COBB v. PACIFIC MUT LIFE INS CO OF CALIFORNIA

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District Court of Appeal, Second District, Division 2, California.

COBB v. PACIFIC MUT. LIFE INS. CO. OF CALIFORNIA.*

Civ. 9372.

Decided: January 24, 1935

Knight, Boland & Riordan, of San Francisco, Heaney, Price & Postel, of Santa Barbara, and Loeb, Walker & Loeb, of Los Angeles, for appellant. Clifton Hildebrand, of San Francisco, Griffith & Thornburgh, of Santa Barbara, and Erwin P. Werner, of Los Angeles, for respondent.

Plaintiff recovered judgment for damages for breach by defendant of a policy of disability insurance, and from such judgment the latter appeals.

On March 15, 1926, appellant issued a policy of insurance providing $15,000 benefit in case of death or permanent total disability. This policy was canceled by mutual agreement following the issuance August 9, 1929, of two policies, the first a $15,000 death benefit policy and the second (on which this suit was brought) a $250 per month disability benefit policy. Two and a half years after the issuance of the two latter policies respondent became permanently totally disabled due to encephalitis, or “sleeping sickness.” Payment of the disability benefits was resisted by appellant, who claimed that respondent had made representations which were both material and false, and were made with intent to deceive appellant, and that, if the truth as to respondent's physical condition had been disclosed at the time, the said policy would not have been issued. This suit was thereupon instituted, and appellant by answer and cross-complaint set up its defense as indicated and asked for cancellation of the contract. On the legal issues the jury returned a general verdict: “We, the jury in the above entitled case, find for the plaintiff and assess his damages in the amount of the present worth of payments of $250 per month for a life expectancy of fifteen years.” A special interrogatory was as follows: “Q. What was the probable life expectancy of August M. Cobb on May 19, 1932? A. Fifteen years.” Judgment was entered for plaintiff in the sum of $30,830, plus interest and costs.

On the equitable issues the jury returned advisory answers to two interrogatories submitted as follows:

“Q. Did the plaintiff Augustus M. Cobb on the 9th day of August, 1929, answer falsely or conceal any information with intent to deceive the defendant with regard to any question propounded to him by Dr. C. S. Stevens in the application for the noncancellable income policy in this litigation? A. No.

“Q. Within seven years immediately prior to August 9, 1929, had Mr. Cobb had any treatments by or consultations with any physician or practitioner which were not periodic medical examinations? A. No.”

Thereupon the court made its findings to the effect that respondent “did not within seven years prior to the date of said application, have any illness or injury other than of a trivial or passing nature,” that he did not fail to disclose any material illness or disability, and, while his consultations with physicians was a matter that was material, appellant was placed on notice of the true facts by statement by respondent that he had had a periodic check up of his condition by physicians; further that respondent answered questions asked him at the time of application truly and without intent to deceive, and that appellant was not deceived.

Appellant contends in effect that respondent lulled it into a sense of security by his disclosure that he had visited several physicians during the interval under investigation by reason of an assumption that such visits were merely physical check ups by a cautious man and not occasions for treatment for a sick person. The positive findings of the trial court, based on the advisory verdicts of the jury, are amply supported by the evidence, and this court on appeal is precluded therefore from reaching a conclusion at variance therewith.

At the time the disability policy sued on was issued, respondent had a valid, incontestable policy in effect with premium paid entitling him to $15,000 in a lump sum in case of permanent total disability. At solicitation of an insurance salesman, respondent surrendered for cancellation this policy, thereby relinquishing the right to collect the $15,000 to which he would now be entitled without contest if it had remained in effect. Before the policy in this case was issued, respondent was re-examined by appellant's medical examiner, and no clinical findings were made which would preclude insurance. The nature and extent of previous disorders was covered by written questions, and it is in respondent's answers thereto, which were written by appellant's examiner, that appellant claims deception and fraud. The latter conceded, however, that, although respondent told the examiner he had been to several physicians, it made no effort to obtain from any one of them a report as to respondent's condition, claiming that it relied on his assertion that such visits were merely physical check ups. The evidence indicates that the present disability of respondent had no connection with the alleged disorders which appellant contends were fraudulently concealed.

The verdict appears to have been rendered upon the theory that the refusal of appellant to pay the monthly disability benefit provided by the contract was such an express repudiation of the insurance contract that under the doctrine of anticipatory breach respondent was entitled to judgment for an amount equal to the present value of the monthly payments for the length of time that respondent at the time of trial would be reasonably expected to live. Robinson v. Exempt Fire Co., 103 Cal. 1, 36 P. 955, 24 L. R. A. 715, 42 Am. St. Rep. 93, holds that in a case such as this the person insured is entitled to recover from the insurance carrier only the amount of the accrued installments. Respondent here under the pleadings before us was entitled to only a few installments which had accrued at the time the suit was brought. The case must be remanded for determination by the trial court as to sum total of the accrued installments. When the remittitur herein is received by the trial court, respondent may file a verified supplemental complaint setting up the total amount of such installments as have accrued up to the time of filing thereof. If put in issue, the amount shall be determined by the trial court. If not controverted, judgment shall thereupon be entered for respondent for the amount then accrued, plus 7 per cent. interest from due dates of such installments.

Judgment reversed, with directions to the trial court to proceed in conformity with the above course.

SCOTT, Justice pro tem.

We concur: STEPHENS, P. J.; CRAIL, J.