Court Opinion

ID: 9639913
Source: CourtListenerOpinion
Date Created: 2023-08-22 16:51:44.760861+00
Date Added: 2024-06-11T18:05:06.130726
License: Public Domain

VINSON, Associate Justice
(dissenting).
The majority state that § 181b places the burden of proof upon the insurer in this case. I agree that § 181b does at least this much and on that issue alone this case should be affirmed rather than reversed.
The majority conclude that the burden of proof is upon the insurer because of the belief that the “unsound health” of § 181b embraces the issues raised by the defense that the insured had concealed the facts of hospitalization and medical consultation. I conclude that the burden of proof is upon the insurer because I believe that § 181b specifically provides that upon any issue of the insured’s bad faith in obtaining the pol*108icy the burden of proof is upon the company.
Here is what § 181b did: (1) It placed the burden of proof upon the company to prove (a) unsound health; (b) knowledge of, or reason to know of such unsound health; (c) the bad faith of the insured or his intent to defraud the company. (2) It invalidated any provision, agreement, condition, warranty or clause contained in the policies looking toward the effort of the company to avoid the burden of proof on any item of (1). (3) It stated that' proof by the insurer of unsound health, fraud, intent to deceive, breach of warranty or condition precedent, or other matter of defense shall be subject to the provisions of § 183.
The. majority state that the important clause of the policy is the one which provides that the company assumes no obligation if the insured has been a hospital patient or has been attended by a doctor unless the insured shows that such treatment or attention was for no serious condition, or unless such treatment or attention is endorsed by the company on the policy which is the entire agreement between insurer and insured. In the light of this statement in the policy and the statutory provision, the company’s defenses are considered.
In. the lower court the company defended (1) on the ground of unsound health, (2) that the insured within two years preceding the date of issuance of the policy had been a patient in certain institutions and treated for the diseases alleged to constitute unsound health, and (3) had been attended, within said two years, by a physician for treatment of these diseases. In this court the company’s defenses are the same except it states that its primary defense is not unsound health, but if it be deemed that it is in fact defending on unsound health, its appeal is still meritorious.
It should be remembered that the insured made no representation as to his health or past medical history in the policy, but the company seeks to avoid liability because of the policy provision set out above which the majority have called the important clause. The clause has no significance in my opinion. Section 181b states that the burden of proof is upon the insurer; with that the majority agree; section 181b further states that this is true “any provision * * * in said policy * * * to the contrary notwithstanding”. The instant policy states that the company assumes no obligation if the insured has had attention or treatment at a hospital or by a doctor within the preceding two years, “unless it shall be shown by the Insured or any claimant that no such [treatment or attention] was for a serious * * * condition”. To my mind Congress could scarcely have found a better illustration of a clause contrary to the burden of proof laid down in § 181b, unless a company would be so naive as to say “Whenever the applicable statutes place a burden of proof upon us, the insured agrees to carry that burden for us.” At the very best, the so-called forfeiture provision merely sets out two ways in which bad faith or intent to defraud may be shown, but it cannot, in light of the statute, shift any part of the insurer’s burden of proof to the shoulders of the insured, such as requiring the insured to show that he did not have a serious ailment instead of the company showing that he did. Moreover, I do not feel that the record even comes close to showing the assumption by the insurer of this burden.
The court reverses for failure to permit certain testimony to be introduced. I agree that the testimony of the interne with respect to the hospital records falls within the privilege statute, and that such testimony being timely objected to was inadmissible. The majority, however, hold that the autopsy report, which was a part of the hospital records, should have been admitted. With this I cannot agree. The record does not disclose the contents of the autopsy report. In a case where the autopsy report was properly proved, under our holding, it would not fall within the privilege statute, but the refusal to admit it in this case is not shown to be prejudicial.
This leaves the other reason assigned for reversal, namely that Dr. Horn should have been permitted to testify that he had attended the deceased within two years immediately preceding the date of the policy, with the dates of attendance. The court is of the opinion that his testimony would tend to show that “a fraud had been practiced by the insured in denying to the insurer that she had been previously treated by a physician”. The policy does not state that the insured had or had not been treated by a physician within two years immediately preceding the date of the policy. The only place in the policy where there is any reference to treatment by a physician is in the forfeiture provision *109which would permit the avoiding of the policy by the insurer in the event that such medical treatment had taken place within the time prescribed. As I have attempted to point out this so-called