Opinion
29951.
DECIDED JULY 16, 1943. REHEARING DENIED JULY 31, 1943.
Complaint on life policy; from Fulton civil court — Judge McClelland. October 17, 1942.
William F. Buchanan, Mary J. Payne, for plaintiff in error.
Douglas, Andrews Cole, F. Lee Evans, contra.
The evidence demanded a finding that the misrepresentations were such as to void the policy.
DECIDED JULY 16, 1943. REHEARING DENIED JULY 31, 1943.
According to the testimony of Dr. Stewart, who had charge of the radium treatment department at the Steiner Cancer Clinic, and who had confined his practice to tumor and cancer since 1924, the insured was born in 1921, and was first treated by Dr. Stewart in 1925, when four years old, for a birthmark type of lesion in the palate, or roof of his mouth. Radium treatments were given the insured in June, 1925, October, 1925, March, 1926, May, 1926, August, 1926, November, 1926, and June, 1927. The last radium treatment he received was in June, 1927. Following that he had two operations, one on August 18, 1928, when he was almost strangled by "a large tumor of his palate, half as big as one's fist," which was removed. At that time he was hospitalized and put to bed, a very sick child. He was dismissed on August 25, 1928. That was an emergency operation and no effort was made to get all of the disease. He was again operated on on September 13, 1928, and kept in the hospital until September 21, 1928. At that time a rather complete removal of his palate was done. The disease of the soft palate and right tonsil was removed and the edges were burned with an electric cautery. "That ended the episode with that lesion apparently, and then he was seen occasionally in the clinic, not admitted to the hospital, in 1928 and 1929, just for observation, to see that he was getting along well, or not. Then on March 22, 1929, he was again operated upon and some more tumor of that same variety removed. He was confined to bed in the Cancer Clinic on that occasion for two days. He was back for visits, merely observation, April 1, April 16, April 27, May 18, June 10, July 10, September 2, October 19, October 9, 1930, December 22, 1930, January 10, 1931, April 18, 1931, September 17, 1932, February 8, 1933, March 3, 1933, July 28, 1933, and then he was away for two years according to the record. He was seen again October 26, 1935, at which time he seemed to be quite all right. We planned to get some dental appliance to help his speech." On December 30, 1940, the policy was taken out, and the last time the doctor had seen him prior thereto was on July 22, 1940, at which time "he was a strong, able-bodied boy." About 6 months after the policy was taken out, to wit: on June 28, 1941, Dr. Stewart saw him again. "At that time he had some ulceration in the left tonsil place that wasn't open in the mouth. And on that date I took some tissue which was reported as epidermoma carcinoma which is sort of a different animal from which we had before, but again cancer. So he was brought back for observation and admitted for operation and was operated on on July 22, 1941, at which time some more tissue was taken and the report from the laboratory was as the report of a few days before, epidermoma carcinoma. This is an entirely different tumor from the one years ago." The defendant then grew worse and died on May 16, 1942. The doctor on cross-examination testified that on July 22, 1940, "the insured was a very strong and able-bodied boy and the record showed that his condition was quite all right. When I saw him the first time in the last illness he had entirely a different form of cancer, a different form known to medical science than he had from this birthmark — that is the record. We fear that was probably caused from the treatment that we had given him to remove the birthmark. I base my opinion on my study of that disease. It is our policy not to tell patients suffering with cancer that they have this disease and I would be foolish to say that at any time I ever told Emory he ever had a cancer."
Fowler, a witness for the plaintiff, testified that he had known the insured for about 12 or 13 years; that he saw him every day or two and "if he was ever sick I did not know it until in July when he got sick;" that the insured did not seek the agent of the insurer to get a policy, but on the contrary, the agent sought out the insured; that at the time the application for insurance was given, the agent of the insurance company had been soliciting the policy for about two hours before the insured agreed to take it; that the agent "had been up there before trying to write the insured a policy; that the insured had a peculiarity about his speech. I asked him about it and he told me his palate had been taken out; that he had a growth on his palate. That was about 1930."
The mother of the insured testified: "I first took him to Steiner Clinic when he was something like four years old, I reckon, three. I took him to Steiner Clinic because he fell and stuck a stick in his mouth and it caused something to grow in his mouth. I didn't take him to a doctor to be treated after he fell because I was working and my mother kept him for us. I just thought it would be all right and never did take him until after he developed that little place in his mouth. I can't remember the doctor I taken him to first, but he didn't suggest that I take him down to Steiner Clinic. Mrs. Hollis, a friend of mine, suggested that. I took him down there. They operated on him." In November, 1941, about a year after the policy had been issued, she took him to Dr. Lingo in Florida. She said she knew that he was a cancer specialist. She further testified that the insured "was a perfectly well and healthy child. I positively did not know that he was suffering from cancer. I know it now" (since Dr. Stewart's testimony in the trial).
