Court Opinion

ID: 3891870
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:22:07.608408+00
Date Added: 2024-06-11T07:42:13.155913
License: Public Domain

ON PETITION FOR A REHEARING.
In this case — a suit in equity involving the validity of a life insurance policy — five issues of fact were submitted to a jury demanded by the defendant, and the findings of the jury upon each and all of the issues were favorable to the defendant, whereupon the chancellor dissolved a temporary injunction theretofore granted to the complainant, the National Life 
Accident Insurance Company, and dismissed the complainant's bill at its cost. *Page 549
The complainant appealed to this court, and on a former day of the present term an opinion was handed down and a decree entered in and by which it was held and adjudged that there was material evidence to support the jury's findings on the issues numbered 1 and 4, but that there was no material evidence to support the jury's findings on the issues numbered 2, 3, and 5. Thereupon the decree of the chancery court was reversed, the findings of the jury were set aside, and the cause was remanded to the chancery court for a new trial upon all of the issues, on the theory that "where a new trial is granted as to some issues, it must be granted as to all," if the issues are all material. Gibson's Suits in Chancery (3 Ed.), sec. 549.
Each of the parties has filed a petition for a rehearing.
The relief sought by the bill and amended bill of the complainant insurance company was the cancellation and surrender of a policy of insurance issued by complainant on the life of Harry Sudekum, the intestate of the defendant administrator, because of alleged false statements and misrepresentations of material facts, in the insured's written application for said policy, and an injunction restraining and inhibiting the further prosecution of a suit at law brought by defendant administrator to recover the face amount of said policy, with interest and penalty. A statement of the contents of the pleadings is made in our former opinion, to which we refer without repetition of such statement.
Through its petition for a rehearing, the insurance company insists that each of the issues submitted to the jury was determinative of the whole case, in that a finding in its favor on any one of the issues would entitle it to the relief sought by its bill, and that, inasmuch as this court held that there was no material evidence to support the jury's finding in favor of defendant on three of the issues, the cause should not have been remanded for a new trial, but the relief prayed for in complainant's bill should have been granted and the policy in question canceled and surrendered.
In order that the precise question presented by the petition of the insurance company may be better understood, it will be well to state briefly the rulings of this court in our former opinion with respect to the complainant's motion for peremptory instructions below and the findings of the jury on the issues.
We held that, upon the evidence, it was proper to submit issue No. 1 to the jury, and that there was material evidence tending to support the jury's finding that the applicant did not make false answer to question No. 10 in his application, which answer was, in effect, that his use of intoxicants was limited to a "social drink four or five times a year."
With respect to issue No. 2, we held that there was no material evidence to support a finding that the applicant did not make false *Page 550 
answer to question No. 14 in his application, which answer was, in effect, that he had never been an inmate of a hospital or sanitarium.
On issue No. 3, we held that there was no material evidence to support a finding that the applicant did not make false answer to subsection A of question 20 in his application, which answer was, in effect, that he had never had any ailment of the brain or nervous system.
We held that, upon the evidence, it was proper to submit issue No. 4 to the jury and that there was material evidence to support a finding that the applicant did not make false answer to question No. 20(F) in his application, which answer was, in effect, that he had never consulted a physician for any ailment or disease "not included above" (referring to the preceding portion of the application).
On issue No. 5, we held that there was no material evidence to support a finding that the applicant did not make false answer to question No. 21 in his application, which answer was, in effect, that the only physician he had consulted was Dr. M.G. Buckner, and that he had consulted Dr. Buckner occasionally for the headache only.
We held that, upon the undisputed evidence, the complainant's motion for peremptory instructions in its favor on the issues numbered 2, 3, and 5 should have been sustained by the chancellor.
It is insisted for the insurance company that, inasmuch as this court has held that the jury should have been directed to find (1) that the applicant made false answer to question No. 14 in his application, when he stated that he had never been an inmate of a hospital or sanitarium; (2) that the applicant made false answer to question 20(A), when he stated that he had never had any ailment or disease of the brain or nervous system; and (3) that the applicant made false answer to question 21 in his application, when he stated, in effect, that he had never consulted any physician except Dr. M.G. Buckner and him only for headaches, the complainant is entitled to the relief prayed for in its bill, irrespective of the finding of the jury on the other two issues.
It is conceded, however, that the materiality of these misrepresentations, that is, whether they increased the risk involved in the issuance of the policy, is a question of law for the court to decide; and this concession is amply justified by the authorities. Mutual Life Insurance Co. v. Dibrell, 137 Tenn. 528, 539, 194 S.W. 581, L.R.A., 1917E, 554; Volunteer State Life Insurance Co. v. Richardson, 146 Tenn. 589, 605, 244 S.W. 44, 26 A.L.R., 1270; Hughes Bros. v. Aetna Insurance Co., 148 Tenn. 293, 301, 255 S.W. 363.
