Opinion
No. 21480.
June 4, 1951.
APPEAL FROM THE CIRCUIT COURT, JACKSON COUNTY, PAUL A. BUZZARD, J.
John C. Nipp, Clarence C. Chilcott, Kansas City, for appellant.
Ray B. Lucas, Jos. R. Stewart, Kansas City, for respondent.
This is an action to recover on a policy of life insurance issued by respondent in the amount of $2500 on the life of Edward J. Cheatham, wherein appellant was named as beneficiary. The policy was issued September 3, 1946, upon an application in two parts, signed by Edward J. Cheatham August 24, 1946. Insured died January 22, 1948, of heart disease. The petition alleges generally the issuance of the policy, the status of appellant as beneficiary, payment of the premiums, death of the insured within the terms of the policy, the furnishing of proof of death, and demand for payment.
Respondent's answer admitted generally the allegations of the petition, but alleged that the policy was null and void ab initio because of certain matters hereinafter mentioned. It further alleged as an affirmative defense that the said Edward J. Cheatham, in answer to appropriate questions in his application, had stated that he was in good health; that he was not suffering from any impairment of health; that he had never been under observation, care or treatment in any hospital, sanitarium, asylum or similar institution; and that he had not consulted or been treated by a physician, healer or medical practitioner during the past 10 years; that said answers, statements and declarations of the said Edward J. Cheatham were false, incomplete and untrue in that prior to and at or about the date of his application he had consulted and had been, and was being, treated by physicians for a serious heart condition or heart disease with which he was afflicted at the time of his application and prior thereto; that it would not have approved the application nor issued nor delivered the policy had it known the true condition of the applicant's health and that his answers and statements were untrue; that said answers, statements and declarations so made by the said Cheatham were material, and the matters or things so concealed or misrepresented in his application caused or contributed to his death. The answer then pleaded generally the good health provision of the application and of the policy, providing among other things that there should be no liability and the policy should not take effect unless the applicant was in good health at the time of the delivery of the policy to him; alleged that the said Cheatham was not in good health as required by the terms and conditions of the application and the policy, but was then suffering from a serious heart disease which caused or contributed to his death, and because of which the policy did not take effect and was null and void. The answer alleged the tender of all premiums paid on the policy, with interest, the refusal of such tender by the appellant, and the deposit of said premium and interest in court for the use of the appellant.
Appellant's reply admits the tender of the premium and interest, and its refusal by her. Concerning the alleged false statements contained in the application, appellant states that she "admits that said application contains the questions and answers therein alleged, but denies that applicant made said answers, or any part thereof at the time of the signing of said application or at any other time, but that he, the said Edward J. Cheatham, divulged and gave to, and completely informed the soliciting agent of defendant of his then and past condition and history of his health, but that said soliciting agent erroneously without the knowledge and consent of said Edward J. Cheatham and of this plaintiff, intentionally inserted the erroneous and untrue answers in said application contained * * * and admits that thereafter said application of Edward J. Cheatham, duly signed by him, which included all of the answers, statements, representations and declarations, was transmitted to the Home Office of defendant * * *, but denies that the defendant had no knowledge of the falsity or untruth of any such answers, statements, representations and declarations, and denies that at all times until its investigation following the receipt of notice of proof of death furnished by plaintiff, believed them to be true and denies that defendant relied on each of them and denies that defendant was deceived thereby, and denies defendant was moved and induced by each of them to approve said application and denies that in reliance thereon defendant issued and delivered to said Edward J. Cheatham the policy of insurance sued on, but alleges defendant had full and complete knowledge and information as to the truth of all of said matters and things in said answer alleged. * * * alleges the said Edward J. Cheatham truthfully and completely, prior to and at the date of his said application divulged and informed the soliciting agent of defendant that he had consulted and had been, and was, being treated by physicians for a serious heart condition or heart disease with which he was afflicted at the time of his said application and prior thereto and that defendant's soliciting agent intentionally inserted untrue answers in said application. * * * that defendant with full knowledge and information by reason of the truthful, full and complete knowledge and information given by the said applicant prior to and at the time said application was made and signed by the applicant, to the soliciting agent of defendant, the defendant was fully and completely informed and issued and delivered said insurance policy to said Edward J. Cheatham with full knowledge that said applicant had consulted and had been, and was being, treated by physicians for a serious heart condition or heart disease with which he was afflicted at the time of his said application and prior thereto. And plaintiff admits that said heart condition was material and caused or contributed to the death of insured, * * * plaintiff admits said application contained the quotations set forth therein, but alleges that the applicant was not asked to read, nor did he read, nor was the same read to him, before the signing of the application which was prepared by the soliciting agent of the defendant, nor was he given an opportunity to read the same and denies he knew or had knowledge of the falsity of the statements therein; that by reason of the knowledge of plaintiff's condition as alleged in this reply prior to and at the time said application was signed and said policy was issued defendant thereby waived the provisions of said application and of policy as quoted by defendant in paragraph 12 of its answer filed herein." (Italics ours.)
