Opinion
No. 37325.
December 31, 1949.
1. Parties — assignments — trial — reopening plaintiff's case.
The insured in a hospitalization policy assigned it to her husband and thereafter sued on it in her own name. At the close of her evidence on the trial of the case, the defendant moved for a peremptory instruction on the ground that the husband, the owner of the policy, was not a party. Plaintiff thereupon moved that she be allowed to reopen the case and to introduce her husband as a witness, which being granted, the husband testified that he waived and renounced in favor of his wife all rights under the policy, and the court permitted a recovery by the wife in her own name: Held that for two reasons there was no error, first, that it was within the discretion of the court, not abused in this case, to allow the reopening, and second, that under the statute the wife as the original party to the assignment could maintain the action in her own name. Sec. 5684, Code 1942.
2. Insurance — hospitalization policy — good health of insured at time of delivery.
When a hospitalization policy contains a provision that it shall not take effect unless the applicant at the time of its receipt is in good health, and the defense by the insurer in action on the policy is that the applicant was afflicted with gall bladder trouble prior to and at the time of the issuance of the policy and was therefore not then in good health, the burden of proof to establish the stated affirmative defense is on the insurer, and when instead the evidence shows that the insured was in a reasonably good state of health at the time mentioned, the defense is not maintained.
3. Insurance — good health.
Good health as employed in insurance contracts ordinarily means a reasonably good state of health and does not mean perfect health.
4. Appeal — record controls on review.
In the review of a case on appeal the court is limited to the facts which are of record and the reasonable inferences therefrom.
Headnotes as approved by Smith, J.
APPEAL from the circuit court of George County; L.C. CORBAN, Judge.
O.F. J.O. Moss, for appellant.
There were two principal issues developed on the trial of this cause, the first of these being an issue of fact and the second being an issue of law, as follows: 1. Was the appellee in bad health or in good health at the time said policy of insurance was delivered and received on May 7th or 8th, 1948; and did the cholicystitis causing appellee to be operated on July 8, 1948, pre-exist the issuance of said insurance policy?
2. After the assignment of a chose in action, can the assignor institute and maintain a suit thereon solely in her own name without showing that such suit is brought for the use and benefit of the assignee who is not joined as a party in the cause, and then on the trial of the cause seek to repudiate and abrogate the written assignment through testimony of the assignee to the effect that the assignor is still the owner of the chose in action and will receive all benefits through recovery thereon?
We respectfully submit that the fact the application or a copy thereof was not attached to the insurance policy at the time of delivery thereof to the appellee did not preclude appellant from showing that appellee was afflicted with pre-existent cholicystitis and was in bad health prior to and at the time of the issuance of said insurance policy.
The law in this state is well settled in this respect by the case of Metropolitan Life Ins. Co. v. Scott, 160 Miss. 537, 134 So. 159, and cited under the annotations in 93 A.L.R. at page 388. The first syllabus of the Supreme Court's opinion being as follows: "Insurer's failure to deliver copy of application with life policy held not to preclude reliance on express conditions appearing in policy itself (Code 1930, Section 5174)." (Code 1942, Section 5684).
It has been the law in this state for three-quarters of a century that "All conditions and stipulations contained in the body of a policy of insurance are, prima facie, warranties; to the absolute truth of which the parties pledge themselves." Planters' Ins. Co. v. Melers, 55 Miss. 479, 30 Am. Rep. 521. And for a like number of years it has been the law that all warranties made by an insured must be literally true, and if untrue the policy is thereby avoided even though such warranties be immaterial. Cooperative Life Ass'n. v. Leflore, 53 Miss. 1; Life Cas. Ins. Co. of Tenn. v. Kelly, 202 Miss. 319, 32 So.2d 120.
We therefore respectfully submit that where the evidence thus shows as in this case that the insured was chronically ill for a long period of time just before applying for a hospital indemnity policy of insurance, that the insured was diagnosed as suffering with chronic cholecystitis from ten to thirty days subsequent to the receipt of such insurance policy, that the insured was operated for chronic cholicystitis within sixty days after receipt of such insurance policy, and said insurance policy provides on its face that the insured must be in good health at the time of the issuance and receipt thereof, then in a suit founded on said policy the jury should certainly determine whether or not the insured was in good health at the time of receipt of the policy and whether the disease requiring the operation was pre-existent. In fact, nowhere in the record do we find any evidence offered by appellee to the effect that she was in good health. So it occurs to us that the trial court peremptorily instructed for the wrong party, and the Supreme Court should reverse and render judgment for the appellant rather than reverse and remand this cause.
