August 25, 1919.
Before MAULDIN, J., Spartanburg. Affirmed.
Action by Annie L. Wingo against the New York Life Insurance Company, and by Augustus L. Maxwell against the same defendant. The two cases were tried together by consent of counsel and resulted in verdict and judgment for plaintiffs, and the insurance company appeals.
Defendant's exceptions are as follows:
1. In that the presiding Judge erred in refusing the defendant's motion for a directed verdict in its favor on the fifth ground set forth in said motion as follows: "In that the testimony is susceptible of only one inference, to wit: that William Dean Wingo, the deceased, falsely stated and represented in his medical examination that he had never had a disease of the lungs prior to the date of his medical examination, and the question referring explicitly to his past health, the decision of the Supreme Court of this State in the case of Gamble v. Insurance Co., 95 S.C. ( 196 S.E., 875), and other similar cases, does not apply, and the Court should direct a verdict for the defendant herein. It being shown by the uncontradicted testimony that the defendant acted and relied on the statements so made and would not have issued the policies in evidence if it had known that Wingo had suffered with a disease of the lungs prior to the date of his medical examination, or had been told by three physicians that he had a disease of the lungs" — the error being that the uncontradicted evidence in the case showed that Wingo had prior to the date of his medical examination been informed by three doctors that he had a disease of the lungs, and admitted to witnesses that he had a disease of the lungs; that he had been treated by these doctors for that disease, and, having falsely answered the questions asked, under the issues raised in this case the Court should have directed a verdict for the defendant.
2. In that the Court should have directed a verdict for the defendant in these cases on a fourth ground set forth in a motion for a directed verdict as follows: "That the only inference that can be drawn from the testimony in this case is that the applicant, Wingo, intended to defraud the company in that the testimony shows that he applied for the insurance on November 25, 1913; that on November 28, 1913, three days later, he went to the witness, Dr. Gibson, and asked him to go over his lungs. The doctor told Wingo in his opinion he had tuberculosis of the lungs, and about two weeks later, on December 17, 1913, he gave to the medical examiner a false answer, to the question, `Have you ever had or suffered from a disease of the lungs?' This shows conclusively an intent to defraud, and Wingo should not be allowed to profit by it. The defense set up by the defendant should be sustained by the Court, and a verdict directed in favor of the defendant" — the error being that the testimony in this case shows a conscious failure on the part of the insured, Wingo, to disclose the truth in answer to the questions asked as to his past health, to wit, question 9 in the application, and under the uncontradicted evidence in the case false statements material to the risk were proved by the defendant, and a verdict should have been directed in its favor.
3. In that the presiding Judge erred in refusing to direct a verdict for the defendant on the first, second and third grounds as set forth in the motion for a directed verdict, in that the testimony in the case was uncontradicted and susceptible of only one inference, and was such testimony that no reasonable jury could have found otherwise than that the deceased, William D. Wingo, made false statements and representations material to the risk, to wit, that he had never had nor suffered from any disease of the lungs nor consulted a physician for such disease within five years prior to the date of his medical examination; the uncontradicted testimony being that the deceased had consulted three doctors, to wit, Nelson, Black and Gibson, prior to the date of his medical examination for a disease of the lungs; that these doctors told Wingo he had such a disease and treated him for it; that Wingo admitted to other witnesses that he had the disease, and the presiding Judge was in error in not directing a verdict for the defendant on these grounds, the testimony showing, that the defendant would not have issued the policies if it had known the truth regarding such statements and representations.
4. In that the presiding Judge was in error in admitting over defendant's objection the testimony of all of the witnesses for the plaintiff and the defendant with two exceptions, the questions and answers as to the character and reputation of the deceased, Wingo. The error being that there was no issue involving the character of the insured, Wingo, and no matter how serious a moral delinquency may be involved in a fact and how much the establishment of that fact may have affected Wingo's reputation, he could not invoke the aid of his previous reputation to disprove the fact in issue, and the Court was in error in admitting such testimony, as it grievously affected the rights of the defendant in the trial of this case, and prejudiced the defendant's case before the jury.
