Vaughn v. National Life Accident Ins. Co.

1. To void a policy of life insurance upon the ground that the insured made false representations in the application therefor, the insurer must in every case prove that the representations were both untrue and were material to the risk. Falsity of such representations, standing alone, will not render the policy void.

2. But where the judgment decreeing cancellation of an insurance policy is attacked upon the sole ground of alleged error in refusing a request of plaintiff in error to submit to the jury certain questions of fact, and where it appears that such questions were inappropriate and there was no error in refusing to submit them to the jury, such judgment will be affirmed.

No. 13036. OCTOBER 13, 1939. The National Life and Accident Insurance Company filed suit against Mrs. Selma P. Vaughn, for cancellation of an insurance policy issued by it on the life of Herschel R. Vaughn, for $1763, in which the defendant was beneficiary. The petition alleged, as grounds for cancellation, that the policy was issued upon a written application which was attached to and expressly made a part of the contract, and that the insured gave the following answers in the application to the questions stated, to wit: "18. Have you ever had any ailment or disease of (a) Brain or nervous system? No. (b) Heart or lung? No. (c) Skin, middle ear, or eyes? No. (d) Have you ever had rheumatism, gout, or syphilis? No. (e) Have you ever raised or spat blood? No. (f) Have you ever consulted a physician for any ailment or disease not included above? (1) Tonsillotomy, 1935. (2) Influenza, 1936. . . 23. State names and addresses of physicians you have ever consulted, and give the occasion by reference to question numbers and letters above. Dr. Edgerton 18 (f-1); Dr. Duvall 18 (f-2), Atlanta, Georgia." Further is was alleged, that such representations were material, and were relied upon by petitioner; that the policy was issued on July 1, 1937, and the insured died on July 3, 1937, of acute uremia and hemolytic streptococcus, peritonitis; that he had chronic sinusitis and ptosis of right kidney with ureteral adhesions; that the beneficiary filed her proof of death, and petitioner then for the first time learned that the insured had consulted Dr. Stephen T. Brown, a licensed physician, on June 14, 1937, for a diagnosis of illness from which he was then suffering; that he had previously during 1937 consulted Dr. Maurice L. B. Clarke, a licensed physician, for the cause of general anemic conditions a large number of times, receiving intravenous injections; that during the last week in June, 1937, he consulted Dr. Clarke about a severe pain in the right side of his back; and that the insured had paid $3.55 as premiums on said policy, which petitioner has tendered to the defendant. The defendant admitted most of the allegations of the petition, but denied the alleged consultations with Doctors Clarke and Brown, and that the representations of the insured were false, material, and relied upon by plaintiff; and by cross-action she prayed for judgment against the plaintiff on the insurance policy.

At the trial counsel for the plaintiff submitted the following questions of fact, to be submitted to the jury: (1) Did Herschel R. Vaughn consult Dr. M. L. B. Clarke professionally prior to June 15, 1937? (2) If so, how many times did Mr. Vaughn consult Dr. M. L. B. Clarke? (3) Did Dr. M. L. B. Clarke treat Herschel R. Vaughn prior to June 15, 1937? (4) If so, how many times did Dr. Clarke treat Mr. Vaughn? (5) Did Herschel R. Vaughn consult Dr. Stephen Brown prior to June 15, 1937? (6) If so, how many times did Mr. Vaughn consult Dr. Stephen Brown prior to June 15, 1937? Upon inquiry by the court, counsel for the defendant stated they had no objections to these questions, and they were submitted to the jury. Counsel for the defendant thereupon requested the court to submit to the jury the following cross-questions: (1) If you find that H. R. Vaughn was attended professionally by Dr. Clarke, was it for a serious illness? (2) If you find that Vaughn consulted Dr. Clarke for a serious illness, did it have a direct relation to the ultimate cause of death, and was it material to the risk? (3) Did Vaughn consult Dr. Stephen T. Brown for a serious illness? (4) If so, did Dr. Brown inform Vaughn of the nature of any trouble Vaughn had? (5) If you find that Mr. Vaughn consulted Dr. Brown for serious illness, did it have a direct relation to the ultimate cause of death, and was it material to the risk? Upon objection, the court refused to submit the cross-questions. Both sides introduced evidence, and closed. On motion for a directed verdict, the jury, by direction of the court, found that Herschel R. Vaughn consulted both Dr. M. L. B. Clarke and Dr. Stephen T. Brown professionally before June 15, 1937; that he consulted Dr. Clarke several times; that Dr. Clarke treated him several times; and that he consulted Dr. Brown one time. Upon this verdict a decree was entered, granting the prayers of the petition. The defendant excepted, assigning error on the decree and on the rulings stated above. The right to the equitable relief sought was not challenged by demurrer or otherwise. 1. The pleadings present two questions: (1) Did the insured give untrue answers to the questions in the application? (2) If so, were they material, and did they change the nature or extent or character of the risk? Since the case is here not on a question of evidence, we must conclude that untrue answers were made by the insured. This confines our consideration to the question whether the variations changed the nature, extent, or character of the risk. In Lee v. Metropolitan LifeIns. Co., 158 Ga. 517 (2) (123 S.E. 737), it was said: "A material representation in an application for life insurance is `one that would influence a prudent insurer in determining whether or not to accept the risk, or in fixing the amount of the premium in the event of such acceptance.'" This definition was restated in Phillips v. New York Life Ins. Co., 173 Ga. 135 (159 S.E. 696). Counsel for the defendant in error contends that the effect of the ruling in New York Life Ins. Co. v. Hollis,177 Ga. 805 (171 S.E. 288), is that the nature of the ailment for which the physician attended the insured is not involved, but that when it has been determined that the representation by the insured that he had not been attended by a physician was false, the variation instantly and without more becomes such a variation as voids the policy. Admittedly some of the language employed in that opinion tends to support such a construction. However, the facts involved in that case as reported show that the insured was treated by a physician and prescription given for intestinal trouble and to control fever and for nervousness. The opinion was rendered upon these facts, and any ruling made outside them was obiter and is not controlling. The judgment there under review was a denial of the prayer of the insurer to cancel the policy, and this court reversed the judgment. The meaning of that decision is that the proved facts, which were uncontradicted, demanded a finding that the variation affected the nature or extent or character of the risk, and thus voided the policy.

