Johnson v. New York Life Insurance Co. , 165 S.C. 494 ( 1932 )

The conclusion reached in the leading opinion in this case that the judgment should be reversed, and the case remanded, with instructions that judgment be entered up for the defendant under Rule 27 of this Court, is based, as I understand it, upon the holding that the insured made false representations in his application for insurance, as to his consultation with and treatment by physicians, and that he made such false representations with the deliberate intention of deceiving the insurance company and thereby procuring the insurance applied for. The provision in the insurance policy bearing on the question involved and to which reference is made reads as follows: "The Contract — The policy and the application therefor, copy of which is attached hereto, constitutes the entire contract. All statements made by the insured shall, in absence of fraud, be deemed representationsand not warranties, and no statement shall avoid the policy or be used in defense to a claim under it, unless it is contained in the written application and a copy of the application is endorsed upon or attached to this policy when issued." (Italics added.)

Under this provision it clearly appears, as stated in the leading opinion and conceded by appellant, that the representations the appellant alleges the insured made in his application for insurance did not constitute warranties, but merely representations, and, under the well-recognized rule, "in order to avoid the policy it must be shown that they (representations) were fraudulent." In the leading opinion it is recognized that, ordinarily, the question of fraud in cases of this nature is an issue for the jury; but it is contended by the writer of that opinion, concurred in by a majority of the members of this Court, that the undisputed facts in this case give rise to only one reasonable inference, namely, that the insurance policy in question was procured by fraud, and for that reason the trial Judge should have directed a verdict for the defendant. I am unable to agree with this view, but think that the trial Judge, his Honor, Judge Sease, properly submitted the issue to the jury, and letting the jury determine from all of the testimony whether the policy was procured by fraud. In order for the defendant to be entitled to a finding by the jury that the policy was procured by fraud, on the ground under consideration, it was incumbent upon the defendant to establish by the greater weight of evidence, not only that the representations made by the insured in his application for the policy were untrue, but that they were fraudulent; that the insured knew that the representations were untrue, and that they were made with the deliberate intention and for the purpose of procuring from the insurance company the policy in question. Failing in this, it was the duty of the jury to find against the defendant on this issue. While it was the duty of the jury in passing upon this issue to consider all of the testimony in the case, that introduced by the plaintiff as well as that offered by the defendant, it must be kept in mind that the charge was made by the defendant against the insured, and the burden of establishing the charge was upon the defendant throughout the trial. It was not incumbent on the plaintiff to prove that the representations in question were true and made with an honest purpose, nor was it incumbent on the plaintiff to prove that the representations, if not true, were nevertheless made under the belief that they were true; but it was incumbent upon the defendant to establish its charge. The charge in question made by the defendant against the insured is summed up in the following language which I quote in substance from the leading opinion: The charge was, in effect "that the insured had consulted and been treated for alcoholism by at least two physicians within the five years preceding the date of the application; that although the insurer was entitled to know this fact, the insured concealed it from the company and its medical examiner; and that such concealment rendered the policy void in its inception."

The answers to questions the defendant alleges the insured made and relied upon to support the above-stated position are set out in the leading opinion. The defendant offered testimony to the effect that the insured had been in consultation with and had been treated by two physicians for alcoholism within the five years preceding the time the application was made. According to my view, this made an issue for the jury on the question involved. In this connection I shall call attention to the fact that the answers referred to as having been made by the insured to the questions propounded or presented by the company's medical examiner were written by the examiner with no other person present. The lips of the insured are closed. He is dead, and, of course, there was no one to testify as to what took place at the time except the company's examiner. Of course, the Court will assume that the medical examiner acted with an honest purpose, but in my opinion the Court should also assume that the insured likewise intended to be honest and truthful in answering the questions propounded or presented to him by the company's medical examiner. There was no testimony offered that tended to show the insured was not a truthful man. In fact, the plaintiff offered testimony that the insured was a truthful man, and this, according to my view, was a fact to be considered by the jury in passing upon the issue presented. Wingo v. New York Life Insurance Co., 112 S.C. 139,99 S.E., 436; Rogers v. Atlantic Life InsuranceCo., 135 S.C. 101, 133 S.E., 215, 45 A.L.R., 1172. One of the physicians presented as a witness on behalf of the defendant in the course of his testimony stated that he treated the insured on several occasions for alcoholism; that the first time was April 15, 1925, and the last time was September 9, 1927. This physician also stated that during that time he had treated the insured for a number of other troubles. The other physician presented by the defendant as a witness in the case testified to having treated the insured for alcoholism on two occasions, April 16, 1925, and again on November 7, 1928. The application in question was made January 8, 1930. According to the testimony of Mrs. Johnson, widow of the insured, he had not had a physician to treat him or taken any medicine since the month of March, 1928, and, further, that he had not taken a drink of whiskey since November or December of 1928. Under this testimony the jury might reasonably reach the conclusion that it had been so long since the insured had been sick and so long since he had taken a drink of whisky, prior to the time the application was made and the answers given to the questions presented to him, that he did not remember the dates he was treated for alcoholism, if he was treated for that trouble, and, therefore, inadvertently made a mistake in giving the answers. The further fact that he was treated for a number of other troubles at the same time of the alleged treatment for alcoholism may have caused the insured to become confused in answering the questions. As stated above, I assume that the examining physician, who wrote down the answers of the insured to the questions referred to, acted with an honest purpose, but I also think that the Court should assume that the insured in answering the questions presented to him likewise acted with an honest purpose, especially in view of the fact that there was no testimony offered to prove that the insured was not a truthful man, but, on the other hand, the plaintiff offered testimony to the effect that he was an honest and truthful man. It is, therefore, my opinion that under all of the testimony and surrounding circumstances in the case it was an issue for the jury to determine whether or not the insured made false representations when he answered the question as to whether or not he had been treated for alcoholism within the five years preceding the time of answering the questions and also as to whether or not, if a misstatement was made by him in answering the said question, whether it was done with a fraudulent purpose and with the intention of deceiving the defendant and thereby procuring the policy in question. It is also my opinion that, under the facts and circumstances of the case, the materiality of the answers of the insured under consideration was a question for the jury.

For the reasons above stated I am unable to agree with the conclusion reached in the leading opinion, and, therefore, most respectfully dissent.