American Life Ins. Co. of Alabama v. Stone

1. In an action on an insurance policy for disability benefits from sickness or disease, in which it appears that the insured had a hernia which was not disabling to any extent before the issuance of the policy, but which became aggravated and required surgery and hospitalization after the policy was issued, it was a question for the jury to say whether or not the disability was the result of a sickness within the meaning of the policy.

2. In the absence of anything in the policy limiting the agent's authority, the agent's knowledge that the insured had a hernia condition which was not disabling to any extent prior to the issuance of the policy was imputed to the company, and the insured would not be barred from a recovery for sickness caused by the aggravation of such hernia after the policy was issued, merely because of its pre-existence.

3. Jury questions were presented under count 2 of the petition, alleging sickness resulting from the aggravation of a pre-existing hernia, as to whether the disability was a sickness within the meaning of the policy, and as to whether the company had waived the defense that the hernia existed before the policy was written, or was estopped from defending on that ground, where it appears that the company had knowledge of such hernia through its agent taking the application for the insurance.

DECIDED NOVEMBER 11, 1948. REHEARING DENIED DECEMBER 3, 1948. Benjamin R. Stone sued American Life Insurance Company of Birmingham, Alabama, for certain hospitalization and operation expenses, doctor's bills, loss of earnings, and for a penalty and attorney's fees alleged to be due under the terms of a group insurance policy issued to the Macon Fire Department, of which the plaintiff was a member and policyholder.

The pertinent insuring clause in the policy, under the petition as amended, is section 1(b), as follows: "Sickness or disease, hereinafter referred to as ``such sickness', promising to pay the following [amounts] indicated." The action was in two counts. Count 1 alleges an indebtedness to the plaintiff by virtue of "sickness" within the terms of the policy, which sickness was brought about by the aggravation, after the policy was issued on September 15, 1947, and while the policy was in force, of a previous hernia condition which originally developed on January 4, 1946; that such hernia condition was never disabling to any extent until such aggravation, which occurred after the issuance of the policy. It was alleged that the aggravation of the hernia condition was so severe, and the break in the insured's abdominal wall became so large, and the pain resulting therefrom became so intense, that the insured was unable to perform any of his duties and became totally disabled within the meaning of the policy; that because of this condition the insured's physician ordered that he submit to a surgical operation, which was performed on October 29, 1947, from which the insured was totally disabled and in bed for some time thereafter. Count 2 contained the same allegations as count 1 and also charged: that before the issuance of the policy the plaintiff advised the defendant's agent that he had a hernia at the time the application for the policy was taken by the agent, which hernia had developed on January 4, 1946, and the plaintiff asked said agent if the policy would cover any hospital expense, doctor's bills, and disability that might arise in the event said hernia was aggravated, necessitating such expenses, and said agent stated to the plaintiff that said policy would cover such expenses; that at the time of the issuance of said policy the defendant had knowledge of the plaintiff's previous hernia condition, and issued to him said policy with full knowledge of said condition, and charged, accepted, and retained several premiums on said policy; and that the defendant thereby waived any defense it might have had because of the plaintiff's previous condition, and is estopped to set up the same as a defense.

The defendant demurred generally to both counts of the petition upon the grounds that no cause of action was stated therein, and demurred specially to certain paragraphs of count 2 on the ground that they undertook to set up an oral representation by an alleged agent of the defendant made before the execution of the written contract, and that thereafter the parties entered into a written contract which merged any alleged prior oral agreement or representations; and because it was not shown how the defendant had knowledge of the plaintiff's previous hernia condition at the time of the issuance of the policy, nor how the defendant acquired such knowledge thereafter; and because the allegations of the petition undertook to expand the coverage of the policy by waiver or estoppel; and because the petition did not show that the defendant had waived any defense, but did show that the disability for which the plaintiff sued was not covered by the policy, it appearing therefrom that the ailment complained of by the plaintiff is neither sickness nor disease under the terms of the policy.