forfeiture provision cannot be effective. I do not maintain that the evidence of Dr. Horn in this respect was not competent testimony, but I think that it alone would not sustain the defense. There was no other competent evidence in this case tending toward establishing unsound health, bad faith or intent to defraud. Under the majority’s interpretation of the statute, there was nothing that precluded the company from the introduction of such evidence if it were available. The testimony as to the medical attendance which should have been admitted may well have been for an ailment entirely disassociated with the diseases the insured is alleged to have had, or for ailments minor in character and foreign to the diseases relied upon in the answer, and, of course, it may have been for the ailments which caused the death of the insured, or the ailments relied upon in the answer, but a conclusion by a jury should not be reached by pure speculation.
Not only was it incumbent upon the insurer to prove unsound health, but § 181b speaks of the knowledge of the applicant or insured, or reason to know that she was in unsound health. The record is definitely silent in respect of such knowledge, or reason to know, on the part of the insured. The attendance of a doctor, with nothing else, does not meet the burden of proof laid down in the statute. So had the Doctor’s testimony been admitted, under the state of the record, I would be compelled to view it as a proper case to direct a verdict for the plaintiff. Hence, I see no error in the action of the lower court, and dissent from the reversal.
What has been said is sufficient to dispose of this case but since the majority are of the view that the full force and effect of the rule of the Burton case has in no way been altered by § 181b I feel that there is a call for further discussion.
Section 183 requires the insurance company to attach the application to the policy “In default of which no defense shall be allowed to such policy on account of anything contained in, or omitted from, such application.” Since the application would normally question the prospective policyholder on all matters which the insurer deemed material to its assumption of the risk, it might well seem that any information which the applicant withheld would be something omitted from his statement, and hence the insurance company could not defend on the ground that it had been intentionally misled unless it attached the application to the policy. That way it can be known exactly what representations were made and what were not.1 And this court took that position in the Burton case. The Supreme Court reversed. Mr. Justice Stone and Mr. Justice Brandéis dissented, saying in part: “The defense here was that the insured was not in sound health at the date of the policy. Petitioner sought to establish it by showing that the state of health of the insured, then deceased, had been bad for several years before the policy was issued. If the written application were before the Court and revealed that the insured had been asked about his condition of health and had either answered fully and truthfully, or not at all, it would show, I think, that the defense, within the very meaning and purpose of the statute, was ‘on account’ of something ‘contained in or omitted from the application,’ and that the petitioner was precluded from making it.”2
Congressional action on industrial insurance policies awaited this decision.3 After the decision Congress passed a bill amending the District Code in respect of insur*110anee to the form in which it now stands. Both the House and Senate Committees said that “The bill is designed for the protection of holders of industrial life-insurance policies.” Section 181a now reads that such policies “Shall be subject to the following conditions, in addition to any others prescribed by law”. Section 181b after stating that the burden of proof is upon the insurer in 'all those respects which I have previously pointed out and after, stating that no policy provision can alter the burden reads: “Proof by the insurer of fraud, intent to deceive, unsound health, bad faith, breach of warranty or condition precedent, or other matter of defense, shall be subject to the provisions of section 183 of this title.”
Thus it may well have been that Congress intended that in this type of policy the insurer to meet his new burden of proof had to file the application with the policy pursuant to the mandate of § 183. For some reason the insurance company here chose to disregard the plain requirement of § 183. I am not ready to agree with the view of the majority that § 181b in no way alters the full force and effect of the Supreme Court’s decision in the Burton case.

 On the policy now involved appears this note in small print: “Please read your Policy and if not correct, satisfactory, or in accordance with your application., return it at once as the acceptance of it will be taken as a guarantee to this Company, that you have carefully read (or had it read), and fully understand its contents.” (Ital. supplied) How is the insured to know whether the policy is in accordance with his application if the company flouts the requirement of § 183 and does not attach a copy of the application to the policy? Courts do not even expect alert lawyers trained in the study of language to make such comparisons from memory.

 Washington Fid. Ins. Co. v. Burton, 287 U.S. 97, 102, 53 S.Ct. 26, 28, 77 L. Ed. 196, 87 A.L.R. 191.

 This is evidenced by letter from L. H. Reichelderfer, President Board . of Commissioner's of the District of Columbia, to Hon. Arthur Capper, Chairman Committee on the District of Columbia, United States Senate, dated January 7, 1933, reprinted Senate Report No. 1207, Feb. 10, 1933, at page 4.