The evidence as shown by the record raises a presumption that appellee was not in good health at the time she received said policy of insurance, and a presumption that appellee was afflicted with chronic cholicystitis long before she applied for said insurance. Of course, these are rebuttable presumptions, but once these presumptions were raised by the evidence, the burden then devolved upon appellee to rebut them, and she failed to assume and meet this burden. Dr. J.T. Thompson's written statement of appellee's past medical history and diagnosis of chronic cholicystitis, coupled with other evidence of chronic illness, raised a presumption that the cholicystitis was pre-existent, but in fairness to the court we must say that we believe appellee did offer evidence to rebut this presumption in that Dr. R.L. Benson testified appellee, in the doctor's opinion, had no cholicystitis symptoms prior to May or June of 1948, and this contradictory evidence then left an issue of fact for the jury to determine. However, nowhere in the record is any evidence rebutting the presumption (in fact, positive testimony of appellee and her witnesses) of appellee's chronic illness existent for a long time prior to May, 1948, and her bad health at that time. (Infection and malfunction of the gall bladder just does not develop suddenly and "over-night" requiring its immediate removal; and constant headaches, backaches, frequent epigastric pain, excessive gas and indigestion indicate that appellee's chronic illness in 1947 and 1948 was gall bladder trouble). And because the evidence that appellee was in bad health at the time the policy was received was not rebutted, we urge that this cause should be reversed and judgment rendered for the appellant by this honorable court.
Lastly, we turn to the matter of the assignment by appellee of all her rights, if any, under the policy to her husband, Thomas Lee Walker. The point we raise under this issue is a technical one, but apparently the exact point has not previously been before this court.
Section 1448, Code 1942, provides that a suit on a chose in action may be brought and prosecuted in the name of the assignor, or the court may allow the assignee to be substituted as a party plaintiff in said action. We point out, however, that this statute does not authorize suit to be brought on the chose in action and prosecuted solely in the name of the assignor for the use and benefit of the assignor as if the chose in action had never been assigned.
We therefore contend that plaintiff in the court below, appellee here, was compelled to show that this suit was brought and prosecuted for the use and benefit of her assignee, or that the assignee be made a party. When this issue was raised by appellant in the court below, the lower court erred in not requiring proper amendment. Final judgment for appellee in this cause as the same was tried would not constitute res adjudicata against the assignee Thomas Lee Walker, husband of the appellee.
William S. Murphy, for appellee.
Counsel for appellant determines that two principal issues were developed on the trial of this cause, — one an issue of fact and the other an issue of law.
We will not attempt to argue the assignment feature, for the reason that Section 1448, Code 1942 provides for suit to be prosecuted in the name of the assignor. In answer to the other proposition we respectfully submit that there is no dispute as to the testimony. There is no evidence to show that any gall bladder trouble existed prior to the period May 15th to June 15th, and the record shows that the physicians themselves did not know of the gall bladder trouble until July 8, 1948.
Attempt is made in appellant's brief to show by the definition of Webster's dictionary that the word "chronic" means of long duration. However, the evidence does not show that the condition existed prior to the said period above mentioned. The condition could have existed one full day and still fall within the definition of "chronic". There is no evidence to show the condition existed prior to the period May 15th to June 15th, and the appellant cannot by inference or suggestion extend the condition beyond that period.
Notwithstanding the above, appellant is estopped by the very terms of the policy itself, and by Section 5684 to deny that this appellee did not develop gall bladder trouble until some time during the latter part of May or June, 1948, and that the policy of insurance was in force.
Unless the insured is delivered a copy of the application with the insurance policy or a copy of said application for insurance furnished the insured, the Insurance Company is estopped to deny that any of the statements in the application are true. Section 5684, Code 1942; National Life Accident Insurance Company v. Prather, 169 Miss. 898, 153 So. 881.
Appellant, under a hospitalization policy, dated May 1, 1948, insured appellee against "financial loss due to hospital residence, surgical operations and certain other expenses * * * (b) resulting from sickness which is contracted while this policy is in force, herein called `such sickness' * * *". The policy contains, among General Provisions, this further condition upon right to indemnity thereunder: "2. The provisions of this policy * * * shall not take effect * * * unless this policy has been received by the applicant while all the Insured are in good health and free from injury."
The policy was received on or about May 7th or 8th, 1948. Appellee having found it necessary to enter a hospital, on advice of her physician, did so on July 7, 1948, where she remained for approximately twelve days, and undergoing an operation for gall bladder trouble, She filed claim for the indemnity under the policy schedule, with due proof as required, which the appellant refused to pay.
