Summary
In Prudential Insurance Co. of America v. Pagano, 407 Pa. 473, 181 A.2d 319 (1962), the Pennsylvania Supreme Court ruled that an insurance company had complied with Section 441 where the insured executed two "Part II's" of an application that were virtually identical and the insurance company attached only one.
Summary of this case from Horowitz v. Federal Kemper Life Assur.Opinion
May 1, 1962.
May 21, 1962.
Insurance — Life insurance — Health and accident insurance — Policy — Application as part of contract — Evidence — Questions concerning medical history — Answers — Fraudulent misrepresentations — Cancellation of policy — The Insurance Company Law of 1921.
1. In this action in equity to rescind two insurance policies in which the court below found that the insured had fraudulently answered questions in the applications for the policies relating to his prior medical history, it was Held that the objections to rulings on evidence were without merit; and the decree of rescission was affirmed. [474-6]
2. Although the words "correct copy" as used in The Insurance Company Law of 1921, P. L. 682, § 318, must be strictly construed in favor of the insured, they must also be reasonably interpreted. [475]
Mr. Justice COHEN dissented.
Before MUSMANNO, JONES, COHEN, EAGEN and O'BRIEN, JJ.
Appeal, No. 255, Jan. T., 1962, from decree of Court of Common Pleas No. 5 of Philadelphia County, Dec. T., 1959, No. 3588, in case of The Prudential Insurance Company of America v. Michael O. Pagano, Jr. Decree affirmed.
Equity.
Adjudication filed finding for plaintiff, exceptions dismissed and decree entered, opinion by ALESSANDRONI, P. J. Defendant appealed.
Irwin Paul, for appellant.
George M. Brodhead, with him Peter C. Paul, J. Welles Henderson, and Rawle Henderson, for appellee.
This is an action to rescind two insurance policies (one life and the other health and accident) on the basis that the insured made fraudulent representations regarding his health. The court below found that misrepresentations were made and ordered rescission. The defendant appealed. In doing so he raises several issues, one of which has to do with the Act of May 17, 1921, P. L. 682, § 318, 40 P. S. § 441, which requires that a correct copy of the application as signed by the applicant be attached to the policy of insurance, and that "unless so attached and accompanying the policy, no such application . . . shall be received in evidence in any controversy between the parties to . . . the policy, nor shall such application . . . be considered a part of the policy or contract between such parties."
In the application for the policies issued April 14, 1958 and April 28, 1958, defendant answered "no" to several questions relating to hospitalizations, x-rays, electrocardiograms, heart trouble, etc. As a matter of fact, defendant had been hospitalized in September, 1957, only a few months prior to his making said answers, and his condition was then diagnosed as rheumatic heart disease and mitral valvular stenosis. On that occasion he also had x-rays, electrocardiograms and other laboratory tests. The chancellor found that defendant had been told by his physician of the heart condition and that he had falsely made the answers in the application.
The defendant argues that the plaintiff violated this statutory provision because, whereas he had executed two Part II's (one on February 12, 1958, and the other on April 16, 1958) of the application for his health and accident policy, the insurance company attached only one. The plaintiff attached to the policy the Part II which had been executed on February 12th. The defendant maintains that the policy thus did not contain the entire application and therefore should not have been admitted in evidence. However, it is unquestioned that the Part II executed on April 16th was, for all practical purposes, an identical copy of the one executed on February 12th, so that the purport of the statute was not violated. In Ross v. Metropolitan Life Ins. Co., 403 Pa. 135, this Court said that though the statute is to be strictly construed in favor of the insured, it "must nevertheless be reasonably interpreted."
The defendant next argues that the policies (with the applications) should not have been received in evidence before the defendant had the opportunity to prove that the applications had been executed after the questions therein contained had been answered by the insured. However, in his answer the defendant admitted the correctness of the policies and his executions of the applications. These admissions were placed in evidence.
The defendant complains of several trial errors. He says that the chancellor erred in not allowing the defendant to cross-examine the examining doctor, Dr. Sheetz, with regard to the extent of the physical examination conducted by him. Dr. Sheetz's testimony was introduced for but one purpose and that was to prove that the defendant had answered each and every question on Part II of the application for the life insurance policy. Such cross-examination could not be justified on the basis that it was relevant to proving reliance on the medical examiner's report since such evidence could not have relieved the defendant from the consequences of his own fraudulent misrepresentations. Even where there is a sound-health clause in the policy and the insurer makes an examination of the insured, the insurer is not estopped to repudiate liability because of defective status of the health of the insured at the time where there have been "misrepresentations or fraudulent statements on his part". ( Prudential Ins. Co. v. Kudoba, 323 Pa. 30, 35.)
Nor do we see any reversible error in the withdrawal from evidence, after having been identified, of the Part II executed April 15, 1958. The defendant contends that this exhibit had been used to lay the basis and foundation for the testimony of Dr. Donauer, plaintiff's evaluation doctor, and hence it should not have been withdrawn while allowing the doctor's testimony with regard to it, to remain. The record, however, shows that Dr. Donauer's testimony had to do with regard to the Part II executed February 12, 1958, which was properly in evidence, as heretofore discussed.
The record substantiates the chancellor's finding that the defendant did make material fraudulent material misrepresentations with regard to his medical history and condition of health and that the plaintiff company was entitled to a rescission of the policies for that reason. We find no trial errors requiring a re-trial of the cause.
Decree affirmed; each party to bear own costs.
Mr. Justice COHEN dissents.