Marcella HARTE, Plaintiff and Appellant, v. UNITED BENEFIT LIFE INSURANCE CO., a corporation, Defendant and Respondent.
Plaintiff was the named beneficiary of a policy of insurance upon the life of her husband. Following his death, she brought this action on the policy. Her case was presented to a jury, and she rested. Defendant's motion for nonsuit was granted, judgment was entered, and plaintiff appeals.
In his application for the insurance, the husband agreed that the insurer should not be liable ‘until a policy shall be issued, and delivered to and accepted by [him] while in good health and free from injury.’ Decedent had undergone a general physical examination in March, 1961. In April, he had some stomach upsets and had another examination, which revealed that he had developed gastritis and colitis, which his physician attributed to overwork and tension. Otherwise, he was in good health, although overweight. On October 6, he applied for the policy here in issue. The insurer's doctor examined him October 9. There is no suggestion that he withheld from the examiner any information as to his then condition. Thereafter, he began to complain of a pain in his side, and had vomiting spells. On October 28 or 29, x-rays revealed a bowel obstruction and a biopsy indicated it to be benign. Abdomi nal surgery was performed November 3, and the next day the doctor told plaintiff that her husband had an inoperable cancer of a particularly fast-spreading type, and that he had but six months to live.
On November 11, the insurance agent delivered the policy, dated November 1, to plaintiff. The agent asked if Mr. Harte were at home, and plaintiff answered that he was not. ‘I purposely avoided telling him’ that Mr. Harte was in the hospital. The agent told Mrs. Harte that a small increase in premium would be charged because of Mr. Harte's age and overweight condition. She wanted to pay it because her husband ‘might never get another chance to have a policy.’ On the same day, at the hospital, Mrs. Harte asked her husband whether to pay the increased premium. ‘He said he was too sick * * *, he would leave it to me.’ She paid the added premium that evening. There is evidence that decedent was not told, until after November 11, that he had an inoperable cancer. The cancer caused his death April 23, 1962.
An applicant for life insurance may, of course, be required to undergo a medical examination to determine whether a policy shall issue. In such case, the insurer's liability does not attach on completion of the examination, but only when the policy is issued. If, as here, the applicant agrees that liability shall inhere only upon delivery of the policy to the insured ‘while he is in good health,’ the clause will be given effect (see cases collected at 60 A.L.R.2d 1429; 136 A.L.R. 1516).
There is a division of authority, however, as to what constitutes ‘good health’ under such provision. One line of cases conditions liability upon actual good health at the time of delivery. Other jurisdictions hold that apparent good health at time of delivery to an insured acting in good faith precludes avoidance of the policy. California, in a decision discussing both rules, has aligned itself with the ‘apparent good health’ jurisdictions (Brubaker v. Beneficial, etc., Life Ins. Co., 130 Cal.App.2d 340, 278 P.2d 966; hearing denied). The rule is eminently sound. As pointed out in Brubaker, the contrary rule would permit avoidance of the policy because some disease, ‘lurking undetected within’ the body of the insured at the date of policy delivery, and apparent neither to him nor to the medical examiner, later caused his death.
But the distinction between appearance and actuality does not aid plaintiff here. When the policy was delivered, the serious condition of the applicant for insurance was apparent to him and to the beneficiary. He was hospitalized following surgery which had revealed a fatal disease. Plaintiff beneficiary purposely concealed his condition at the time of delivery. Although the applicant had not been told of the diagnosis, he felt ‘too sick’ to consider whether an increased premium should be paid
But plaintiff points to the concession that her husband's cancer obviously had originated before the medical examination of October 9. In effect, she disregards apparent health and emphasizes actuality, arguing that since the fatal disease had in fact taken root before the medical examination and was not then known or detected, its becoming fully apparent before delivery is immaterial. She relies upon judicial language that the good health clause must ‘be construed as safeguarding the company against only such impairment of health of the insured as may have arisen’ between examination and delivery (American Nat. Ins. Co. v. Herrera, 211 Cal.App.2d 793, 802, 27 Cal.Rptr. 641). But that decision does not reject the rule of Brubaker. It differs on its facts, in that there had been no medical examination of Mrs. Herrera. The case turned wholly upon the representations in her application for insurance. Moreover, the holding was adverse to the beneficiary, and we are quite sure that appellant does not desire it literally applied here.
We find dicta in other jurisdictions to the effect that liability may not be avoided ‘unless the unsoundness of the insured's health originated after the examination and before delivery’ (Western & Southern Life Ins. Co v. Downs, 301 Ky. 322, 325, 191 S.W.2d 576, 577) or is avoided only ‘in consequence of a disease contracted’ in that interim (Johnson v. Royal Neighbors of America, 253 Ill. 570, 576, 97 N.E. 1084, 1086), but these are merely generalized statements of the basic rule, and the issue here involved was neither presented nor decided.
Our research discloses one decision (Germano v. Home Life Ins. Co. of America, 135 Pa.Super. 208, 5 A.2d 449), squarely presenting this issue on closely comparable facts. There the applicant, unknown to himself or the insurer, suffered from a carcinoma of the intestine when he applied for insurance and submitted to medical examination. Painful symptoms developed after the examination, surgery was performed, and the latent disease was revealed. The policy was delivered the next day. Nonsuit was granted, and the beneficiary appealed. The court held (5 A.2d 451): ‘If * * * a disease that was dormant, quiescent and inactive becomes active, acute and dangerous to life, * * * and the policy is delivered without knowledge of these facts, [the rule] should not be extended so as to render inoperative a * * * provision * * * that the insured must be in good health when the policy is delivered; * * *.’ Also (pp. 451–452) ‘it does not matter that such change results from the sudden * * * development of a disease which the insured had when he signed the application * * * but of which he was unaware.’ Pennsylvania, like California, follows the ‘apparent good health’ rule (Prudential Ins. Co. of America, v. Kudoba, 323 Pa. 30, 186 A. 793).
The holding of Germano is logical. If the applicant is to have the benefit of the appearance of good health, it is difficult to see why the should not bear the burden of a substantial adverse change in that appearance, clearly known to him but not revealed to the insurer. The facts are undisputed.
DRAPER, Presiding Justice.
SALSMAN and DEVINE, JJ., concur.