Opinion
May, 1912.
Morrison Schiff (Jacob R. Schiff, of counsel), for appellant.
William J. Moran, for respondent.
The plaintiff herein appeals from a judgment dismissing the complaint in an action brought to recover under a policy of health insurance issued by defendant to plaintiff against disability by disease. The policy provides that "for the term of continuous disability during which the plaintiff shall independently of all other causes be necessarily confined to the house, and totally disabled and prevented by bodily disease, not excepted under such policy, from performing any and every kind of duty pertaining to his occupation," he is to receive a weekly indemnity of twenty-five dollars.
Plaintiff proved that in November, 1910, after the policy was issued, he was taken ill with a nervous disease and totally disabled for the term of twenty-seven and one-half weeks. The answer contains a general denial, and a separate defense of the breach of three warranties made by plaintiff at the time of the issuance of the policy. These warranties are as follows:
"L. I am in sound condition mentally and physically; * * * I have never had nor am I now suffering from or subject to * * * any bodily or mental infirmity or deformity, except as herein stated."
"O. I have not been disabled nor have I received medical or surgical attention within the past five years."
"P. Last physician consulted was none in five years."
On cross-examination of plaintiff, it developed that in May, 1909, prior to the issuing of the policy of insurance by defendant to plaintiff, plaintiff made a written application to the department of education for a leave of absence, with pay, on account of his absence from school work from May 10 to May 21, 1909, in which application he stated that he was away on account of "serious personal illness." Attached to the application was the certificate of a physician that plaintiff's illness was influenza and tonsilitis. Plaintiff testified that he did not know or remember, at the time the policy was issued, of this illness in May, 1909. Defendant also introduced in evidence a letter admitted to have been written by the plaintiff to the district superintendent of schools, in May, 1910, in which he stated that his record of attendance, prior to May, 1909, was good, and that the fifteen days' absence in May, 1909, was but a forerunner of the illness from which he suffered from November, 1909, to May, 1910. Plaintiff, in rebuttal, stated that the nature of his illness in May, 1909, was that he had a severe cold and that he was worried; that his throat was very sore; that he found difficulty in talking, and that he had a running nose and a cold in the head. His physician testified that what he meant by the certificate that plaintiff's illness was influenza and tonsilitis was "grippe" or a "cold;" we generally call it "La Grippe." "The nature of the tonsilitis that I spoke of generally goes with the grippe. It consisted of a redness of the throat and little follicles in the tonsils. The tonsilitis was simply the result of the cold. I don't remember whether I examined him. He did not call me to examine him. I don't remember whether I examined him. I was at the house during the day and treated his wife and he complained of having a bad cold, but I don't remember having examined him or having prescribed for him. I certified in the paper to what I saw from the visit to his home."
At the close of plaintiff's case, on this evidence, the learned trial justice dismissed the complaint, holding that the application made to the department of education, and the certificate attached thereto, established a violation of warranties "O" and "P" of the policy.
It is clear that this certification by the physician, without an examination of the plaintiff, and in the absence of evidence that the plaintiff consulted him for the purpose of being treated by him as a physician, established no violation of warranty "P."
As to warranty "O," "I have not been disabled nor have I received medical or surgical attention within the past five years," this warranty must be construed in the light of the purpose for which it was made, viz., to convey to the assurer full knowledge of all serious disabilities from which the person applying for insurance has suffered during the previous five years. Unless it is to be assumed that the business of health insurance is conducted solely for the profit of the insurance companies, without any corresponding possibility of benefit on the part of the assured, it cannot be supposed that the warranty had reference to any such temporary illness as the evidence shows the plaintiff suffered in the month of May previous to the issuing of the policy. Though in his application to the board of education, the plaintiff described it as a serious personal illness, that is but an expression of his opinion, not from a medical point of view, or the point of view of obtaining insurance, but as a compliance with certain established rules of the department of education regulating the pay of its employees. There is no evidence that the disease was of a nature which seriously disabled him, or such as left any serious effects having a bearing upon the purpose and meaning of the policy. His subsequently formed, and subsequently expressed, opinion, in May, 1910, that the illness of May, 1909, was the forerunner of the illness in November, 1909, is also but an expression of opinion of one not an expert, and having no probative value or force.
In Cushman v. United States Life Ins. Co., 70 N.Y. 72, the Court of Appeals say: "In construing contracts words must have the sense in which the parties used them, and to understand them as the parties understood them, the nature of the contract, the objects to be attained, and all the circumstances must be considered. By the questions inserted in the application, the defendant was seeking for information bearing upon the risk which it was to take, the probable duration of the life to be insured. It was not seeking for information as to merely temporary disorders or functional disturbances, having no bearing upon general health or continuance of life. Colds are generally accompanied with more or less congestion of the lungs, and yet in such a case there is no disease of the lungs which an applicant for insurance would be bound to state * * *. In construing a policy of life insurance it must be generally true that, before any temporary ailment can be called a disease, it must be such as to indicate a vice in the constitution, or be so serious as to have some bearing upon general health * * * or such as according to common understanding would be called a disease."
This is no reason why this same principle should not apply in construing the policy of health insurance. The purpose of the questions which the assured is required to answer does not contemplate that he shall establish, before he can enter into such a contract of insurance, that he has never suffered from any temporary illness or slight disability. As before intimated, if such construction is to be placed upon health policies, it would be the duty of the state to forbid the making of such policies; they would be in fact but traps for the unwary, from which the insured could derive no possible benefit.
In the case of Bancroft v. Home Benefit Association of New York, 120 N.Y. 20, the same learned court say: "It is insisted by the counsel for the defendant that if the injury was considered serious at the time, it is one which must be mentioned in reply to the interrogatory * * *. But there are grave and obvious difficulties in this construction. The accidents resulting in personal injuries, which, at the moment, are considered by the parties serious, are so very numerous that it would be almost impossible for a person engaged in active life to recall them at the age of forty or fifty years, and if the failure to mention all such injuries must invalidate the policy, very few would be sustained * * *. If the party gets over the injury completely without leaving any ill consequences in a few days, it is clear that the serious aspect of the case was not a true one."
The court further holds that it was for the jury to decide, under all the circumstances of the case, whether there was a violation of the warranty. In holding, as matter of law, that the application made by the plaintiff to the department of education, and the certificate of the physician attached thereto, constituted a violation of warranties "O" and "P" of the policy, the learned trial justice committed serious error. It is doubtful whether, in the light of the explanations given by the plaintiff as to the circumstances under which the application and the certificate were made, these facts, unsupported by further evidence on the part of the defendant, would constitute any defense to plaintiff's cause of action; but, in any event, it was error to hold that, as matter of law, the evidence established a breach of warranty on the part of the plaintiff.
The judgment must, therefore, be reversed, and a new trial ordered, with costs to the appellant to abide the event.
SEABURY and GERARD, JJ., concur.
Judgment reversed and new trial ordered, with costs to appellant to abide event.