It can be argued with much force and reason that withholding from the insurer the fact that the insured has been attended by a physician materially affects the risk, and that the insurer might have declined the risk if it had known this fact; and that as a contracting party the insurer is entitled to stand on an equality with other contracting parties in exercising its free choice in accepting or rejecting a risk. But the weakness of such argument lies in the fact that this subject has been considered and fully dealt with by the legislature, which in the exercise of its constitutional power has prescribed the rule that must be applied in such cases. Code, §§ 56-820, 56-821, 56-908. By this law the parties and the courts are bound. It provides that such variations will void the policy only when they change the nature or extent or character of the risk. Physicians could be consulted on numerous matters that would not materially change the nature or extent or character of the risk. Such consultations, contrary to representations of the insured, manifestly would not under the statute void the policy. No doubt in enacting these statutes the legislature had in mind the probability of an insured, due to forgetfulness because of its lack of importance, stating in his application that he had not consulted a physician, when in fact he had consulted a physician and received treatment for a cold that had long since disappeared entirely. And by the statutes it was intended to make sure that the family of such an insured should not be denied his insurance money solely because of such innocent and harmless oversight. Whether misrepresentations are material is ordinarily a question for the jury. Mobile Fire Department Ins. Co. v.Miller, 58 Ga. 420; Phenix Ins. Co. v. Fulton, 80 Ga. 224 (4 S.E. 866); Massachusetts Benefit Life Asso. v.Robinson, 104 Ga. 256 (8) (30 S.E. 918, 42 L.R.A. 261);Connecticut Mutual Life Ins. Co. v. Mulkey, 142 Ga. 358 (82 S.E. 1054); John Hancock Mutual Life Ins. Co. v. Yates,182 Ga. 213, 216 (185 S.E. 268). But where the evidence excludes every reasonable inference except that they were material, no issue is presented upon that point for determination by the jury, and it should be decided by the court. Phillips v. New YorkLife Insurance Co., supra; New York Life Ins. Co. v. Hollis, supra; National Life Accident Ins. Co. v. Gordon, 183 Ga. 577 (188 S.E. 894); Jefferson Standard Life Ins. Co. v.Henderson, 37 Ga. App. 704 (141 S.E. 498).

2. While the questions of fact submitted by the insurer and answered by the jury failed to require a finding relating to any ailment of the insured for which he was treated, and in this respect the questions were insufficient and the verdict failed to support the decree, yet the plaintiff in error consented to the questions submitted, and her only attack on the decree is the alleged error in rejecting her cross-questions. The burden is upon her to show error in the judgment, and she is confined in showing this to the attack she makes thereon. The cross-questions were inappropriate, and were properly rejected. There was no need to show that the insured was treated for a "serious illness;" and the further questions, relative to whether the illness related directly to the cause of death or was material to the risk, being predicated upon the one as to "serious illness," must fall with it. Nor is the knowledge of the insured of his condition material, when all charges of fraud on his part have been stricken from the petition. The court did not err in refusing to submit the cross-questions; nor are the verdict and decree erroneous for any reason assigned.

Judgment affirmed. All the Justices concur.