Home State Life Ins. Co. v. Turner , 183 Okla. 575 ( 1938 )

The words sound health," as used in an insurance contract or application therefor, implies a state of health unimpaired by any serious malady of which the person himself is conscious. It does not mean that the person so described has no latent disease of which he is unconscious.

If I am correct in the above statement, the majority err, particularly in the statement of law reflected by the second paragraph of the syllabus:

"The insurer is not required to go further and establish that the insured, on the date the policy was received, knew that he was seriously afflicted with such fatal malady, or prove the falsity of the statement in the application."

It is recognized that the majority base their decision on the rule stated in the third paragraph of the syllabus of Home State Life Ins. Co. v. Jennings, 179 Okla 39, 64 P.2d 304, distinguished and avoided in the subsequent case of National Life Accident Ins. Co. v. Roberson, 180 Okla. 265,68 P.2d 796.

The doctrine of the Jennings Case follows the Kansas case cited therein, which case is bottomed on a sound health provision as a contractual condition precedent to liability, apparently uninfluenced by a statutory provision denoting such statements representations and not warranties. As applicable to the requirements in Oklahoma, note the case of Priest v Kansas City Life Ins. Co. (1924) 116 Kan. 421, 227. P. 538, 100 A. L. R. 366. The Jennings Case is wholly inconsistent with the Oklahoma decisions of prior and subsequent date, despite statements to the contrary in the opinion. For example, in reference to National Life Accident Ins. Co. v. Wicker.171 Okla. 241, 43 P.2d 50, to which reference is made on page 42, second column, 179 Okla., page 307 of 64 P.2d, in the Jennings Case, it is said:

"* * * The right of the defendant to rely on that defense was not made to depend upon the knowledge of the insured or his opinion as to his then condition."

One has but to read the first paragraph of the syllabus in the Wicker Case to observe the glaring error in the statement above quoted from the Jennings text. In the Wicker Case it is said:

" 'Good health' * * * implies a state of health unimpaired by any serious malady of which the person himself is conscious. [It] does not mean that he had no latent disease of which he is wholly unconscious."

Thus, the insurer relying upon the fact of insured not being in good health was relegated in its defense to what insured knew about his condition and his apparent condition of health.

The Jennings opinion, discussing the House Case (Mid-Continent Life Ins. Co. v. House, 156 Okla. 285. 10 P.2d 718), said:

"And in the House Case, supra, the jury was expressly instructed to determine the issue of fact, whether the insured was in good health, without regard to his knowledge or opinion with reference thereto."

It is true, as shown on page 290, 156 Okla., first column, of the House Case, that the court so instructed the jury at defendant's request, but it is also true that in reference thereto this court adjudged that:

"* * * This instruction was more favorable to the defendant than the defendant was entitled under the rule announced by this court in the Stagg, Clark, Smith and Carroll Cases, supra. * * *"

Therein we determined that such a sound health provision in the contract of insurance was never intended to constitute a warranty or condition precedent to the risk, but that the same serves to protect insurer between the time of application and examination, if any, and delivery of the policy.

As stated in the Jennings Case, this court had not theretofore recognized a distinction between "good health," as used in the application for insurance, and the same term as used in the contract of insurance. The reason for this lack of prior distinction, as shown by the annotations in 100 A. L. R. 365, is that Oklahoma was wedded to the apparent and conscious sound health doctrine. In other words, we reject the view that the fact of sound health, and not insured's appearance and belief in it, is the thing that determines liability. As in the House Case, "good health" means apparent good health without any ostensible or known or felt symptoms of disorder and does not exclude the existence of latent unknown defects.

In that case we admonished that in event insurance companies desired the words "good health" to exclude latent and unknown diseases, they must do so by unmistakable language. Such was, our holding in the following cases: National Life Acc. Ins. Co. v. Shermer (1932) 161 Okla. 77, 17 P.2d 401; National Life Acc. Ins. Co. v. Ware, 169 Okla. 618, 37 P.2d 905; Mid-Continent Life Ins. Co. v. Trumbly, 170 Okla. 639,41 P.2d 913; National Life Ace Ins. Co. v. Wicker, supra.

These decisions followed such cases as National Life Ace. Ins. Co. v. Martin. 35 Ga App. 1, 132 S.E. 120, wherein the rule was announced that:

"A policy applied for and accepted in good faith cannot be avoided by proof that the malady which ultimately occasioned the death must have existed in some incipient form prior to the issuance of the policy, but unknowingly and without at that time manifesting any symptoms or effect, or in any way causing reasonable apprehension or any impairment or derangement of the system, even though, by an acceptance of the contract, the assured may have warranted himself to be in sound health."

Since:

"To hold otherwise would involve far-reaching consequences to those who have been led to rely upon the protection of policies which have been applied for, issued, and accepted in good faith." Metropolitan Life Ins. Co. v. Walters (Ky.)285 S.W. 252; National Life Acc. Ins. Co. v. Wallace, 217 Ky. 160,289 S.W. 219; Etter v. National Life Acc. Ins Co., 228 Ky. 399,15 S.W.2d 242; National Life Acc. Ins. Co. v. Jones, 230 Ky. 222,18 S.W.2d 982; New York Life Ins. Co. v. Rosso, 154 Miss. 196,122 So. 382; Continental Ill. Nat. Bk. T. Co. v. Columbian Nat. L. Ins. Co. (7th Cir.) 76 F.2d 733.

There is the matter of estoppel and waiver based upon the insurance company's knowledge of the condition of health imputed to it by knowledge of the insurer's agents and the inspector's written report to the company at the time of delivery of the policy recommending the risk based on the healthy appearance of insured.

But I do not wish to detract from the importance of the rule of law herein discussed by devoting myself to the latter issue, determinative though it might be.