Cobb v. Pacific Mutual Life Insurance Company Of California

51 P.2d 84 (1935)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

P brought this action against D upon two policies of insurance issued by said company to insured P, during the month of August 1929. One was a life insurance policy and the other was a disability policy. The disability policy called for D to pay on account of disability resulting from sickness or accidental means, at the rate of $250 per month for the period throughout which such disability 'consists of the continuous, necessary and total loss of all business time.' The two policies were from reissues of an original policy issued from March 15, 1926. The original policy was not only a life policy but it also contained a provision known as a business, permanent total disability provision which provided for health indemnity payment in a lump or gross sum of $15,000 in the event the insured should become totally, continuously and irrevocably disabled as a result of sickness. In 1929 two separate policies were issued to take the place of the 1926 policy, one being issued solely upon the life of the insured and the other being issued as a noncancelable income policy, providing for the payment of health indemnity at the rate of $250 per month 'for the period throughout which disability described above [in said policy] consists of continuous, necessary and total loss of business time, . . .' P became wholly, permanently and incurably disabled from the disease known as encephalitis or sleeping sickness. Proper notice as to disability was given and demand was made for monthly indemnity at the rate of $250 per month. D repudiated its contract by giving notice of rescission claiming fraudulent representations and the suppression of material information bearing on the state of health of D. D made written notice offering to restore all the premiums it had received from the insured, with interest, which amount it afterward deposited in court. P sued D asking for $54,270 which was the rate of $250 per month for P's expected life span. The jury rendered a verdict in favor of P and awarded $250 per month for a life expectancy of fifteen years.' The court awarded the present worth of that sum as $30,830. The court concluded that while it is a fact that certain answers made by the P as to questions bearing upon his health were not correctly given and certain facts within the scope of the medical examination were not disclosed by the insured, none of the acts or omissions complained of was 'material to the acceptance of the risk and hazard assumed by defendant' and none of the erroneous answers made to questions asked or failure to give requested information was with intent to deceive the insurer. D appealed. The decision was reversed and P was remitted to the amount of the accrued installments. The finding that the policy had not been fraudulently or wrongfully procured was sustained. P appealed.