National Life & Accident Insurance v. Pollard , 66 Ga. App. 895 ( 1942 )

1. Where the company issued a policy of industrial life insurance upon an application which contained information that the insured was twenty-one years of age, was six feet one inch in height, but weighed only 146 pounds, that he had had "bronchitis," and that a certain named doctor attended him, and it further appears that the insured told the agent of the company he had had "bronchiectasis" and the agent put "bronchitis" in the application (medical testimony disclosing that "bronchiectasis" and "bronchitis" are terms usually confused and used interchangeably by laymen), and the company seeks to avoid liability upon the ground of fraud in the procurement, in that the insured misrepresented the condition of his health, the jury was authorized to find that the company had knowledge of the insured's physical condition, or at least had sufficient knowledge to put it upon inquiry as to the soundness of the insured's health. The company, having issued the policy and received the weekly premiums, is estopped from deriving any benefit from a stipulation in the policy which might have availed it if it had been ignorant of the facts.

2. The charge complained of was in the language of Rome Insurance Co. v. Thomas, 11 Ga. App. 539 (3, 4) (75 S.E. 894), and was applicable to the facts of this case.

3. The evidence authorized the verdict, and no error of law appears.

DECIDED MARCH 6, 1942. REHEARING DENIED APRIL 3, 1942. The plaintiff recovered upon an industrial life-insurance policy, for the death of her son. To the overruling of its motion for new trial the defendant excepted.

This is a case where the application was not attached to or made a part of the policy, and where the evidence clearly presented an issue of fact as to whether the applicant for insurance had made false representations with intent to defraud or wilfully conceal material facts in his application. Where, as here, the application is not attached to the policy, the company may not treat the application as a part of the contract or introduce it in evidence as such, or to show that certain statements were contracted or warranted to be true; but the company could plead and prove that the insured had made these false and fraudulent statements as to his health, and that the company was fraudulently induced to issue the policy and that the policy was therefore void, not as a matter of contract, but because of fraudulent procurement. Johnson v. AmericanNational Life Insurance Co., 134 Ga. 800 (68 S.E. 731);Metropolitan Life Insurance Co. v. Bugg, 48 Ga. App. 363 (172 S.E. 829). The company here is seeking to avoid liability on the ground of fraudulent procurement, in that the insured at the time of his application was not in sound health as he represented himself to be, but was suffering from "bronchiectasis" at the time and was being treated by the doctor therefor. The plaintiff contended that the insured told the company's agent that he had had "bronchiectasis" but that the agent put it down "bronchitis," and that the company waived any conditions voiding the policy in the event of unsound health on the date the policy issued and was estopped from setting up that provision of the policy in defense to an action on said policy.

The application, dated May 15, 1939, stated that the agent of the company asked the insured: "Are you in good health?" The insured answered: "Yes." The agent then asked: "Who is your doctor?" Answer: "Dr. Aven, Medical Arts Bldg." He was asked: "What illness, injury or accident have you ever had? Give details." He answered: "Bronchitis 1938; May. Flu. Mar. 1939. Dur. 1 wk. recovered." All of the foregoing appears in the application. The insured died on May 24, 1940, of heart trouble following an operation for bronchiectasis. One of the provisions of the policy is that "No obligation is assumed by the company prior to the date hereof. Except as elsewhere herein provided, if . . Its terms can not be changed or its conditions varied, except by written agreement signed by the president or secretary of the company." But the question here presented is not a question of waiver so much as of notice and estoppel. See Johnson v. AEtnaIns. Co., 123 Ga. 410. The knowledge of the agent who solicited the insurance, whose duty it was to obtain this information and who filled in the application with the insured's answers, was notice to the company, and the company is estopped from asserting that it did not know of the illness. Life c.Insurance Co. of Tenn. v. Burkett, 38 Ga. App. 328, 332 (144 S.E. 29); Fair v. Metropolitan Life Insurance Co., 5 Ga. App. 708 (63 S.E. 812). Furthermore, from the application itself, the company knew that the insured had had "bronchitis" and that Dr. Aven, whose office was in the Medical Arts Building, had treated him. They also knew the insured was twenty-one years old, was six feet one inch in height, and yet weighed only 146 pounds. It seems to us that these facts, that the applicant had had "bronchitis," was six feet one inch tall, but weighed only 146 pounds, were sufficient to put the company on notice of the true condition of the insured's health and placed a duty on the company to make some inquiry of Dr. Aven. It also appears from the testimony of the plaintiff, who was present when her son made the application and gave the answers to the questions therein, that at the time the application was made the insured told the defendant's agent that he had had "bronchiectasis," but that evidently the agent put it down "bronchitis." It also appears from medical testimony that the average layman is apt to confuse the two terms and use them interchangeably. Dr. Aven told the insured he had had "bronchiectasis," but did not tell him the gravity thereof.

Taking all the facts and circumstances of the case into consideration we think the jury was authorized to find that the insured was not guilty of fraud in procuring the policy, and that the company knew or should have known, not only through its agent, but also through matters stated in the application, that the insured was not in good health at the time the policy was issued, and that by accepting the premiums it waived any defense it might have insisted on under the policy. The jury was authorized to find that the insured was not guilty of fraud, but that on the contrary his acts were consistent with good faith.

The charge complained of was in the language of RomeInsurance Co. v. Thomas, supra, and was applicable to the facts of this case. The agent here was not, as urged by the defendant, a mere solicitor, and therefore not empowered to waive any right of the company. He had been employed by the company for seventeen years, and actually made out the application. This was an industrial life-insurance policy, and the rule that "knowledge of material facts on the part of an agent of an insurance company is notice to the company; and if, with this notice, the company issues a policy, it is estopped in equity from deriving a benefit from any stipulation in the policy which might have availed if it had been ignorant of the facts," is especially applicable "for the reason that [the industrial policy] operates largely among and principally affects that portion of our population who pay for the protection which life insurance affords out of the weekly earnings derived from their labor, and who are in many instances easily imposed upon by the statements of agents." Id. 546.

Judgment affirmed. Broyles, C. J., and Gardner, J., concur.

ON MOTION FOR REHEARING.