The following questions and answers appeared in the application: "21. Are you in good health? A. Yes. 23. What illness, injury or accident have you ever had? Give details. A. Childhood ailments. O.K. now. 25. Have you ever had heart disease, asthma, tuberculosis, cancer, ulcers, diabetes, fits, kidney disease, syphilis, paralysis, rheumatism, sciatica, vertigo, or any illness or disorder of the brain, lungs, spine or nervous system, or any disease not common to both sexes; or suffered the total or partial loss of a hand, foot, eye, or the use thereof? Are you deformed? Do you use intoxicating liquors, morphine, or other narcotics to excess? If yes give particulars. A. No." With reference particularly to question 23, the agent of the company who took the application, in explanation of the answer thereto, testified that the applicant said he had had no diseases, or rather his answer was "none." The agent then asked him if he had had measles, mumps, whooping cough, and things like that; diseases that most children have during childhood. The applicant said, "Yes." After the applicant had said that he had had only childhood ailments, the agent wrote an answer to question 23, "Childhood ailments. O. K. now." Thus this appears as the answer to question 23, as shown above.
The insurance in the instant case is what is known as "industrial insurance" and is for small amounts only. In issuing this type of insurance the insurance companies rely upon the truthfulness of the statements made by the applicant for insurance in his written application. Such contracts are entered into by the insurance companies in the "utmost good faith" and they have the right to expect that "every application for insurance shall be made in the utmost good faith." Our courts have held that this is especially true where the insurer, because of the smallness of the amount of the policy, relies entirely on the statements of the insured in the application and his responses to the questions of its agent, without requiring a medical examination. See National Life Accident Insurance Co. v. Strother, 53 Ga. App. 241, 245 ( 185 S.E. 373); Metropolitan Life Insurance Co. v. Bugg, 48 Ga. App. 363 ( 172 S.E. 829).
The uncontradicted evidence showed that the insured was born in 1921, and that he knew that he was first treated in 1925; that he was given radium treatment seven times, the last of which was in June, 1927. Then he had an operation in August, 1928, when he was almost strangled with "a large tumor of the palate half as big as one's fist." He was again operated on on September 13, 1928; also on March 13, 1929, "some more tumor of the same variety was removed." He went back to the hospital "for visits, merely observation," sixteen times, the last of which was on July 28, 1933. He made no more visits to the hospital until October, 1935. At that time he "seemed to be quite all right." Then on July 22, 1940, the doctor at the clinic saw him again and testified that at that time "he was a strong able-bodied boy." About six months thereafter, the policy in question was taken out [December 30, 1940]. After the policy was taken out, the doctor at the clinic saw the deceased on June 28, 1941, and operated again for ulceration of the left tonsil. He was also operated on in July, 1941. The doctor testified that this was "an entirely different tumor from the one years ago." The doctor further testified: "We fear that [the last ulceration] was probably caused from the treatment that we had given him to remove the birthmark" on the palate. The evidence further showed that the insured had to know that he had had his palate removed, which caused him to talk in a "peculiar manner," for he told his friend that "he had a growth on his palate and he had it removed." Thus the insured knew, as above indicated, that he had been operated on three times, hospitalized, and had returned for the number of times as above stated for observations by the doctors at the hospital prior to his application for insurance.
In the instant case the application for insurance was not attached to the policy and was not a part thereof. Code, § 56-904 And "although the unattached application could not be admitted for the purpose of showing a breach of the contract, since it form no part of the contract, still, where the defense is that the policy was fraudulently procured by reason of false and fraudulent representations material to the risk, the application is admissible, not as a part of the contract, and not for the purpose of showing that the policy was void under the contract, but to show that it was fraudulently procured." Couch v. National Life Accident Insurance Co., 34 Ga. App. 543 ( 130 S.E. 596). Where answers attacked as being untrue appear only in the application, actual fraud must be shown, and "where it is shown that a material statement made in such application [for insurance] was false, that its falsity was known to the insured at the time it was made, that it was made with a view to procuring the insurance, that the company had no notice of its falsity, and that the company acted upon it to its injury, the law will conclusively presume an intent to deceive, and a case of actual fraud will be made out, although the insured may not have really intended to prejudice the rights of the company." Northwestern Life Insurance Co. v. Montgomery, 116 Ga. 799 (2) ( 43 S.E. 79). Conceding that the defendant did not know that the disease or trouble with his palate was a disease known as cancer, and conceding that his answer that he had never suffered with a disease denominated cancer in so far as he knew, was truthful, yet, when he was asked the further question, "What illness, injury, or accident have you ever had? Give details," his answer was in effect that he had had no other illness except childhood illnesses. He had to know that he had had an illness prior to the issuance of the policy and that he had been treated therefor, although the illness might not have been named by the doctors, or he himself probably had not given it a name other than a disease of his palate. Thus we think the evidence demanded a finding that his answer to the question as to illness was untrue; that he knew that it was untrue; and that the representations were material. The test of the materiality of the statement or representation "is not whether the matter represented shall have actually contributed to the contingency or event on which the policy is to become payable, but is whether it changed the nature and character of the risk and increased it as against the insurer under the particular policy, and by increase in risk is meant an increase that is at least substantial." Preston v. National Life Accident Insurance Co., 196 Ga. 217 ( 26 S.E.2d 439).
It is our opinion that under the provisions of the law as stated above, the evidence demanded a finding that the misrepresentations were such as to void the policy. See also Vaughn v. National Life Accident Insurance Co., 189 Ga. 121 ( 5 S.E.2d 238).
Judgment reversed. Broyles, C. J., and Gardner, J., concur.