Washington Life Insurance v. Box Co.

Hoke, J. The statute more directly pertinent to the question presented provides that “All statements or descriptions in any application for a policy of insurance, or in the policy itself, shall be deemed representations and not warranties, and a representation, unless material or fraudulent, will not prevent a recovery on the policy,” and in authoritative cases construing the law it is held that every fact untruly asserted or wrongfully suppressed must be regarded as material if the knowledge or ignorance of it would naturally influence the judgment of the underwriter in making the contract at all, or in estimating the degree and character of the risk, or in fixing the rate of the premium. Schas v. Ins. Co., 166 N. C., 55; Bryant v. Ins. Co., 147 N. C., 181; Fishblate v. Fidelity Co., 140 N. C., 589. Considering the record in view of these principles, it.appears that in the application for this insurance policy and in answer to direct questions on the subject, asked and answered as an inducement to the contract, the intestate stated that he had never, had spitting of blood, and that he had never had Spanish influenza, and that both statements were false. It is very generally recognized that the spitting of blood always is regarded as a serious symptom, and not infrequently indicates the presence or near threat of tuberculosis (the disease of which intestate died), and that Spanish influenza has a tendency, at least for a period following the disease, to weaken the resisting powers of a patient and render him more likely to succumb to an attack of serious illness, and assuredly its existence, or the fact that an applicant had been subject to such a disease, would naturally call for further and fuller investigation of the case, and this being true, in our opinion both of these should be regarded as material, and for the false statements concerning them the policy has been properly set aside. It is urged for appellants that the jury in their verdict has throughout negatived any and all existence of fraud on the part of the applicant, [547] but the statute itself and the general principles applicable are to the effect that fraud is not always essential, and tbat the contract will be avoided if statements are made and accepted as inducements to the contract wbicb are false and material. Ins. Co. v. Woolen Mills, 172 N. C., 534; Schas v. Ins. Co., supra. It is further insisted for the appellants tbat the jury have found in response to the seventh issue tbat the applicant withheld no fact relating to bis physical condition or personal history wbicb be should have communicated. An examination of the facts in evidence and the charge of the court concerning them will disclose tbat the issue was submitted in reference to matters other than those included in and determined by the specific findings to wbicb we have referred; but if it were otherwise, it is directly held in Ins. Co. v. Woolen Mills, supra, that a general finding' of the kind presented in this seventh issue will not be allowed to affect the result when there are also specific findings of material facts wbicb avoid the policy as a matter of law. We are not inadvertent to the position prevailing in this State to the effect tbat where, on payment of the first premium, a policy of insurance is delivered without qualification, there is a completed contract of insurance, and tbat the parties are concluded as to the delivery of the policy during the good health of the insured except in cases of fraud. An instance and application of the principle appears at the present term in Ins. Co. v. Grady, ante, 348. The ruling, however, only refers to the inception of the contract, tbat is, tbat on the facts suggested there is a completed contract of insurance between the parties, and does not and is not intended to affect the right of the company to have the policy set aside as stated either for fraud or false and material statements made by the applicant as an inducement to the contract. There is no error, and the judgment directing cancellation of the policy is affirmed. No error.