In his opening statement to the jury appellant's counsel briefly outlined the facts leading up to the application for the insurance policy to the effect that Mr. and Mrs. Cheatham had given a mortgage on their home, and thereafter received a postcard from the defendant informing them that they should have a life insurance policy for the protection of this mortgage, and he then stated: " * * * Mr. Cheatham knew when he received this postcard that he had heart trouble and he knew he could not get ordinary insurance, ordinary life insurance, because of his physical condition, but he had never heard of this kind of insurance before and he thought maybe he could get this kind of insurance and he answered that card and told them he was interested in that insurance. * * * In answer to that card a Mr. McFerrin, an agent of the Kansas City Life Insurance Company called upon Mr. Cheatham * * *, and presented this card which Mr. Cheatham had returned stating that they were interested in that kind of insurance and Mr. Cheatham then proceeds to tell, him why he sent in that card; that he had heart trouble and could not get ordinary life insurance, and he was informed by Mr. McFerrin that inasmuch as it was only for $2500 and he was less than 45 years and six months of age he would not be required to undergo a physical examination and if he lived two years the policy would be uncontestable anyway, and `you are a strong healthy man' he said, and `no reason why you cannot live longer than that,' and Mr. McFerrin then proceeded to fill out that application. There are a number of questions on that application that were all answered in Mr. McFerrin's handwriting. He said `no' to everything which might have caused this man to be denied insurance and then he he passed it to Mr. Cheatham for his signature and Mr. Cheatham signed it without reading it over and handed it back to Mr. McFerrin, * * *. Now the evidence in this case will show that a policy was issued on this application * * * insuring the life of Mr. Cheatham * * * it is what is known as a five year term policy. * * * Mr. Cheatham died on the 22nd day of February, 1948. And thereafter some representative of the insurance company came to Mrs. Cheatham's residence and presented her with the forms to make proof of death and she did make proof of death * * * thereafter the company denied liability and refused to pay the policy which has resulted in this law suit. * * * We think under the evidence * * * you will conclude that this company knew all the time that this man had heart trouble when they issued that policy and accepted the application." (Italics ours)
Appellant introduced in evidence the original policy containing photostatic copy of Parts One and Two of the application; the policy providing in part as follows:
"1st When Effective. Unless the first premium has already been paid in cash, this Policy shall not take effect until the first premium hereon has been paid and this Policy delivered to the Applicant within thirty days from the date hereof, and unless the Applicant is in good health at the time of its delivery.
* * * * * *
"This Policy is Issued in Consideration of the stipulations, agreements and representations made in the application for this Policy, a copy of which application is hereto attached and made a part hereof, and said Policy and application constitute the entire contract between the parties hereto, and in further consideration of the payment of the first premium of Seventeen Dollars and Seventy-Five Cents, which is the premium for insurance hereunder ending at noon on the Third day of March 1947. * * *"
In Part Two of the application appears the following questions and answers:
"15. Are you suffering from any impairment of health? (If so, give particulars.) No.
"16. Have you ever been under observation, care or treatment in any hospital, sanitarium, asylum, or similar institution? No."
"19. Describe below all causes for which you have consulted or been treated by a physician, healer or medical practitioner during the past ten years. None."
Part One of the application shows on its face that the first premium had not been paid, and in which, among other things, the following question and answer appear:
"11. Are you now in good health? Yes."
The following provision also appears: "If this application is not accompanied by the first premium in full in cash it is agreed that the Company assumes no liability whatever until a policy of insurance is actually delivered to me during my lifetime and while I am in good health, and any money, check, note, obligation or other thing of value, given to the Company or its agent, on account of the first premium on the policy applied for shall be held by the Company merely as a deposit and not as payment until such time as the policy of insurance is issued and delivered to me during my lifetime and while I am in good health, after which the same shall be applied on such first premium charge; otherwise said deposit shall be returned to me or my heirs, executors or administrator."