5. In that the presiding Judge erred in charging plaintiff's third and fifth requests to charge, as follows: "(3) I charge you that the fact that the company doctor examined and passed the applicant, in view of the questions asked him in the application, was some evidence under all the circumstances in this case that he had never suffered from a disease of the lungs `or any other serious disease.'" That is correct, and I make this addition to it: "It is some evidence, and you are to take that into consideration in passing upon the issue which you are to decide. By some evidence I mean to differentiate in this: It is evidence for you; it is not conclusive of the fact; it is evidence for you to take into consideration." "(5) I charge you that an examination of the deceased by a physician chosen by the insurance company is some evidence of one of two things, either that the disease did not exist, or that its existence was known and waived by the insurance company. If you find from the facts in this case that the disease did not exist or that its existence was known to the physician, or by reasonable examination on his part could have been known, he will be held in law to have known of the disease, and the company will be deemed to have waived it, and your verdict should be for the plaintiff." And I add here: "But if the physician did make a reasonable examination and failed to discover such disease, and such failure was due to the fraud of the applicant, as I have defined fraud to you, then the plaintiff could not recover. Now, right here I want to tell you that waiver in law is simply the voluntary relinquishment of a known right. If one has a right, knowing it, and voluntarily relinquishes it, fails or refuses to insist upon it, he is deemed in law to have waived that right, and, therefore, if he leaves by that waiver some other person to act, he could not, of course, later, after another has acted, rely upon any such right, if so waived" — the error being that in charging these requests the Court violated the provisions of the Constitution of 1895, and charged the jury upon the facts of the case, the Judge stating to the jury what the evidence was, and that the jury should consider the examination of the company's medical examiner as evidence of a fact in the case, which, we submit, was error in violation of the Constitution, as stated.
6. In that the presiding Judge erred in charging plaintiff's seventeenth request to charge, as follows: "(17) I charge you that the insurance company could waive the fact that the applicant for insurance had suffered from a disease of the lungs or any other statement required by it to be made in the application and examination papers. I further charge you that an examination of the deceased by a physician chosen by the insurer is some evidence either that the disease did not exist or that its existence was known and waived by the insurer, and if you believe the evidence to be true, your verdict should be for the plaintiff. Waiver is the relinquishment of a known right, and if you find that the insurance company, by the act of its agent, the medical examiner, waived the right to refuse an insurance policy by reason of the fact that the applicant had suffered from lung trouble, then your verdict should be for the plaintiff provided that was the only reason for refusal for an insurance policy" — the error being that in charging these requests the Court violated the provisions of the Constitution of 1895, and charged the jury upon the facts of the case, the Judge stating to the jury what the evidence was and that the jury should consider the examination of the company's medical examiner as evidence of a fact in the case, which, we submit, was error and in violation of the Constitution as stated.
7. In that his Honor the presiding Judge erred in charging the plaintiff's third, fifth, and seventeenth requests set forth above and also plaintiff's thirteenth and fourteenth requests to charge as follows: "(13) I charge you that the knowledge and also the errors and the negligence of the examining physician of the insurance company are those of the company itself, which it is estopped to take advantage of, unless, gentlemen of the jury, as I have already stated, that knowledge was perverted through the fraud of the assured, unless fraud was practiced to bring about a condition such as is requested in that request to charge on the part of the medical examiner. (14) I charge you that an insurance company cannot take the money of an insured while he lived and when he was dead claim a forfeiture on account of what it knew at the time it made the contract of insurance, or should have known by reasonable examination of its physician, for that would be fraud" — in that said requests improperly defined the law of waiver, charging the jury that a lack of knowledge or its equivalent, negligence and carelessness, on the part of an examining physician for an insurance company, which presupposes that such physician had no knowledge of a given fact, could amount to a waiver on the part of the insurance company; the error being that waiver and estoppel involved the relinquishment of a known right, while the charge as given made the defendant liable for a matter of which it had no knowledge.
8. In that his Honor the presiding Judge was in error in charging the plaintiff's eighth request to charge, as follows: "I charge you that, should you find that a statement made by the deceased in an application for a policy was false, yet that raises no presumption that it was made with intent to deceive; it is the duty of the defendant to allege fraud to prove it by a preponderance of the testimony, and he must go further and prove that such statements were made with intent to deceive knowing at the time the statements to be false." I charge you that. And charge you here also in this connection that the evidence to establish fraud must be clear and convincing and satisfactory, and such as to lead you, as I have stated before, to come to the conclusion that the greater weight of that evidence is in favor of the proposition of fraud — the error being that the defendant was only bound in law to prove the allegations of its answer by the greater weight of the evidence, whereas the Court charged the jury that evidence "to prove fraud must be clear and convincing and satisfactory," that such rule was improper, and not in accord with the rule laid down in the law of this State, and prejudiced the defense in its case before the jury.