Near the close of our former opinion, we said: "We are not satisfied that the applicant's answers to questions 14, 20(A), and 21 in the application, although false, would, in view of the facts known to Dr. Fort and Dr. Guerin, have influenced complainant's action in determining whether to issue the policy in question, if the answer to question 10 (relating to the extent of the applicant's use of intoxicants) was true." *Page 551 
This was equivalent to a statement that this court was not satisfied that the false answers of the applicant to questions 14, 20(A), and 21 in his application, standing alone, increased the risk involved in the issuance of the policy.
In its petition to rehear, the insurance company insists, in respectful terms, that the view thus stated is erroneous, and asks that, upon this point, the cause be reheard, and that it be held and adjudged that the applicant's answers to questions 14, 20(A), and 21 in the application (which, as heretofore held, are shown by undisputed evidence to have been untrue) increased the risk of loss within the meaning of our statute (Acts of 1895, chap. 160, sec. 22; Shannon's Code, sec. 3306 [Code 1932, sec. 6126]). After a reexamination of relevant parts of the record (particularly the depositions of Drs. Fort, Guerin, Stewart, and Mortenson) and pertinent authorities, we have reached the conclusion that the petition of the insurance company should, to the extent above indicated, be granted, and it is so ordered.
Dr. Fort, as chief medical director of complainant insurance company and chairman of its "Risk Committee," had the final "say-so" as to whether the policy in question should be issued by the company. He had been well acquainted with the applicant, both in a personal and a business way, for a number of years, and had confidence in his truthfulness. He had information that Harry Sudekum had been to Battle Creek Sanitarium, but he also had before him the report of Dr. Guerin that Harry had stated, with emphasis, that he wanted it understood that he did not go to Battle Creek "as a patient to be treated," but "just went there to spend his vacation and to relax and rest."
The statement of Harry Sudekum just mentioned was quite reasonable in the light of the "character of the institution known as Battle Creek Sanitarium" as described in Dr. Fort's testimony, from which we quote as follows:
"Q. Doctor, do you know the character of the institution known as Battle Creek Sanitarium, at Battle Creek, Michigan? A. I do.
"Q. Will you describe what that is, go into detail relative to it? A. Well, it is a large institution started by the Seventh Day Adventists. They are vegetarians, and it was started as a small institution, but grew and is now a very large institution that does all kind of medicine and surgery, have a surgical department. They take medical cases of different kinds. But it is especially known as an institution where people go for a rest, have a restriction of diet. Most people eat too much anyway, and that is one of their specialties, that they restrict the diet, giving no meat, and they go there for rest, and many different diseases, but it is especially known as an institution for rest and diet, and a great many people who have some form of neurosis, or psychoneurosis, and particularly indigestion, and forms *Page 552 
of digestive troubles, go there for treatment. That is about the best I can describe it.
"Q. Doctor, if you were to hear that or had known that a person had been to Battle Creek Sanitarium, would that necessarily impress on your mind that he had been there for something serious, or for a rest? A. It would not necessarily carry with it the inference that he had gone there for anything serious, that he or she might have had, any particular thing, there are so many people go there for rest and to have a restriction of diet, and to be built up from being run down from one cause and another, and there are so many other institutions where they do major stuff and do not do that, I might be inclined to believe they had gone there to rest, but I don't know whether they would go there for any other purpose.
"Q. I will ask you this, Doctor; if, in this section of the country particularly, it is not known that it is a place that people go to rest, recuperate, and so on? A. Yes, I think that is true."
If Dr. Fort and other members of complainant's "Risk Committee" had known that Harry Sudekum had consulted Dr. Mortenson at the Battle Creek Sanitarium at the time and under the circumstances shown in the record, and had at that time stated to Dr. Mortenson, as a part of the "history" of his case, that one of his "habits" was the use of "alcohol considerably of late" and that "since the first of the year" he had "begun to drink alcohol" and wanted to "discontinue drinking," and that Dr. Mortenson diagnosed his trouble as alcoholism — "a condition brought about by excessive use of alcohol" — and "psychoneurosis" — "a functional disturbance of the nervous system" — such information would, naturally and reasonably, have influenced them in determining whether a policy should be issued in accordance with the application.
