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MUTUAL OMAHA INSURANCE COMPANY v. BOSSES (01/09/68)

decided: January 9, 1968.

MUTUAL OF OMAHA INSURANCE COMPANY, APPELLANT,
v.
BOSSES



Appeal from decree of Court of Common Pleas of Luzerne County, Oct. T., 1966, No. 14, in case of Mutual of Omaha Insurance Company v. Fred F. Bosses.

COUNSEL

William J. Toy, with him George A. Spohrer and Walter B. Gibbons, for appellant.

Perry J. Shertz, with him Rosenn, Jenkins & Greenwald, for appellee.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Musmanno. Concurring Opinion by Mr. Justice Eagen. Mr. Justice Jones and Mr. Justice Roberts join in this concurring opinion. Dissenting Opinion by Mr. Justice O'Brien. Mr. Justice Cohen joins in this dissenting opinion.

Author: Musmanno

[ 428 Pa. Page 251]

On August 1, 1964, Fred F. Bosses, member of the B'nai B'rith, executed an application form for certain insurance benefits under a Major Medical Plan offered by the Mutual of Omaha Insurance Company to members of B'nai B'rith, and, in due course, a certificate of insurance was issued to him. Within the two-year period provided under the policy, the insurance company filed an action in equity to rescind the insurance policy on the basis that Bosses had withheld from his answers on the application form certain medical history which indicated he had suffered in the past from a subtotal gastrectomy and a ventral hernia, also arthritis, fibrositis of the left arm, prostatic hypertrophy and disc trouble to his back, none of which medical information the Company alleged had been disclosed by Bosses in his application.

[ 428 Pa. Page 252]

The defendant filed preliminary objections in the nature of a demurrer, contending that, by the terms of the master policy, under which the certificate was issued by the plaintiff, right of rescission was excluded. The Court of Common Pleas of Luzerne County sustained the preliminary objections and dismissed the complaint. The plaintiff appealed.

Paragraph 2 of Part C of the policy states: "Sicknesses for which the Member has received medical treatment or advice prior to the date of application will not be covered unless full disclosure of such medical treatment or advice was made on the application, and the Company issued a Certificate."

If the applicant misrepresented himself in the application the most the insurance company can exact is refusal to pay benefit for the sicknesses in controversy, i.e., the arthritis, fibrositis, etc. The insurance company, however, does not stop with merely denying coverage for the indicated infirmities. It seeks to cancel the entire policy. For a broken finger it wishes to saw off an arm. This it cannot do because the clear language of the policy does not permit it. If failure to disclose certain medical information was to work a forfeiture of the entire policy, that contingency could have been, and should have been, so stated. The fact that it was not so declared is evidence that such a drastic termination of the policy was never intended.

When, in Part C, paragraph 2, the insurer declared that undisclosed sicknesses would not be covered by the policy, it excluded rescission. Expressio unius est exclusio alterius. Fazio v. Pittsburgh Railways Company, 321 Pa. 7, 11.*fn*

Part J2 of the policy reads: "If, under the terms of the preceding paragraphs, evidence of individual insurability

[ 428 Pa. Page 253]

    is required, an eligible Member shall become an insured Member on the date his application is accepted by the Company. If evidence of insurability is waived, an eligible Member shall become an insured Member on the later of (a) the effective date of ...


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