Appellant thereupon rested her case. Respondent, offering no evidence, also rested its case. Respondent's motion for directed verdict was overruled and the case was submitted to the jury and argued. The jury returned a verdict for the defendant (respondent) and plaintiff (appellant) perfected her appeal.
Appellant contends that the court erred in overruling her motion for new trial because "the court should have granted her a new trial in view of the fact that she was entitled to a peremptory instruction after defendant rested." This contention is founded on the premise that plaintiff's evidence, together with certain admissions in defendant's answer, made a prima facie case, and defendant had introduced no evidence in conflict with or denying such prima facie case. However, respondent maintains that appellant's reply and her counsel's opening statement were effective admissions of respondent's affirmative defense, thereby destroying appellant's prima facie case and relieving respondent of the necessity of producing evidence in support of its pleaded defense.
Appellant cites that line of cases which hold that the introduction of the policy and the application in evidence, coupled with certain admissions in the answer, make a prima facie case. We have no quarrel with such cases, but they do not involve the question of the effect of admissions made and issues pleaded in plaintiff's reply. That is the vital question in the instant case.
We have set out a length the pleadings, but, briefly stated, the situation is this: Appellant sued on a policy of life insurance containing a good health clause; respondent, by answer, admits the elements necessary to appellant's prima facie case, but pleads avoidance of the policy for violation of the good health clause and because of misrepresentations and concealments in the application of the existing heart disease, for which the insured was then being, and had been, treated by physicians and from which he later died; appellant, by her reply, (and in her counsel's opening statement) admits the insured's heart disease, admits the consultation with and treatment by physicians for such heart disease at the very time the application was signed and the policy delivered, and admits that said heart disease "was material and caused or contributed to the death of insured", but in avoidance of these admissions appellant pleaded the affirmative issue that respondent's agent was fully informed of the insured's heart disease and of his treatment by physicians therefor, and, without authority of the insured, wrote the untrue and incorrect answers concerning the same in the application, and because thereof the respondent had constructive knowledge of such acts and thereby waived the provisions of the application and policy relating to defendant's state of health and was estopped to assert the same as a defense.
As stated above, appellant introduced the policy containing the good health provision and the application signed by the insured containing the untrue and incorrect answers concerning the condition of his health, but offered no evidence to sustain her affirmative issue of waiver and estoppel on the part of respondent because of its alleged constructive knowledge of the facts. Was that failure fatal to her case? We think so.
The gist of appellant's argument is that her reply and the statement of her counsel do not make admissions of facts establishing respondent's affirmative defense raised in its answer resulting in shifting the burden of proof to the appellant. She cites a number of cases holding to the effect that a pleading must be construed as a whole and force and effect given to all its provisions; that a court cannot give effect to part of a pleading favorable to one party and disregard the part that is unfavorable to such party. There is no question about that being the general rule. It is also true that "* * * a party is not to be concluded by statements in the opening statement of his counsel unless the same are clear upon the fact or facts to which they relate; and a mere statement or outline of anticipated proof upon any one or more of the issues in the case is not to be regarded as a binding admission so as either to conclude the party whose counsel made the statement or to dispense with the necessity of proof upon the issue on the part of his adversary." Evans v. Sears, Roebuck Co., Mo.App., 129 S.W.2d 53, 57.
But keeping these well recognized principles in mind, we think an examination of the reply clearly, specifically, and without qualification, admits that the insured had heart disease and had been treated therefor by physicians at the time and immediately before he made application for the insurance policy; and admits that "said heart condition was material and caused or contributed to the death of insured." The opening statement of counsel for appellant reaffirmed such admissions. Under such circumstances, the only controverted issue remaining in the case was whether insured had informed respondent's agent of the condition of his health at the time of making the application, and, without insured's authority, the agent inserted untrue answers in the application, and that defendant had constructive knowledge of insured's state of health and thereby waived the provisions of the application and of the policy and is estopped from relying upon such misrepresentations and the bad health of the insured. The burden of proving facts which would establish a waiver and estoppel was upon the appellant. This rule is well stated in Park v. Fidelity Casualty Co., Mo.App., 279 S.W. 246, where plaintiff had set up waiver and estoppel of the provisions of a fire policy by way of confession and avoidance in her reply. In discussing the burden of proof, then upon her, the court said 279 S.W. at page 249: "In determining this question, we are mindful of the rule that, when plaintiff set up waiver and estoppel by way of confession and avoidance in her reply, the burden of proof to establish such issues was upon her, and, in the absence of such proof, a demurrer to the evidence should have been sustained." That rule has been consistently followed by the courts of this state. See Linville v. Ripley, 347 Mo. 95, 146 S.W.2d 581; Rhodus v. Geatley, 347 Mo. 397, 147 S.W.2d 631; Andrews v. Washington Nat. Ins. Co., Mo.App., 93 S.W.2d 1045. See also, 20 Am.Jur., Sec. 142, p. 149.