Messrs. Thomas Lumpkin and James H. McIntosh for appellant.
Messrs. Nicholls Nicholls and John Gary Evans for respondents.
August 25, 1919. The opinion of the Court was delivered by
This cause has been tried four times on circuit and has been hither once before. 112 S.C. 139, 99 S.E., 436. Let the eight exceptions be reported.
The major issue made by the appellant's argument is that the trial Court ought to have directed a verdict for the defendant, upon the ground that the applicant had secured the policies of insurance to be issued to him by his untrue and fraudulent answers to the medical examiner. The first three exceptions are directed to this issue. Upon the face of it the issue is a serious one.
The particular answer challenged is that to question 9 in the application, though counsel did animadvert on the answer to question 10, "in order to fortify the contention that the applicant had dealt unfairly with the company." Question 10, answered in the negative, is:
"Have you consulted any physician for any ailment or illness not mentioned above?"
The ailment mentioned above was that of the heart and lungs. There is no testimony that the decedent ever consulted a doctor about any ailment save disease of the lungs. That question and answer therefore fall out of the case.
Reverting to question 9, it reads:
"(9) Have you ever had or suffered from any of the following diseases (if you have so suffered within five years, name and address of physician consulted):
"B. Of the heart nor lungs? Answer: No."
The argument of the defendant is: (1) That the answer was untrue; and (2) that the answer was made with intent to deceive and defraud the insurance company. The defendant must establish both of these postulates to defeat the contract. The question is unhappily phrased and its meaning, if not ambiguous, is at least not readily apparent. The four words italicized have been supplied, to bring out the sense of the question.
The primary answer sought by the question was: Had the applicant suffered within five years a disease of the lungs? The secondary answer was, if he had so suffered, then give the name and address of the physician consulted. The answer which the applicant made is plainly referable to the primary question: It is simply "No."
The applicant was not asked if he had consulted a physician about a disease of the lungs, but only if having suffered such a disease within five years next before, had he consulted a physician about it. The answer was that he had not suffered from a disease of the lungs. The primary question was directed to the applicant's knowledge of his physical condition for the five years before, not to a doctor's opinion thereabout.
Some men are not so ready to believe what a doctor tells them. Dr. Bunch testified so much. It is true that Dr. Nelson testified he told applicant in 1909 that he had a disease of the lungs, and another doctor told the applicant in 1913 he was afraid he had tuberculosis. Dr. Black testified he, perhaps wisely, did not inform the applicant of his malady. But the applicant's answer did not gainsay that declaration of Dr. Nelson. So much was not asked him, though it might have been. The question was in effect did he believe that he suffered from a disease of the lungs, and to that question he answered "No." There is no testimony that the applicant ever declared to anybody that he had tuberculosis.
A Court, on a motion for nonsuit, is not warranted to say that an applicant was bound at his peril to believe in a diagnosis of his ailment. Indeed, it is possible that doctors have more than once declared to a patient that he had disease of the lungs when the fact turned out to be the contrary.
When a contract has been executed, and to be performed after the death of one of the makers of it, and when that maker of it is dead, the contract ought not to be annulled by the other maker, except upon a breach of the letter of the agreement. The only testimony that the applicant was directly informed that he had tuberculosis is that of Dr. Nelson, and that circumstance took place four years before the application was made. On the other hand, Dr. Bunch was the medical examiner for the company and he testified directly that the applicant was sound in body. The application blank does not show that Dr. Bunch asked the applicant whether he had consulted Drs. Nelson, Black and Gibson about his lungs; he asked the applicant whether he ever had or suffered from disease of the lungs.
If Dr. Bunch thought the applicant was free from disease of the lungs, there was every reason why the applicant should have been of the same mind, and there is no suggestion that Dr. Bunch's opinion was fabricated. The same witness and the other doctors testified that tuberculosis bacilli inhabit the body of well-night all men, and it was only when they get the ascendancy that the subject is pronounced tuberculous. And Dr. Bunch testified further that the disease sometimes galloped to death within a year of its appearance. And again, the company's soliciting agent testified that he had written policies on the applicant in other companies, that the applicant had all the appearances of a normal man, and that the agent sought and solicited the applicant, and that the applicant did not seek the agent. Under all the testimony the Court was wise to leave the jury to find if the decedent knew he had tuberculosis when he made answer to question 9.
