Dulany v. Fidelity & Casualty Co.

This is an appeal from a judgment of the Superior Court of Baltimore City in favor of the appellee, as defendant below, in a suit on one of its disability policies. The policy of which a copy appears in the record, insures the appellant, to whom it was issued, against disability or death resulting from accident and also against disability resulting from disease.

By the terms of the policy the appellant was entitled to receive from the company $25 per week during a disability, resulting from accident, which totally prevented him from attending to any of the duties of his occupation; but to an amount not exceeding $5,000. If the injuries causing the disability were received by the assured while riding on an elevator or as a passenger in a public conveyance propelled by steam, compressed air, electricity or cable; or in consequence of the burning of a building while he was in it he was entitled to receive $50 per week during total disability but to an amount not exceeding $10,000. If the injuries so received by the assured resulted in only partial disability he was entitled to receive during such disability, for a period not exceeding twenty-six weeks "a sum to be determined by the company but not less than twenty-five per cent nor greater than seventy-five per cent of the weekly indemnity before specified depending upon the extent of the disability."

The policy further provided that "If the assured shall suffer from bodily disease or illness not hereinafter excepted and such disease or illness shall wholly disable and prevent the assured from performing any and every kind of duty pertaining to his business or occupation the company will pay to him twenty-five dollars ($25) a week for the period of such disability during which he shall be necessarily confined to the house; any disability of less than seven consecutive days or in excess of fifty-two weeks is not covered."

Other provisions of the policy, pertinent to the present case, required prompt written notice to be given to the company at New York City of any disability for which a claim was to be made with full particulars and the name and address of the assured, and affirmative proof of the duration of the disability to be furnished, within two months after its termination, to the company. It was also provided in the policy that "Legal proceedings for recovery hereunder may not be brought before the expiry of three months from date of filing final proofs at the company's home office, nor brought at all unless begun within six months from time of * * * the termination of disability." It was further provided that claims not brought in accordance with the foregoing provisions would be forfeited to the company.

The policy also provided that an agent had no authority to change it or waive any of its provisions, and that no notice to any agent or knowledge of his or of any other person should be held to effect a waiver or change in the contract or any part of it, and specified that the only method in which a change in the policy or a waiver of any of its provisions could be made was by an endorsement thereon signed by the officers of the company.

Attached to the policy is a series of interrogatories and answers thereto made by the assured, designated a "Schedule of Warranties" on which appears the following statement designated "O."

"I have not been disabled nor have I received medical or surgical attention during the past seven years, except as follows: None."

The appellant testified that he took out the policy through the defendant's agent, Mr. Harrison, who approached him about it and he took his word for the policy. The record also contains evidence tending to show that on January 2d 1905, the appellant had a slight accident in his automobile which skidded on a wet pavement and struck the curb stone and jolted him, but he was not thrown out and "he did not feel any effects" from that accident. Two days thereafter as he was getting off a trolley car at the corner of Calvert and Pleasant streets in Baltimore the motorman started forward and he was thrown from the car and his body received a severe twist. He walked up the hill on Pleasant street toward his office, and as he was nearing the top of the hill he felt very severe pains on his left side such as he had never had before in his life. As soon as he reached his office on Charles street he examined himself and found a swelling at the base of his abdomen about the size of an English walnut which pained him very badly. He then went to see Dr. Thomas who said it was a rupture and sent him to Dr. Finney who examined him and advised an operation and he went to the Union Protestant Infirmary to be operated upon. He there underwent another examination by Dr. Finney assisted by the house surgeon at which it was discovered that he had acute pulmonary tuberculosis of recent development, but he was operated on for the hernia and was thereby confined to the hospital for a little over three weeks.

He then promptly, before he had entirely recovered from the operation, went, under his physician's advice, to a sanitarium in the Adirondacks to be treated for the tuberculosis. He remained under treatment in the Adirondacks, and neighboring regions resorted to by consumptive patients for that purpose, until November 17th, when he returned to Baltimore and again took up his business. About the middle of April he paid one short visit to Baltimore but promptly returned on his physician's positive advice to the Adirondacks. During the first month of his treatment he remained in the house or on its porch where he was required to remain in order to be in the open air as much as possible. He took his exercise on the porch and he testified that he did not think that he went off of it more than three times in that month and then only to go to see his doctor. He also described his method of living during the remainder of his treatment in that region. There was other testimony tending to show that between April and November of the time spent by the appellant in the Adirondacks he was never sick enough to necessitate his staying in his house.

Before going to the hospital the appellant saw Mr. Steele, the Baltimore manager of the appellee company, and told him about this claim and that he could not tell when he ruptured himself, whether it was from the automobile or the street car accident. He also told Mr. Steele, after he had gotten out of the hospital, that he was going to the Adirondacks when Steele said "the policy was not good for that," and called his attention to the clause in it restricting the company's liability to the time during which he was closely confined to the house.