The trial court overruled the demurrers of the defendant, and the case is in this court on direct exceptions to that ruling. 1. As to count 1 and the demurrers thereto, the controlling questions are, whether said count stated a cause of action based on allegations showing "sickness" within the meaning of the policy, and if so, whether the plaintiff's prior physical condition caused by the hernia would bar a recovery. The defendant's contention is that the physical disability of the plaintiff resulting from a hernia operation is not a sickness or disease, but is the result of an injury.

"Sickness means any affection of the body which deprives it temporarily of the power to fulfill its usual functions." Code, § 102-103. The defendant says that this definition is applicable only in the construction of statutes, but it appears that the definition is a codification from the decision of this court inMartin v. Waycross Coca-Cola Bottling Co., 18 Ga. App. 226,229 (89 S.E. 495), which was an action for damages based on the alleged negligence of the defendant causing sickness of the plaintiff. That decision quotes the definition of sickness in Black's Law Dictionary as including "any morbid condition of the body . . which for the time being hinders and prevents the organs from normally discharging their several functions." The definition of sickness contained in our Code is stated in 36 Cyc. 436. This same definition of sickness has been approved in the Montana case of Murray Hospital v. Angrove, 92 Mont. 101 (10 P.2d 577), and in Alabama in National Casualty Co. v. Hudson, 32 Ala. App. 69 (21 So.2d, 568). The text in 45 C. J. S., Insurance, 970, § 893, states that "Disability resulting from hernia is included in a policy covering disability resulting from illness," citing the Texas case of Massachusetts Bonding Insurance Co. v. Florence, 216 S.W. 471; and we think that "illness" and "sickness or disease" are synonymous terms. See 12 Words and Phrases, 617.

In the absence of Georgia cases holding to the contrary, we are constrained to hold that, under the allegations of count 1, it was a question for the jury to say whether or not the disability of the plaintiff was the result of a sickness within the meaning of the policy. While a hernia is frequently caused by an accident or an injury, it does not follow that a hernia is never the result of a sickness or disease. In Gould's Dictionary of Medicine (1894), pages 380-392, several kinds of hernia are tabulated as diseases, and on page 561 a hernia is defined as "a tumor formed by the protrusion of the contents of a cavity (usually the abdominal) through its wall." In Gray's Attorneys' Textbook of Medicine (2d ed., 1940), page 780, the author discusses hernia due to accident and hernia not due to accident. In Anatomy and Allied Sciences for Lawyers by English (1941), page 199, the two greater groups of hernia are considered as "congenital" and "acquired." Congenital hernia involves the existence of a hereditary muscular weakness in the abdominal wall, whereas an acquired hernia may result from obesity or from various kinds of traumatism. Paragraph 4 of the petition, in both counts, alleged that the plaintiff had a hernia at the time the application was taken, "which had developed on January 4, 1946," and there was no demurrer to these allegations on the ground that they did not show how the hernia developed or what caused it.

The only Georgia case cited by the defendant in support of its contention that the disability of the plaintiff was the result of an injury and not a sickness or disease is Liberty Mutual Co. v. Blackshear, 197 Ga. 334 (28 S.E.2d 860). That was a compensation case dealing with the meaning of the term "hernia" as used in the statute. We do not think that anything said therein is contrary to the conclusion we have reached in this case. The Georgia Workmen's Compensation Act (Code, § 114-412), which was under consideration in the Liberty Mutual Co. case, seems to recognize that a hernia may occur without an accident or injury in providing for "compensation for hernia resulting from injury by accident," and thereby excluding congenital hernia and hernias acquired without injury or accident. The defendant cites some foreign authorities tending to support its contentions, but the greater weight of authority seems to sustain the conclusion we have reached.

