to infer from the evidence that the applicant, in good faith, did not consider his visits to the doctor of sufficient importance to report them, if indeed, he had this detail in mind when he signed the prepared application for reinstatement. The court held that the question of insured's fraud was for the jury and not the court.
In Adams v. Metropolitan Life Insurance Co., 322 Pa. 564, 186 A. 144, supra, the insured had visited her physician 15 times during a period of slightly more than 3 months prior to her application for insurance and failed to disclose the same when asked the question, 'Have you been attended by a physician during the last 5 years'? During these visits she was actually being treated for an inflammation of the kidney, but this was not disclosed to her by her doctor. She believed she was being treated for headaches. The Supreme Court of Pennsylvania held that in view of the fact that she was unaware of the existence of any organic disease or serious disorder, it was for the jury to say whether or not she was guilty of bad faith in answering the questions as she did.
The Government relies chiefly upon Pence v. United States, 316 U.S. 332, 62 S. Ct. 1080, 86 L. Ed. 1510, supra, wherein the Supreme Court sustained the Government's motion for an instructed verdict. In the Cardwell case the Court of Appeals for the 5th Circuit distinguished the Pence case on its facts, and it may also be distinguished from the instant case. Pence had been a physician in the military service of the United States; his policy lapsed in 1920, and in his application for reinstatement in 1927 categorically denied that he had been treated for any disease of the throat, heart or stomach, that he had consulted a physician, or had been ill since the lapse of his policy. However, in an application for compensation filed in 1928, Pence stated that in 1918 an Army doctor had told him that his heart was shot and he had severe gastric upset, which was the forerunner of duodenal ulcer which perforated in 1920 and again in 1925. In 1925 he received a gastro-intestinal X-ray which resulted in a diagnosis of suspected duodenal pathology. In addition there was also evidence of treatment by other physicians for myocarditis and sinusitis. The Supreme Court observed that his admissions left no room for conjecture as to the falsity of the representations and of the knowledge of such falsity and on the basis of these facts held that the requisite intent to defraud would be presumed and therefore need not be proven in the absence of countervailing evidence.
That the Pence case in no way controls the present case is readily apparent. Pence was a physician with full knowledge of his physical condition and the import of the questions. Kammer was a layman who, understandably, felt he was not ill, but merely believed his trouble to be one of adjustment to his business and family life after a tenure of service in the Army. As in the Cardwell case, it is reasonable to infer from the evidence that Kammer, in good faith, did not consider his visit to the doctor of sufficient importance to report it, if indeed, he had the visit in mind when he signed the application for reinstatement.
The Government also relies on the recent case of McDaniel v. United States, 5 Cir., 1952, 196 F.2d 291, but it too may be distinguished on its facts from this case. Subsequent to the lapse and prior to reinstatement, McDaniel made several visits to a doctor for throat and gland trouble, and the doctor made X-rays and recommended an operation. Later he made numerous visits to two other doctors for examination and X-ray treatments. A needle biopsy was performed and a diagnosis of 'Probable Hodgkins Disease' was made. Though he was not told that he had Hodgkins disease, he knew from what the doctors told him and the treatments he received that he was seriously disabled and on that basis had applied for and received a seventy per cent disability compensation rating. The court very properly distinguished the Cardwell case and entered judgment for the defendant.
Under the facts of the instant case, the intent to deceive cannot be presumed from the false representation, rather it is for the Court sitting as a jury to determine whether Kammer had made a false representation with knowledge of its falsity and with intent to deceive. From the evidence, the Court finds that the insured had no intention of deceiving and defrauding the Government, and, therefore, finds for the plaintiff and against the defendant.
Conclusions of Law
1. The defense of fraud is an affirmative defense and the burden is on the defendant.
2. In an action to set aside an insurance contract on the ground of fraud, evidence tending to prove the fraud must be clear and satisfactory and a mere preponderance of the evidence which is somewhat vague or ambiguous is insufficient.
3. The necessary elements for the defense of fraud are (1) a false representation (2) in reference to a material fact (3) made with knowledge of its falsity (4) with intent to deceive and (5) with action taken in reliance upon the representation.
4. The representation of the insured that he had not consulted a physician regarding his health was material as a matter of law.
5. The fact that the insured had failed to disclose a visit to a physician does not in itself establish fraud.
6. An applicant for insurance is not required to disclose the fact of consulting a physician for slight or temporary ailments.
7. Where reasonable men may differ on the question of whether a false answer was knowingly made with intent to deceive, it is a question to be submitted to the jury.
8. Where there is no room for conjecture as to the falsity of the representations and of the knowledge of such falsity, and there is no countervailing evidence, the requisite intent to defraud may be presumed.
9. Under the facts of the instant case, fraud cannot be presumed. It is a question for the Court sitting as a jury.
10. National Service Life Insurance in the amount of $ 10,000 represented by Certificate No. V 307 44 02 was in full force and effect at the death of the insured, Frank Kammer, and the beneficiary, the plaintiff, is entitled to the benefits thereof.
Judgment will be entered accordingly.
© 1992-2004 VersusLaw Inc.