Bordelon v. National Life Accident Ins. Co.

While I concur in the result reached by my colleagues, because I am of the opinion that the knowledge of Coco was imputed to his employer under the general law and jurisprudence of the State, I am unable to agree in the conclusion that Act No. 144 of 1936 is applicable to this policy of insurance which was issued upon the written application of the assured.

It seems to be the view of the majority that, in order for the insurance company to be exempted from the provisions of Act No. 144 of 1936, it must show that its policy was issued without a medical examination and also without a written application being made by the insured. In other words, the interpretation which has been placed upon that statute is equal to changing the alternative particle "or" to the conjunction "and". I believe that this construction is strained in view of the unambiguous language of the statute and that it serves to defeat the obvious intention of the Legislature.

A brief history of the legislation here involved reveals that, under the original statute, Act No. 97 of 1908, a life insurance company, which saw fit to issue policies without a medical examination of the assured, was conclusively presumed to have full knowledge of his health, habits and occupation and it was precluded from later asserting (when sued upon its policy) that the assured had been guilty of misrepresentation. Such was the construction placed upon the statute by the Supreme Court in Eagan v. Metropolitan Life Insurance Co., 181 La. 16,158 So. 575, and numerous other cases.

In the year 1934, the Legislature, in order to partially obviate the consequences resulting from the strict construction of the 1908 Act by the courts, passed Act No. 160 thereof wherein it is provided that fraud and wilful misrepresentation "shall always be a defense against any suit by the assured, if the insurer shall have obtained an application from the assured as hereinabove provided". The effect of Act 160 of 1934 was first considered by us in Fox v. Life Insurance Company of Virginia, 170 So. 55. There, it was held that, under the statute, the insurance company was entitled to assert the defense of fraud in the procurement of the contract where it had obtained from the insured a written application, even though it did not require a medical examination for the purpose of determining the desirability of the risk.

Later, in the Succession of Dekan v. Life Insurance Company of Virginia, 172 So. 37, we held that there could be no fraud in procurement of the insurance where the agent representing the company had actual knowledge of the health, habits and occupation of the assured. We further decided that Act No. 160 of 1934 had not repealed Act No. 97 of 1908 and that, where it appeared that the agent of the insurance company knew that the answers made by the assured, in his application for insurance, were false, the company was presumed to be possessed of such knowledge since Act No. 97 of 1908 created a legal presumption to that effect.

However, when the Legislature in 1936 enacted the statute now under consideration, it specifically exempted from its provisions all insurance companies writing policies either upon the faith of a written application by the assured or upon a medical examination. The substance of the Act is no more than a reenactment of the provisions of Act No. 97 of 1908 but it contains a specific proviso that it "shall not apply in the cases of reinstatement of policies that have been permitted to lapse,or to policies which have been issued upon a written application or medical examination of the insured". (Italics mine) It seems to me that the above quoted language is free from ambiguity and discloses a clear legislative design to make the law apply only to insurance companies issuing policies without a written application.

Apart from this, I feel that the majority have correctly determined the case forasmuch as, under the settled jurisprudence as set forth in Vol. 37, Section 262(b) of Corpus Juris, the knowledge of the insurance agent is that of his principal. It is too plain for extended discussion that fraud can only exist in cases where the party pleading it has believed the false representation and has acted on the faith of it. Since I am satisfied that Coco was fully advised and actually knew of the condition of the assured's health, the insurance company was not defrauded because the agent's knowledge must be imputed to his principal in the absence of a stipulation in the policy to the contrary.

For the reasons given, I respectfully concur in the decree.