2. The next question presented with reference to count 1 is whether the plaintiff was barred from a recovery because of the hernia condition which existed prior to the issuance of the policy. Under the ruling in Metropolitan Life Ins. Co. v.Hale, 177 Ga. 632 (170 S.E. 875), we do not think that the plaintiff was barred. Count 1 alleges that the agent of the company, at the time the application for the policy was taken, was advised by the insured that he had a hernia, and that the agent was asked by the insured if the policy would cover any hospital expense and disability that might arise in the event said hernia was aggravated, and that the insured was assured by the agent that said policy would cover such expenses. Under these allegations, and in the absence of anything in the policy limiting the agent's authority, the agent's knowledge was the company's knowledge. "Conditions which enter into the validity of a contract of insurance at its inception may be waived by the agent and are waived if so intended." Mechanics c. Ins. Co. v. Mutual Real Estate c.Assn., 98 Ga. 262 (25 S.E. 457). "Limitations in an insurance policy upon the authority of the agent of the company to waive the conditions of the contract of insurance are to be treated as referring to waivers made subsequently to the issuance of the policy." Johnson v. AEtna Ins. Co., 123 Ga. 404 (51 S.E. 339, 107 Am. St. Rep. 92); Gulf Life Ins. Co. v. Bloodworth,73 Ga. App. 102 (35 S.E.2d 662).

3. Count 2 contained the same allegations made in count 1, and also alleged that the company had knowledge of the plaintiff's previous hernia condition, communicated by the insured to the agent at the time the application was taken, and issued the policy with that knowledge, and thereafter charged, accepted, and retained several premiums on said policy, and thereby waived any defense it might have had based on the plaintiff's previous condition. Whether the alleged knowledge to the company through its agent of the plaintiff's condition amounted to a waiver, or was more in the nature of notice and estoppel, seems to be immaterial. We think that the rulings on the demurrers to the second count are controlled by the holding in Metropolitan LifeIns. Co. v. Hale, supra, for the reasons pointed out in division 2 of this opinion.

The defendant relies on Fowler v. Preferred Accident Ins.Co., 100 Ga. 330 (28 S.E. 398), Life Casualty Co. ofTennessee v. Williams, 200 Ga. 273 (36 S.E.2d 753, 163 A.L.R. 686), Mitchener v. Union Central Life Ins. Co.,185 Ga. 194 (194 S.E. 530), Fowler v. Liberty National LifeIns. Co., 73 Ga. App. 765 (38 S.E.2d 60), Quillian v.Equitable Life Insurance Society, 61 Ga. App. 138 (6 S.E.2d, 108), and Life Casualty Ins. Co. v. Carter, 55 Ga. App. 622 (191 S.E. 133). We have considered all of these cases and do not think that they require a different holding in the instant case. In most of the cases cited the policy or the application contained a limitation on the authority of the agent to waive any condition in the policy, while the policy (the application is not before this court) here involved contains no such limitation. See National Accident Health Ins. Co. v.Davis, 179 Ga. 595 (176 S.E. 387). Furthermore, there is nothing in the policy at variance with the oral representations alleged to have been made by the agent of the company to the insured at the time the application was taken. Although the insured had a hernia in January, 1946, it appears from the petition that the hernia was not of sufficient severity to be disabling to any extent prior to September 15, 1947, when the policy was written, and we think that it is a question for the jury to say whether or not a hernia not disabling to any extent was a sickness within the meaning of the policy. If the jury should find that the hernia condition of the plaintiff prior to the issuance of the policy was not an "affection of the body which deprives it temporarily of the power to fulfill its usual functions," it would not have been a sickness within the definition of the term contained in the Code, § 102-103. If the insured had a hernia condition which did not amount to sickness prior to the issuance of the policy, it would be immaterial whether he made any representations as to such hernia, and likewise immaterial as to whether the agent made any assurances respecting said hernia being covered by the policy. Our conclusion is that count 2 presented jury questions, under all the facts of this case, as to whether the insured was sick within the meaning of the policy before it was issued, and if so, was that defense waived or was the company estopped from pleading it?

Other cases cited by the defendant, some of which are not referred to herein, are so different on their facts as not to be applicable to this case.

The court did not err in overruling the demurrers.

Judgment affirmed. Sutton, C. J., concurs. Felton, J.,concurs in the judgment.