Opinion
Decided October 7, 1929.
Insurance — Accident and health — Coverage for sickness contracted thirty days after policy date — Insurer liable for disability from recurring stomach ulcers, when.
Policy indemnifying assured against loss resulting from sickness or disease contracted and disability beginning not less than 30 days after date of policy covered loss to assured by disability from recurrence of stomach ulcers, for which he had undergone operation before date of policy, of which insurer had full knowledge; the acceptance of assured for insurance with such knowledge warranting reasonable inference that the assured and company believed that assured had made full recovery after said operation.
ERROR: Court of Appeals for Cuyahoga county.
Mr. E.A. Binyon, for plaintiff in error.
Mr. I. Grohs and Mr. Alfred DeLorenzo, for defendant in error.
In the municipal court of Cleveland the defendant in error, Ben Wheatman, recovered a judgment against plaintiff in error in the sum of $1,100. The claim of defendant in error asserted in the trial court was that on or about October 1, 1927, the Commercial Casualty Insurance Company issued to him what is denominated as an accident and health insurance policy; that, in consideration of the issuance of said policy to him, he paid the insurance company the sum of $76.10; that by the terms of the policy the company agreed to indemnify him for "disability by sickness;" that the policy provided for an indemnity of $200 per month; that plaintiff became ill and was totally disabled from about November 26, 1927, until March 2, 1928; that after that period he was sent home from the Mayo Brothers Clinic at Rochester, Minnesota, and advised by his physician to refrain from performing any work for a period of at least three months; that by reason thereof he claims as for partial disability, which is $100 per month, the sum of $300, making a total of $1,100.
The statement of defense filed by the insurance company admitted that it was a corporation; admitted that it issued to the plaintiff the policy set forth in the amended statement of claim; and further admitted that plaintiff paid the sum of $76.10 as a premium therefor. The statement of defense denied that the assured became ill on or about November 26, 1927, and further denied that it was indebted to him in any sum whatsoever.
At the conclusion of all the evidence counsel for the insurance company moved the court to direct the jury to return a verdict in its favor, which motion was overruled and exception taken. A verdict was returned for the assured in the sum of $1,100. A motion for new trial was filed, which was overruled, and due exception was taken.
It is claimed that, under the terms of the policy, no liability attached to pay indemnity. We are referred to the following provisions found in the policy:
"Does herein insure Ben Wheatman of Cleveland, Ohio, from the first day of October, 1927, beginning and ending at 12 o'clock noon, standard time * * * against loss resulting directly and exclusively from sickness or disease contracted and disability beginning not less than thirty (30) days after the date of this policy above stated and while this Policy is in force and for which the Insured is treated by a legally qualified physician, other than himself, hereinafter referred to as `such sickness' as specified in the following parts, respectively:
"Principal Sum One Thousand and no/100 Dollars Monthly Accident Indemnity Two Hundred and no/100 Dollars Monthly Sickness Indemnity Two Hundred and no/100 Dollars.
"And under Part IX, headed `Sickness Indemnities,' Section (c):
"One-half said monthly indemnity for the further period, if any, not exceeding two months, which immediately and continuously succeeds a period of at least one week of total disability for which indemnity is payable under the provisions of Paragraph (a) or (b) of this Part, and during which the Insured shall be so far disabled by `such sickness' that he is prevented during at least one-half of his business time from performing duty or duties substantially essential to his occupation, and during which he shall also be under the regular care of a legally qualified physician."
A rider attached to the policy further provided: "In consideration of the reduced premium at which the under-mentioned Policy is issued, it is understood and agreed that the Schedule headed `Sickness Indemnities' is hereby amended to eliminate any indemnity for the first seven (7) days of disability."
The first sentence of Section P of that part of the policy headed "Standard Provisions" reads: "A copy of application endorsed hereon is hereby made a part of this contract * * *. Compliance on the part of the Insured and beneficiary with all the provisions of this policy is a condition precedent to recovery hereunder and any failure in this respect shall forfeit to the Company all right to any indemnity."
The first paragraph of the "Copy of the Application for This Policy" (which application is made a part of the policy) reads as follows: "I hereby apply to The Commercial Casualty Insurance Company for a policy to be based upon the following representation of facts: I understand and agree that the right to recovery under any policy which may be issued upon the basis of this application shall be barred in the event that any one of the following statements, material either to the acceptance of the risk or to the hazard assumed by the Company, is false, or in the event that any one of the following statements is false and made with intent to deceive."
Section 15 of the application reads as follows: "I have not had, nor am I now suffering from tuberculosis, paralysis, rheumatism, hernia, appendicitis, nor any chronic, or periodic mental or physical ailment or disease, nor am I crippled, or maimed, nor have I any defect in hearing, vision, mind or body, except as herein stated: `No exceptions.'"
Section 16 reads: "I have not been confined to the house by sickness or accident during the last five years, nor have I consulted or been treated by a physician during that time, except as herein stated: `In September 1926 for Ulcer of Stomach lasting 3 weeks.'"
Section 17 reads: "Last physician consulted was Dr. Berger, residence 1543 East Boulevard, date May 1927, for General Examination."
Section 18 reads: "I have never undergone surgical operation except as herein stated: Date: October 1926 for Ulcer of Stomach. Result: Good. Policy applied for this 1st day of October, 1927."
Signature of applicant: "Ben Wheatman."
We are also referred to the cross-examination of Ben Wheatman by counsel for the insurance company, the substance of which is a statement by the assured that he was operated upon for ulcer of the stomach, and that he was suffering from same in 1926.
There can be no doubt that on December 3, 1926, he was operated upon by Dr. Hamann for ulcer of the stomach. Dr. Oldenburg, who was Wheatman's physician, testified to that effect. He also stated that Ben Wheatman, his patient, felt fair after the operation.
It is claimed that the indemnity of $200 per month is limited to sickness or disease contracted, and disability beginning, not less than 30 days after the date of the policy. It is pointed out that in view of the evidence, this disease resulting in disability, which was diagnosed as ulcer of the stomach, was a pre-existing disease; that the policy contemplated an obligation to indemnify the assured only for sickness or disease contracted 30 days after the date of the policy, and does not contemplate a pre-existing disease.
It appears that in his application the assured did not conceal the fact that he was operated upon for ulcer of the stomach in 1926. He apparently made a fair recovery after the operation. There was a recurrence of same on November 26, 1927.
Construing the policy most liberally, as it is the duty of the court to do, we are of the opinion that the provision referred to does not exclude a disease or sickness from which the assured had previously suffered, but from which he had apparently recovered prior to the issuance of the policy. The policy was issued with full knowledge on the part of the company that on December 3, 1926, the assured was operated upon for ulcer of the stomach. The company nevertheless accepted the premium and issued the policy, and it may be reasonably inferred that both the assured and the company believed that the assured had made a full recovery after said operation.
We find no error in the judgment of the municipal court, and the same will be affirmed.
Judgment affirmed.
VICKERY, P.J., and SULLIVAN, J., concur