Opinion
No. 31136.
April 9, 1934.
INSURANCE.
Where agent of insurer required to make written application and undergo physical examination to obtain employment took out disability insurance with insurer on basis of application, application was in legal effect "application for insurance," and hence failure of insurer to deliver copy of application to agent with policy precluded insurer from showing in suit on policy that agent's disability was caused by disease contracted before policy was issued (Code 1930, section 5174).
APPEAL from Circuit Court of Sunflower County.
Cooper Thomas, of Indianola, and Ben Wilkes, of Greenville, for appellant.
The policy of insurance provided that it only covered disabilities resulting from either bodily sickness contracted while the policy is in force, or from bodily injury effected accidentally and sustained while the policy is in force.
The insurance company pleaded and, of course, placed in issue that the disability arose from bodily sickness or bodily injury contracted or sustained before the policy was in force. The court declined to admit any testimony in support of this issue and confined all testimony to the physical condition of the plaintiff during and subsequent to the policy.
This was reversible and prejudicial error.
We do not know of any rule of law, or any statute that would prohibit the introduction of an application in evidence as was done in this case, at most the statute (section 5174, Code of 1930) simply prohibits a denial of the statements contained in said application.
The question as to whether or not appellee was disabled within the terms of the policy was a question of fact for the jury, and not a question of law for the court.
We respectfully submit that this is not a case such as is covered by section 5174 of the Code, in that the application was not an application for insurance, but was an application for a position, and the only application made for the insurance was a mere verbal notification to the cashier of the Greenville office that insurance was desired, and that for this reason testimony offered as to the date of the origin of the ailment of appellee was competent for the purpose of showing whether or not it was covered by the policy.
B.B. Allen, of Indianola, for appellee.
It is the law that even though the appellee might have had some latent defect which he did not know about at the time of the issuance of this policy, which may have arisen prior to the issuance thereof, but which developed probably as a result of a former injury, yet this fact does not bar him from recovery under the terms of the policy unless there is a warranty as to his condition, or unless there was fraud actively participated in and perpetrated upon the appellant for the purpose of procuring this insurance.
Citizens National Life Ins. Co. v. Swords, 109 Miss. 635, 68 So. 920.
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.
Section 5174, Code of 1930.
Insurance policies are construed more strongly against the insurer and in favor of the insured.
Germania Life Ins. Co. v. Bouldin, 100 Miss. 660, 56 So. 609.
This section creates a rule of substantive law which becomes a part of the contract.
Sovereign Camp W.O.W. v. Farmer, 116 Miss. 626, 77 So. 655.
One evident purpose of the statute requiring the delivery to the insured of a copy of the application is to exclude or eliminate from the contract an application, a copy of which is not delivered to the insured with the policy, and to render ineffective any defenses or attempted defenses based upon anything contained in such application.
Metropolitan Life Ins. Co. v. Scott, 134 So. 159; National Life Accident Insurance Co. v. Williams, 146 So. 555.
Appellee instituted this suit in the circuit court of Sunflower county against the appellant, National Life Accident Insurance Company, on an employee's disability insurance policy which was written and issued while the appellee was employed by said company as an agent. On the conclusion of the evidence in the trial in the court below, the jury was peremptorily instructed to return a verdict in favor of appellee, and from the verdict and judgment entered in pursuance of this instruction this appeal was prosecuted.
The appellant company required all applicants for employment with it to execute a written application therefor on a prescribed form, and in connection therewith and as a part thereof to undergo a physical examination. Upon the acceptance of this application the employee was entitled to insurance in said company without further application or examination. This application and physical examination covered matters usually found in applications for life, health, and accident insurance, and contained the following express agreement on the part of the applicant: "I hereby agree that the above statements and answers are true and made as inducements to my employment and that any misrepresentation or suppression of facts material to the risk shall automatically exclude me from participation in any life, health or accident insurance which may at the time of or later be conditioned on such employment; provided that after two years employment, continuous from date hereof, the aforesaid statements shall be deemed and taken to be true regardless of any evidence to the contrary."
After the appellee was employed by appellant, he applied for the insurance to which he was entitled, and a policy was issued which insured him "against loss of time caused by total disability beginning while this policy is in force and resulting from either bodily sickness contracted while this policy is in force, or bodily injury effected accidently and sustained while this policy is in force;" and the company thereby agreed "to pay to the insured indemnity in the amount herein provided for the period of such total disability excluding the first week and not exceeding two years, provided the insured is under regular treatment of a licensed physician."
In addition to a plea of the general issue, the appellant pleaded, first, "that any disability from which the plaintiff may now be suffering is the result of an illness contracted prior to the date of the issuance of the policy sued on, and is not the result of an illness contracted while the said policy was in force;" and, second, "that the insured, J.P. Prather, at the time the application for the policy was made, and at the time the medical examination upon which this policy was issued was made, wilfully withheld from the defendant the information that he was seriously affected with a disease from which his present condition results."
While there was some evidence tending to show that the appellee could perform, at a sacrifice to his health and physical well-being, some minor and incidental duties about his home and farm, the evidence as a whole clearly shows that he was totally disabled within the meaning of health and accident insurance policies as construed in former decisions of this court. The appellant offered evidence tending to sustain its plea that the appellee's disability was the result of illness and disease contracted prior to the issuance of the policy, and was not the result of illness contracted while the said policy was in force. Objections to this evidence were sustained, and the appellant assigns as error the action of the court in so doing.
Section 5174, Code 1930, provides that: "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."
Other than the application for employment with the appellant company, there was no formal written application for the policy here sued on, and no copy of any application was delivered to the insured with the policy. But the appellant contends that the above-quoted Code section has no application here and cannot operate to prohibit it from showing that appellee's disability resulted from disease contracted prior to the issuance of the policy, although such evidence may dispute or deny the truthfulness of statements as to his health contained in his application for employment. All employees of the appellant are required to execute this formal application for employment, and on acceptance thereof by the appellant, such employees are entitled to insurance of the class here sued on without further application or physical examination. In the application, which contained representations pertaining to the health and medical history of the applicant that were material to an insurance risk, it was expressly agreed that any misrepresentations or suppression of fact material to the risk should automatically exclude the applicant from participation in any life, health, or accident insurance that might be conditioned on such misrepresentation. The questions and answers appearing on this application are devoted almost entirely to matters bearing upon the health of the applicant at the time of and prior to the date of the application. The physician's report of his physical examination of the applicant, which was attached to and made a part of the application, pertains to matters material to an insurance risk, and whatever may have been the incidental purpose of this application, it is manifest that its main purpose was to determine the insurability of the applicant, who, on acceptance of the application, would be at once entitled to demand insurance without further application or examination. The application was in legal effect an application for insurance, and since a copy thereof was not delivered to the insured with the policy issued in reliance thereon, the evidence tending to show the untruthfulness of statements therein in reference to the health of the insured at the time of and prior to the date of the application was properly excluded. Sovereign Camp, W.O.W., v. Farmer, 116 Miss. 626, 77 So. 655; Metropolitan Life Ins. Co. v. Scott, 160 Miss. 537, 134 So. 159.
Affirmed.