was confined to the hospital, that some of such periods of illness would last from one to four weeks, and that he was advised by one of the attending physicians to discontinue the use of alcohol as the physician thought it would ruin his' health. This court held that the facts were clearly of such nature that Johnson could not fail to know them when answering'the question in the application as to his consultation of a physician; certainly they were of such nature that he would be conclusively presumed to know them.
“In the case at bar the facts testified to by the several witnesses present, as disclosed by the evidence recited, a different situation. The case is more nearly like Rogers v. [Atlantic Life] Insurance Company, 135 S. C. 89, 133 S. E. 215, 45 A. L. R. 1172, where the defendant complained that the applicant answered falsely the questions relating to previous ailments and surgical operations, with the intent to deceive and defraud the company into the issuance of the policy applied for by him. While there was testimony to the effect that the insured had been operated on for cancer, it was undisputed that he had not been told by the surgeon who performed the operation, or by any one else, that he had cancer; and the physician who examined him for the company testified that he found no evidence of cancer or, as happened in the present case, anything that indicated that Rogerá at the time was not in good physical condition or was not a good risk for life insurance. In that case, as in the present case, testimony was offered as to the good character and honesty of the insured. The court held that it was for the jury to say, under all the testimony, whether *212the insured, at or before the time he answered the question, had cancer, and whether, when answering the questions, held to be representations and not warfanties, he knew that he had or had had cancer, if this were the case, and whether he answered as he did for the purpose of defrauding and deceiving the insurance company.”
I would reverse the judgment appealed from and remand the case for trial by jury on the issue of fraud and deceit
Tayeor, J., concurs.