The appellant filled out upon one of the company's blanks thereafter sent to him for that purpose by Mr. Steele a detailed statement of his claim which with the attending physician's statement was sent to the company on May 1st with a request to be advised if it was not complete and was received by the company without protest or objection. In that claim the appellant stated that he had been suffering from illness which he described as "acute pulmonary tuberculosis and surgical operation for hernia performed by Dr. Finney," and also gave the other information called for by the company's blank on which it was made out, but nothing was said as to the cause which produced the hernia.

The appellant on cross-examination stated that for five or six years he had a clearing of his throat and during one winter had gone about once a week to Dr. Fleming to have his throat and nostrils sprayed to get rid of it. He had also suffered now and then from a cold in the head and had had the grippe over three or four years before the trial for which he had been treated by Dr. B.B. Brown. There was also testimony by Dr. Thomas, the appellant's family physician, that he had a chronic throat condition which is common to nine-tenths of the people in Baltimore where what is known as a throat climate prevails, and that medical treatment is not ordinarily resorted to for that trouble but that the appellant was rather prone to consulting physicians.

The declaration in the case contains three common counts inassumpsit and two special counts on the policy one for the injury received on the street car resulting in the hernia, and the other for the disability resulting from the tuberculosis. To this declaration the defendant company in the first instance filed the general issue pleas and subsequently by leave of Court filed a special plea setting up an alleged breach of warranty on the part of the plaintiff in falsely making the answer to the clause designated "O," in the application for the policy, inquiring whether he had received any medical or surgical attention during the seven years prior thereto. To this plea the plaintiff demurred and his demurrer was overruled and he joined issue thereon.

There are three bills of exceptions in the record, two to rulings on evidence, and the other to the granting of the defendant's third prayer by which the jury were instructed to render the verdict in its favor on which the judgment appealed from was entered.

The first exception was to the Court's refusal to allow the appellant when on the stand to reply to a question asking him to state what report he made to Mr. Harrison or to the company in answer to the clause which follows the letter "O", in the application for the policy, relating to the surgical or medical attendance during the past seven years, except as there follows. It does not appear from the record what answer the witness would have made to the question nor is there any statement or offer of what the plaintiff proposed to prove by the witness in that connection and we are therefore unable to say whether the plaintiff was injured by the Court's ruling. Inasmuch however as the question was a proper one and the case must be remanded for a new trial for error in granting the defendants third prayer we will briefly express our views upon the admissibility of statements made to an agent of an insurance company under the circumstances referred to in the question.

The policy before us contains the usual provision that no agent has power to change it or waive any of its terms but this Court has several times decided that such a clause must be construed to relate to the provisions of the contract itself after it has gone into effect and not to apply to the conditions which relate to the inception of the contract when it appears that the agent has delivered the policy and received the premiums with full knowledge of the actual situation. Hartford Fire Ins. Co. v.Keating, 86 Md. 146; Mallette v. British As. Co.,91 Md. 484. The same doctrine has been announced by the United States Supreme Court in N.J. Mut. Life Ins. Co. v. Baker,94 U.S. 610 and Ins. Co. v. Mahone, 88 U.S. 593, and by many of the Courts of other states in the cases collected under note 5 on page 943 of 2nd. ed. of A. E. Encycl. of Law. If the actual facts were explained by the assured to the agent of the company through whom the policy was delivered to him and the premium collected and that agent undertook to determine whether the facts were material to the risk and wrote or instructed the appellant to write the answer appearing on the application, the company would be estopped to set up those facts to defeat an action to recover on the policy.

The second exception was taken to the Court's refusal to admit in evidence a letter written by the plaintiff's attorney, to the company's Baltimore Manager, Mr. Steele, prior to the institution of this suit in reply to a letter received from the manager to whom the claim had been referred by the company for adjustment. The plaintiff's attorney, on being asked by the Court for what purpose the letter was offered, replied only for the purpose of bringing in the whole chain of correspondence and to show that a personal interview was requested again after receiving that and I want to offer the letter following that from Mr. Steele asking counsel to have another conference in reference to this matter. As none of the conferences between the representatives of the parties to the controversy resulted in its adjustment or compromise we see no reversible error in rejecting this letter.

At the close of the case the defendant offered three prayers of which the first and second were rejected and the third was granted, and the appellant excepted to the Court's action in granting it. The third prayer is as follows: "The defendant prays the Court to instruct the jury, the plaintiff has offered no evidence legally sufficient to entitle him to recover in this case, because this suit, so far as it relates to the plaintiff's claim on account of the hernia, was prematurely brought, and, he cannot recover on account of the tuberculosis because there is no evidence in the case legally sufficient to show that said tuberculosis ever necessarily confined him to the house, and that by the uncontradicted evidence in this case it appears that the plaintiff within seven years prior to the issuance of the policy on which this suit is brought, several times received medical attention and was under treatment for throat trouble for nearly an entire winter as described by the plaintiff himself in his evidence that there was therefore a breach of the warranty recited in the policy, and this breach was as a matter of law material to the risk as to the clauses of the policy relating to illness and that therefore the verdict must be for the defendant."