Accepting as true the statement of the applicant that he did not go to Battle Creek for treatment as a patient, but to spend his vacation and to relax and rest, and that he had never had any ailment of the brain or nervous system, and likewise, accepting as true his statement (in substance and effect) that the only physician he had consulted was Dr. Mat Buckner and that he had consulted him only for headache occasionally, the complainant insurance company was thereby misled and deprived of information which it would doubtless have acquired if questions 14, 20(A), and 21 had been answered truthfully and frankly, and "as sources of information are revealed, and investigation is pursued, the degree of risk of loss decreases." Mutual Life Insurance Co. v. Dibrell, supra, 137 Tenn. 536, 194 S.W. 581, 583, L.R.A., 1917E, 554.
The defendant below and appellee here, American Trust Company, administrator of the estate of Harry Sudekum, deceased, has also filed a petition for a rehearing, and has included therein a request for an additional finding of facts. *Page 553 
In so far as the petitioner is seeking an additional finding of facts, we think the petition is based upon a misconception of the functions of this court in jury cases. Alice L. Anderson et al. v. Susie M. Stribling et al., 15 Tenn. App. 267.
Section 12 of chapter 100, Public Acts of 1925, requiring the chancellor and the Court of Appeals to file written findings of fact, has no application to a case tried by a jury demanded by the parties or one of them. The trial of issues of fact by a jury in the chancery court should be conducted like other jury trials at law, the finding of the jury having the same force and effect, and the court having the same power and control over the finding, as on such trials at law. Code of 1932, sec. 10579, Shannon's Code, sec. 6286.
In such case an assignment of error in this court that the chancellor erred in overruling a motion for a directed verdict presents a question of law and not a question of fact, and it is not the function of this court to "find the facts," but it is our duty to ascertain whether there was any material evidence reasonably tending to establish facts determinative of the issue.
"By material evidence is meant evidence material to the question in controversy, which must necessarily enter into the consideration of the controversy and by itself, or in connection with the other evidence, be determinative of the case. But a conflict of evidence upon a detached or separate feature or fact, even though it is material, should not of itself prevent the giving of peremptory instructions. Facts are frequently material which are by no means determinative; and facts are frequently material in themselves, but become immaterial when taken in connection with other facts. . . . So that the disputed fact must not only be material, but in itself or in connection with other facts it must be determinative of the real issues and the merits of the case." Knoxville Traction Co. v. Brown, 115 Tenn. 323, 331, 332, 89 S.W. 319, 321.
The rule that assignments of error challenging the action of the chancellor on motions for a directed verdict raise questions of law, not issues of fact, and that there was no occasion for us to extend our written opinion by setting forth all the facts disclosed by the witnesses, without regard to their determinative character, was pointed out in our former opinion. Citing Wilson v. Alexander, 115 Tenn. 125, 128, 88 S.W. 935; Norman v. Railroad, 119 Tenn. 401, 422, 104 S.W. 1088; Knoxville Traction Co. v. Brown, supra.
We have heretofore, in that part of this opinion disposing of the petition of the insurance company and in our former opinion, stated, in substance, the undisputed record facts which, we think, support the appellant's assignments that the learned chancellor erred in overruling appellant's motion for peremptory instructions to the jury to find the second, third, and fifth issues in favor of the complainant below. Our rulings on these assignments are subject to review on *Page 554 
the whole record by the Supreme Court on petition for certiorari, as are all matters of law; so that, on a review by the Supreme Court a petitioner will not be prejudiced or limited by the omission from our written opinion of any evidence which the Supreme Court may deem material to the issues, although we did not so regard it.
We may add, in disposing of the administrator's petition for an additional finding of facts, that it is not material that the misrepresentations were with respect to matters which did not contribute to the cause of the death of the applicant. In Mutual Life Insurance Co. v. Dibrell, supra, it is said:
"It cannot be that the matter misrepresented should necessarily relate to the hazard of loss by the death of the insured. Such a construction might prevent the company's rescinding the contract because of a misrepresentation that actually induced the contract, in an action begun promptly after the making of the application and the issuance of the policy. What will not avail to `void the policy,' under the statute, it seems equally will not `prevent its attaching,' as a contract. We cannot adopt the harsh and radical construction that the Legislature meant to deprive the insurer of the right to rescind the policy contract for inducing fraud." Pages 536, 537 of 137 Tenn. 194 S.W., 581, 583.
The administrator asks us to reconsider our action in sustaining appellant's assignment of error No. 15 relating to the chancellor's refusal to charge the jury in conformity with special request No. 9. Said request was as follows:
"Relative to the question:
"`To what extent do you now, or have you in the past, used intoxicants, morphine, cocaine, or other habit forming drugs?'
"To which the applicant, Harry Sudekum, replied:
"`A social drink four or five times a year.'
"I charge you that it was the intent of the complainant Insurance Company by said question to elicit from the applicant, Harry Sudekum, among other things, the fact as to the extent he had used intoxicants in the past or was using them at or about the time of the application for insurance.
