Holbrook v. American National Insurance

BbogdeN, J. Does C. S., 6460, apply to a life insurance policy issued without medical examination for a sum less than $5,000 ? C. S., 6460, as it first appeared in Consolidated Statutes, prohibited life insurance companies from issuing policies “in an amount equal to or exceeding $300” without medical examination. The section was amended by chapter 82, Public Laws of 1925, which increased the amount of policies issued without medical examination to a sum not exceeding $2,000. This act, however, added a proviso as follows: "Provided,, that where there has been no medical examination the policy shall not be ren *335 dered void, nor shall payment be resisted on account of any misrepresentation as to the physical condition of applicant, except in cases of fraud.” Subsequently the Legislature enacted chapter 13, Public Laws of 1927. This statute repealed all prior statutes and reenacted section 6460 as it now appears in Michie’s Annotated Code of 1927. The present C. S., 6460, authorizes insurance companies to issue a life policy without medical examination up to $5,000, but the proviso is the same as contained in chapter 82, Public Laws of 1925. The movement of the law upon the subject clearly indicates that the General Assembly was disposed to permit insurance companies to increase the size of policies that could be written without medical examination, but at the same time, in order to protect the insured, it prescribed that if a policy was issued without medical examination the insurance company could not resist payment of the policy on the ground of physical unsoundness at the time of issuance, “except in cases of fraud.” That is to say, if an insurance company issued a policy to a person it knew to be physically unsound, or took a chance upon a physical unsoundness and without medical examination, then in such event it could not take advantage of its own act in issuing such policy to one physically unsound “except in cases of fraud.” The defendant relies upon the following cases: American National Ins. Co. v. Crystal, 272 S. W., 262; Seabach v. Metropolitan Life, 274 Ill., 516; Southern Surety Co. v. Benton, 280 S. W., 551. An examination of these eases, however, discloses that there was no statutory enactment similar to C. S., 6460. Indeed, practically the same question was decided by this Court in McNeal v. Ins. Co., 192 N. C., 450, 135 S. E., 300. Affirmed.