Appellee thereupon filed suit in the court of a justice of the peace and recovered judgment for the full amount claimed, $191. Appellant appealed to the circuit court, where the case was tried de novo, and resulted in a peremptory instruction to the jury to find for plaintiff in the amount of $181. Appellant's motion for a peremptory instruction in its behalf was overruled. The latter appealed here.
The case having originated in the court of a justice of the peace, although appellee filed a declaration, appellant filed no pleas. Its defense, however, was that appellee's claim was not within the terms of the policy because she was not in good health at the time she received it on May 7, 1948, for the reason that her ailment, cholicystitis, or gall bladder trouble, for which she was operated upon, "pre-existed" the issuance of the policy — in other words, was not contracted "while this policy is in force." In the circuit court trial, another issue arose, dealing with an assignment of her alleged rights under the policy of her husband, which we will reach later in this opinion.
Decision on the merits of appellant's defense as to the facts, and their relation to the policy provisions, supra, require a summary of the evidence. In her testimony, the appellee, Mrs. Dela Lee Walker, testified that she went to the hospital on July 7, 1948, for gall bladder removal, stating that to her knowledge she had never had it before, and no one had ever told her she had gall bladder trouble prior to the issuance of the policy. On cross-examination, she admitted she had been under the care of her physician, Dr. Benson, for a number of months in 1947 for a chronic arthritic condition, from about April to December. She had also undergone a pelvic operation some years previously.
She, in connection with the proof of her claim for indemnity when submitted to appellant insurance company, had consented for her physician, Dr. Benson, and the operating surgeon, Dr. Thompson, to furnish her case history and diagnosis of her trouble, which required hospitalization. This document revealed that her trouble was chronic cholecystitis, with pain "in hypochondrium region"; and that her past "medical history pertaining to this disability was characterized by attacks of epigastive pain — repeat stomach and excessive gas — and indigestion." The statement, however, was further to the effect that she had had no chronic or constitutional disease, and that the operation performed in the Jackson County Hospital was a Cholecystectomy. In contradiction to a part of the foregoing statements, however, the case history concluded with the statement that the doctors' final diagnosis of her case was chronic cholecystitis.
Dr. Thompson, the surgeon, did not testify, but Dr. Benson, the physician, was introduced as a witness for the plaintiff. He testified that he examined appellee about June 15th, at her home and he found her suffering severe pain in the upper part of her abdomen. He gave her a sedative, and kept her under observation for a few days, when he gained the impression appellee was suffering from "acute cholecystitis". It is here to be borne in mind, the case history contained the final diagnosis as chronic cholecystitis. However, she was hospitalized on his advice, her condition diagnosed as gall bladder trouble, and the operation was performed. Dr. Benson further testified he treated appellee in April 1947 for a back trouble, and in the early part of 1948, and nothing at that time had any reference to gall bladder conditions, the first indications of which appeared in the following June.
On cross-examination, the doctor stated that appellee had a chronic condition, sacro iliac, from April 1947 until early in 1948, being continously under his care. He said: "It was the 15th of May, 1948, with reference to gall bladder trouble," although as shown, supra, he stated that he first examined appellee on June 15th, which discrepancy he attributed to some confusion as to dates. However, both dates were later than that of the receipt of the policy, May 7th or 8th. However, since it is clear that the hospitalization began on July 7th, a short while after the diagnosis, Dr. Benson's fixation of it on June 15th was the correct date.
In the circuit court, the plaintiff then rested her case, and appellant moved the court for a peremptory instruction, for the reason that the policy and all her rights under it had been assigned by appellee to her husband, who was not a party to the suit. It is uncontroverted that such assignment had been made. Immediately, appellee moved the court for leave to reopen her case, which, over objection by appellant, was permitted. The husband, Mr. T.L. Walker, was put on the stand and stated that he authorized appellee to bring the suit in her name, and he waived all his rights under the assignment, and whatever was recovered in the suit, with his consent, would go to his wife for the benefit of her hospital. After this testimony was concluded, appellant renewed its motion on the same grounds, which was likewise overruled. Appellant then offered its agent, who took the application, whose testimony in our opinion was of no benefit in the trial of this lawsuit on the issues before the court.