"I charge you further that the answer `A social drink four or five times a year' by the applicant, Harry Sudekum, in reply to said question, was a representation of fact to the effect that his use of intoxicants was limited to only a social drink on four or five occassions during the course of a year. I therefore charge you that if you find from a preponderance of the evidence that the said Sudekum drank materially more whiskey and/or other intoxicants prior to and/or about the time of the making of said application for insurance than a social drink on four or five occasions during a year, that then his answer to said question was false and it will be your duty to answer `Yes' to Issue No. 1." *Page 555 
Finding that the instruction thus requested was not, either in words, or in substance, given to the jury, we held in our former opinion that the chancellor's refusal to so charge the jury was reversible error.
The rule that the administrator seeks to invoke, viz., that a requested instruction must be strictly accurate to make its rejection reversible error, is well established, but we think the instruction here in question was "accurate," and was appropriate to evidence pertaining to issue No. 1. The fact (if it was a fact) that the applicant "drank materially more whiskey and/or other intoxicants . . . than a social drink on four or five occasions during a year" was material to the risk. 4 Joyce on Insurance (2 Ed.), page 3613; Volunteer State Life Insurance Co. v. Richardson, supra, 146 Tenn. 607, 244 S.W. 44, 26 A.L.R., 1270.
In this connection, petitioner, the administrator, relies upon a quotation from the opinion of this court in the case of Life 
Casualty Insurance Co. v. Robertson, 6 Tenn. App. 43, 66, as follows:
"And, with reference to the question as to whether the insured had at any time used any alcoholic drinks to excess, it is generally held that questions as to whether an applicant for insurance has used or uses intoxicating liquor, and, if so, the extent and average quantity, do not refer to an occasional or exceptional use of such drinks, or an exceptional use to excess, but to the habitual or customary use. See Annotation in 26 A.L.R., pp. 1284-1288, where many adjudged cases supporting the proposition just stated are cited and digested. See, also, 4 Joyce on Insurance (2 Ed.), sec. 2096: 1 Bacon on Life  Accident Insurance (4 Ed.), sec. 285, pp. 542-546; Northwestern Life Insurance Co. v. Muskegon National Bank, 122 U.S. 501 [7 S.Ct., 1221], 30 L.Ed., 1100; Knickerbocker Life Insurance Co. v. Foley,105 U.S. 350, 26 L.Ed., 1055."
The two paragraphs immediately preceding that just quoted are as follows:
"It may well be assumed that if the insured's `daily consumption of alcoholic drink' was large, or he had at any time used alcoholic drinks to excess, such facts would influence the judgment of the insurance company because that would tend to `increase the risk of loss;' hence the answers of the insured to the two questions directed to these matters, or either of them, if false, would avoid the reinstatement of the policy and bar a judgment for plaintiff. Act of 1895, chap. 160, sec. 22 (Shann. Code, sec. 3306); Volunteer State Life Insurance Co. v. Richardson, 146 Tenn. 589, 244 S.W. 44, 26 A.L.R., 1270; Pacific Mutual Life Insurance Co. v. Galbraith, 115 Tenn. 471, 21 S.W. 204, 112 Am. St. Rep., 862.
"But the question, `What is your daily consumption of alcoholic drink?' seems to assume that the insured consumed alcoholic drinks, and the inquiry was directed to the extent of his daily consumption; *Page 556 
hence, when the question is thus understood, the answer `none' is simply a statement by the insured that he was not addicted to the daily use of alcoholic drink. McEwen v. New York Life Insurance Co., 42 Cal. App. 133, 183 Pac., 373; Keatley v. Grand Fraternity, 2 Boyce (Del.), 267, 78 Atl., 874."
The first of the two questions under consideration in the Robertson Case, supra, was "What is your daily consumption of alcoholic drink?"
To which the applicant answered "None."
The next question was "Have you at any time used any of them to excess?"
To which the applicant answered "No."
We think the difference in the questions and the resulting inapplicability to the instant case of the opinion in the Robertson Case are apparent, without comment.
The petition of the administrator for a rehearing is denied and dismissed at its cost; but the petition of the appellant insurance company is granted to the extent before indicated, and that part of the former opinion and decree of this court directing the remand of the cause for a new trial is vacated and set aside, and a decree will be entered here sustaining the complainant's bills and ordering the policy in question to be canceled and surrendered to the complainant, and that the preliminary or temporary injunction granted by the chancellor be made permanent.
The costs of the cause, including the costs of the appeal, will be adjudged against the appellee, American Trust Company, as administrator of the estate of Harry Sudekum, deceased.
Crownover and DeWitt, JJ., concur.