In Turner v. Central Mut. Ins. Ass'n 238 Mo.App. 425, 183 S.W.2d 347, at page 348, this court was discussing a case involving admissions in the proofs of death, and said "* * * It is well settled that when proofs of death admit facts supporting such a defense (misrepresentation of age), the burden is upon the plaintiff to introduce evidence, explaining or contradicting such proofs and, unless plaintiff introduces such evidence, defendant is entitled to a verdict." The same rule holds true even where plaintiff has made a prima facie case. If plaintiff admits the very facts defendant is required to prove, then she has the burden of going forward with or producing evidence in explanation, contradiction or avoidance of such admissions; otherwise defendant is entitled to a verdict. Castens v. Supreme Lodge Knights and Ladies of Honor, 190 Mo.App. 57, 175 S.W. 264, 266; Mudd v. John Hancock Mut. Life Ins. Co., Mo.App., 39 S.W.2d 450, 451; Smiley v. John Hancock Mut. Life Ins. Co., Mo.App., 52 S.W.2d 12, 14, 15. In the last cited case the court further pointed out that no evidence was necessary to prove that defendant would not have issued and delivered the policy if it had known the true condition of the insured's health, saying 52 S.W.2d at page 18: "Likewise plaintiff argues that defendant failed to prove that it would not have issued and delivered the policy if it had known the real situation, and that consequently no issue concerning the health of the insured is involved. Defendant did include such an averment in its answer, as it was essential for it to do; but the fact so pleaded was not required to be shown by direct proof, other than by the provisions of the policy itself which made the same of no effect for the nonfulfillment thereof. Simpson v. Metropolitan Life Insurance Co. (Mo.App.) 282 S.W. 454. And such provisions are not void as repugnant to the statute, but have been upheld in a long line of cases, upon some of which plaintiff herself relies in her brief."
In her brief appellant states that "if the facts set forth in plaintiff's reply are true, then she has a cause of action regardless of whether or not the answers in the application were untrue, * * *." That might be correct, but, if so, the burden of proving the allegations of her reply was on plaintiff and she failed to meet that burden; in fact, she offered no evidence in support thereof. The mere fact that the admissions are coupled with matters pleaded in avoidance of such admissions does not detract from the effect of the allegations as admissions but rather emphasizes such an intended effect.
In the very recent case of Hogsett v. Smith, Mo.App., 229 S.W.2d 20, at page 21, we had occasion to discuss the effect of admissions in pleadings or by counsel in open court, and said: "Where, however, the opponent, that is the party not having the burden of proof, admits either in his pleadings or by counsel in open court facts upon which the claim of the proponent rests, the judicial admission not only relieves the proponent from adducing evidence to prove such facts, but bars the opponent himself from disputing them. * * Furthermore, such an admission allows the court to direct the jury to take the admitted facts as positively settled, and the proponent is entitled to have the jury so instructed." (Citing cases.)
We will not lengthen the opinion by distinguishing the authorities cited by appellant in support of her contention that her reply did not admit certain vital facts, but that the statements in the reply should be considered merely quasi admissions. A reading of those cases will clearly distinguish them from the admissions made in the instant reply. Such cases are: Maltz v. Jackoway-Katz Cap Co., 336 Mo. 1000, 82 S.W.2d 909; Stock v. Schloman, 226 Mo.App. 234, 42 S.W.2d 61; Scrivner v. Missouri Pac. R. Co., 260 Mo. 421, 169 S.W. 83; Menefee v. Scally, Mo.App., 247 S.W. 259; Deierling v. Wabash R. Co., 163 Mo.App. 292, 146 S.W. 814.
It is our conclusion that plaintiff's reply clearly and specifically admitted the essential facts of complete defense pleaded in defendant's answer which relieved the defendant of the burden of introducing evidence to prove such facts; that plaintiff did not introduce evidence supporting the allegations in the reply of waiver and estoppel; and that under such circumstances the court should have directed a verdict for the defendant.
Since the jury returned a verdict for defendant, the judgment is for the right party and should be affirmed. It is so ordered.
All concur.