(Hn 1) Appellant earnestly contends that it was error to permit the reopening of appellee's case, but, since it was in the discretion of the trial court, and we cannot say this discretion was abused, we do not agree that it was erroneous. It is further contended, on the part of appellant that Mr. Walker's waiver and renunciation of the assignment from the witness stand was ineffectual and should not have permitted appellee to recover in her own name, and that she should, at least, have sued for the use of her husband, as assignee. Appellee also argues that no notice of misjoinder or nonjoinder was given in accordance with Sections 1457-1458, Code 1942. However, it is not necessary to adjudicate those points as we are of the opinion that the court was correct in permitting the case to proceed and in overruling appellant's two motions by virtue of Section 1448, Code 1942, which provides: "* * * In case of a transfer or an assignment of any interest in such chose in action before or after suit brought, the action may be begun, prosecuted and continued in the name of the original party, or the court may allow the person to whom the transfer or assignment of such interest has been made, upon his application therefor, to be substituted as a party plaintiff in said action."
This brings us now to consideration of the question whether or not appellant had a right to defend on the grounds that have been detailed, supra, since no copy of the application was attached to the policy or delivered to appellee, as assured. Appellee contends it had no such right on the basis of Section 5684, Code 1942: "All life insurance companies doing business in the state of Mississippi shall deliver to the insured with the policy, certificate or contract of insurance in any form a copy of the insured's application, and in default thereof said life insurance company shall not be permitted in any court of this state to deny that any of the statements in said application are true."
(Hn 2) The appellant did not ground its defense upon attempted denials of any statements in the application. Its defense was that appellee's sickness was not contracted while the policy was in force, and that she was not in good health when she received the policy, and, therefore, her case was not embraced within the provisions for indemnity under the policy.
Appellee cites National Life Accident Insurance Company v. Prather, 169 Miss. 898, 153 So. 881, wherein the insurance company failed to attach a copy of the application to the policy or to deliver one to the assured, yet, nevertheless, attempted to deny liability because of misstatements in the application. Such is not the situation here, and that case, therefore, is not in point.
Appellants rely upon our decision in the case of Metropolitan Life Insurance Company v. Scott, 160 Miss. 537, 134 So. 159, 161, where, as here, the insurance company contended, not that assured in the application had misstated material and pertinent facts, but that her claim did not come within the terms of the policy. There, as here, no copy of the application accompanied the policy or was delivered to assured. We held it was unimportant, because of the nature of the defense, as to which we said: "The appellant by its pleadings did not rely upon the falsity of any statements or the breach of any warranty found in the application itself, but relied exclusively upon the terms of the policy as the basis of the defense interposed, and it contends that the existence of an application not incorporated into or attached to the policy by reference, and not delivered to the insured with the policy, does not preclude it from relying on breaches of conditions or warranties contained in the policy itself." So, the appellant's position is correct, as between the two cases repectively cited, but neither party seems to have observed that the statute specifies life insurance, with which both decisions deal, while in the case at bar, we are considering only hospitalization insurance, not mentioned in the statute.
Irrespective of those statutes and decisions, the ultimate solution of the issues of this action depends upon the facts, and the propriety of the grant by the trial court of a peremptory instruction to the plaintiff, appellee here, all of the material testimony having been summarized, supra. (Hn 3) Although appellant filed no pleas, since the action originated in the justice of the peace court, nevertheless it set up an affirmative defense, and the burden of sustaining the same was upon it, and in our judgment this was not achieved by the appellant. It offered no evidence on the merits, depending upon cross-examination, and the case history and diagnosis of appellee's trouble. Certainly, even if it can be conceded that there are some troublesome inconsistencies and some vagueness in it, it cannot be said that the evidence established and sustained the defense interposed by appellant — that is, the appellee's gall bladder trouble ante-dated her receipt of the policy, and that she was not in good health when she received the policy on May 7th or 8th, 1949. The illnesses prior to 1948 seemed to have all cleared up and not to have affected the health of assured in May 1948, and that so far as they were concerned she was in reasonably good health when she received the policy. (Hn 4) "Good Health", as employed in insurance contracts, ordinarily means a reasonably good state of health, and does not mean perfect health. Woodmen of the World Life Insurance Society v. Johnson, 196 Miss. 1, 16 So.2d 285.
(Hn 5) The gall bladder trouble, whether acute or chronic, is shown not to have started before June 1948, more than a month after appellee received the policy on May 7th, or 8th, 1948. The assured was not put through a medical examination, when applying for the policy, as such examinations are not required of applicants for hospitalization policies by appellant company. This examination, if it had been made, would of course, have thrown much light on the condition of appellee's health, but without it we are limited to the facts which are of record, and reasonable inferences therefrom, as detailed supra.
In view of what we have said above, it follows that the judgment of the trial court must be, and it is affirmed.
Affirmed.