This prayer, in our opinion, should not have been granted. In the first place the suit was not prematurely instituted in so far as it referred to the hernia claim. The company, through its resident manager Steele, had notified the appellant that the policy did not cover the disability resulting from consumption. It had also, in a letter appearing in the record, addressed to the appellant's counsel by Mr. Steele on June 7th, 1905, after the company had referred the claim to him for attention, asserted that its liability for injury occasioned by the hernia was limited to the time the appellant was confined to his house and the hospital i.e. from January 11th to February 2nd. It refused to treat the cause of the hernia as an accident but insisted that it should be treated as a disease and made subject to the limitation attached by the terms of the policy to disability arising from that cause. Now we have already seen that the policy limits the company's liability for disability from disease to the time during which the assured "shall be necessarily confined to the house" while it imposes no such limitation upon its liability for disability arising from accident. The appellant, according to his testimony, hadalways claimed that the hernia was produced by accident and the only medical testimony in the record on this subject is that of Dr. Thomas who said that it was not congenital and ascribed it to the accident in alighting from the trolley car.

Under these circumstances we think that the provision of the policy limiting the time within which suit could be brought thereon was waived by the company and that the appellant did not sue prematurely. 1 Cyc. 281-2; Phillips v. U.S. BenevolentSocy., 120 Mich. 142; Balto. Ins. Co. v. Loney, 20 Md. 40.

In the second place we think the instruction contained in the prayer that there was no evidence in the case legally sufficient to show that the tuberculosis ever necessarily confined the appellant to the house was erroneous. The policy undoubtedly in plain language limits the disability from disease provided for by it to such as necessarily confines the assured to the house. Under the repeated decisions of this Court the policy must, like other contracts, be construed according to the sense and meaning of the language in which the parties have seen fit to express themselves and they must abide by that language even though its selection turn out to have been unwise or unfortunate. A party seeking to secure insurance against a certain contingency must pay due regard to the contents of the policy offered him and select one which plainly provides for the risk which he seeks to cover. At the same time particular expressions found in a policy should not receive a rigid interpretation at the hands of a Court but should be construed in reference to their context and in such manner as to give due effect to all parts of the instrument.

The expression "confined to the house" in the present case is used, in a policy which upon its face undertakes for a consideration to insure against disability caused by diseases, not therein excepted (and consumption does not appear by the record to be excepted), for the obvious purpose of describing the duration of the period for which the insured, when totally disabled by disease from discharging the duties of his occupation, shall be entitled to draw a weekly indemnity. That purpose we think would be fully gratified by construing confined to the house to mean confined to any part of the house either inside of the doors or upon the porches or verandas attached to it on the outside. It is a matter of common knowledge that the most approved modern method of treating all diseases of the respiratory organs involves the constant or almost constant exposure of the patient to outer air. Sometimes this result is attained by locating the patient inside of the house and keeping the windows open, at other times it is accomplished by moving the couch or chair occupied by him out upon the porch. It cannot be supposed that the company, which is fairly chargeable with this common knowledge, meant by the use of the expression under consideration to indirectly exclude from the benefits of its policy the victims of a well known and widely prevalent disease which was not mentioned in the list of excepted disease contained in the policy. The plaintiff's own evidence, if believed by the jury, would have justified them in finding that he had been confined to the house, according to the construction which we have said should be given to the policy, during part of his stay in the Adirondacks.

In the third place the granted prayer erroneously instructed the jury as matter of law that the failure to mention in the application for the policy the fact that the applicant had at different times within the prescribed period received medical attention for throat trouble, constituted a breach of warranty material to the risk insured against relating to illness. Whatever view may be held in other jurisdictions, this Court has definitely decided that the materiality of representations made in an application for a policy of insurance is ordinarily a question for the jury. Bankers Life Ins. Co. v. Miller,100 Md. 1; Md. Casualty Co. v. Gehrman, 96 Md. 634; Mutual Ins.Co. v. Deale, 18 Md. 184. In Miller's case, where a woman who was suffering from cancer of the uterus upon whom two surgical operations therefor had been performed, obtained a policy of insurance on her life upon the representation that she was in good health and had never had cancer or uterine disease of any kind. Within six months thereafter the cancer proved fatal to her. We there held that as it was palpable and manifest from the uncontradicted testimony and from the nature of the representations themselves, which related to a disease having a tendency to shorten life that they were material to the risk, the Court should have so instructed the jury, but we also stated that the materiality of such representations was ordinarily a question for the jury. The present case does not fall within the class to which Miller's case belonged, as here the only medical testimony appearing in the record as to the nature of the assured's throat trouble tends to prove that it was trivial and unimportant.

For the error in granting the defendant's third prayer the judgment appealed from must be reversed and case remanded for a new trial.

Judgment reversed with costs and case remanded for a newtrial.