But assuming that question 9 reasonably suggested to the applicant his duty to answer if he had afore time consulted a physician thereabout, and that the answer "No" was a response to that question, yet such an answer is only fatal when it is prompted by the intent to deceive. That inquiry involves a secret operation of the mind, and the circumstances before recited do not leave the issue from reasonable doubt.
In this connection the eighth exception is relevant. Nobody will deny that in a Court of equity the rule prevails that fraud must be proved by clear and convincing testimony, and that because it involves the wicked intent. The same rule operates in a Court of law; both Courts have jurisdiction to try issues of fraud; and there is no reason to apply a different rule in the two Courts. The Circuit Court did not instruct the jury that the preponderance of evidence in favor of the defendant should be clear and convincing, for that is not correct; the instruction was that the substantive matter to prove fraud, the evidence, should be clear and convincing.
The fourth exception, by the words of it, admits that two witnesses testified without objection to the good character of the decedent. It is therefore not worth while to inquire if the others who swore on that subject under objection testified against the law. Moreover, the postulate announced in Smets v. Plunket, 1 Strob., 372, relied upon by the appellant, has been modified by subsequent decisions of this Court. See Dawkins v. Gault, 5 Rich., 153; Werts v. Spearman, 22 S.C. 219.
The vice expressly suggested in fifth and sixth exceptions is that the Court "charged the jury upon the facts." The exceptions are without merit. All the Court told the jury in that connection was that Dr. Bunch's testimony was some evidence of a fact in issue. That was but saying that the testimony tended to prove the fact. When relevant and competent testimony — and this was both — is introduced, the inference of law is that it tends to prove the fact to which it is directed. See Gamble v. Insurance Co., 95 S.C. 199, 78 S.E., 875.
The seventh and last exception to be considered "alleges error in charging the law of waiver" as the law upon that subject was stated in the third, fifth, seventeenth, thirteenth and fourteenth of the plaintiff's requests, and which requests were all allowed.
The force of the appellant's brief is directed to the plaintiff's thirteenth and fourteenth allowed requests. The fourteenth request was taken bodily from the opinion in Insurance Co. v. Arnold, 97 S.C. 421, 81 S.E., 964, Ann. Cas., 1916-C, 706. The appellant's counsel has not indicated in the argument wherein that postulate is untrue.
Commencing in the brief on the thirteenth request, the appellant's counsel says:
"The error is that the Court improperly defined the law of waiver, charging the jury that a lack of knowledge or its equivalent, negligence and carelessness, on the part of an examining physician for an insurance company, could amount to a waiver."
The Court was not stating the law of waiver, but was expressly stating the law of estoppel. The two subject are not synonymous, although akin.
The argument does not deny, apart from any untrue or fraudulent answer made by the applicant, that if a medical examiner shall pass an applicant, knowing of defects in his body, then the company may not thereafter contend that the subject was unsound. It matters nothing whether this conclusion is founded upon that which the books call estoppel or waiver, or what not; those are only words.
If the above-stated postulate be true, then it is immaterial whether the action of the doctor be prompted by inefficiency or by carelessness; the result is the same; the company set him to judge of the applicant's fitness, and the company is bound by his judgment. The thirteenth request amounted to so much.
As before stated, this leaves out of the question this applicant's answer. The Court had charged the jury the effect of them.
The judgment is affirmed.
MR. CHIEF JUSTICE GARY and MESSRS. JUSTICES HYDRICK, WATTS and FRASER concur.
We have considered the petition for a rehearing and it is refused. The only matter in the petition which needs to be referred to is what we said about the fourth exception. That exception is that the Court erred —
"In admitting over defendants' objection the testimony of all the witnesses for the plaintiff and the defendant with two exceptions: the questions and answers as to the character and reputation of the deceased."
We inferred from that language that two witnesses had testified without objection. But we are satisfied from all the recitals of the petition that so much was not intended to be expressed, and that, on the contrary, the defendant objected to all the testimony which was directed to prove the good character of the deceased.
We nevertheless think that, under our own cases cited in the opinion, the testimony was competent. The order staying the remittitur is revoked.