Croll v. John Hancock Mut. Life Ins. Co

198 F.2d 562, 1952 U.S. App. LEXIS 3207

• Court: Court of Appeals for the Third Circuit
• Decided: July 18, 1952
• Docket: 10633_1
• Status: Published

Opinions

STALEY, Circuit Judge.

This is an action upon a life insurance policy commenced in the District Court for the Eastern District of Pennsylvania. On January 5, 1950, the insured died of a heart condition known as an acute coronary occlusion. The insurer defended on the ground that the insured had misrepresented the state of his health by giving false answers in the medical part of his application. The district court directed a verdict for plaintiff-beneficiary in the sum of $686.28, representing the amount of premiums paid by insured plus interest, and plaintiff has taken this appeal.

The insured made a written application for the policy on August 13, 1948. He was then 45 years of age. The application contained, inter alia, the following questions and answers:

“11. Have you ever had or been told that Answer you bad, or consulted or been treated ‘Yes’ by a physician or other practitioner or for any of the following: ‘No’

“D. Pain in the chest, shortness of breath, Coronary Artery Disease or Angina Pectoris ? No

“F. Stomach or Intestinal Trouble, Indigestion, Ulcers, Appendicitis, Gall Bladder or Liver Disorder, Jaundice, Dysentery or Hernia? No

“12. Have you ever had any X-Ray, elec-trocardiographic or blood examinations or studies? No

“13. Have you, during the past five years, consulted any physician or other practitioner, or been confined to or treated in any hospital, sanatorium, dispensary, clinic or similar institution not stated in answers to Questions 11 and 12? No

*********

"I certify that I am the person named as the proposed Insured, that each of the foregoing statements and answers is a statement of fact and not opinion, that I have made and read each of them, and that all such statements and answers are complete, true and correctly recorded.

“Dated at Upper Darby, Pa.,

“Aug. 13, 1948 George J. Croll

“Signature of Proposed Insured.

“Witness: Willard E. Knowles, M.D.”

The insured’s physician was the principal witness; his testimony was for the most part buttressed by his office records. The physician testified that insured had consulted him 28 times during the five year period prior to the date of the written application. Twenty-one of these visits took place during the 7% months before the application was signed. Even more important than the large number of visits is the fact that on numerous calls the insured complained of pains in the chest and other chest symptoms. Chest pain was accompanied by palpitations on one of these occasions. One of the entries in the physician’s records indicates that insured staggered for several minutes, unable to support himself. On other visits the physician’s records disclose that insured complained of stomach and intestinal distress. In January 1948, insured, suffering from acute chest pains and shortness of breath, summoned the physician to his home, where the latter administered morphine. Shortly thereafter, the insured, upon advice of the physician, had an electrocardiogram taken at the heart station of the Bryn Mawr Hospital. The very day before insured made his insurance application he visited his physician. The entry in the doctor’s office records is as follows: “8/12/48. Pain 4Yz days inch — lumbar pains in back —epigastric and back pains are eased by sitting up straight (not completely eased).” The physician’s records as well as the electrocardiogram indicate a tentative diagnosis of coronary occlusion.

The issue before us is whether the district court was correct in taking the case away from the jury. Since federal jurisdiction is based on diversity of citizenship, we apply the law of Pennsylvania. The record is unclear as to whether the insurance policy is a Pennsylvania contract or a Massachusetts contract. Such a determination, however, is not essential to the decision in this case for, regardless of where the contract was made, Pennsylvania courts apply the law of the forum in determining when an issue such as fraud should be submitted to the jury. See Singer v. Messina, 1933, 312 Pa. 129, 167 A. 583, 89 A.L.R. 1271; Sudol v. Gorga, 1943, 346 Pa. 463, 31 A.2d 119; Restatement, Conflict of Laws, §§ 594, 595. The Pennsylvania rule is binding on us in this case. Stoner v. New York Life Ins. Co., 1940, 311 U.S. 464, 61 S.Ct. 336, 85 L.Ed. 284.

Questions about prior medical attendance are material to the risk and false answers permit an avoidance of the policy. Derr v. Mutual Life Ins. Co. of New York, 1945, 351 Pa. 554, 41 A.2d 542. The applicable law of Pennsylvania is fully set forth in Evans v. Penn. Mutual Life Ins. Co. of Phildelphia, 1936, 322 Pa. 547, 186 A. 133, 139,¹ where the court declared: “Where it affirmatively appears, from sufficient documentary evidence, that the policy was issued in reliance on false and fraudulent statements, made by or on behalf of the insured, as where false answers are shown to have been given by insured under such circumstances that he must have been aware of their falsity, the court may direct a verdict or enter judgment for the insurer.” See also Freedman v. Mutual Life Ins. Co. of New York, 1941, 342 Pa. 404, 21 A.2d 81, 135 A.L.R. 1249.

When the above statement of Pennsylvania law is applied to the fact situation here, it becomes abundantly clear that the trial court properly directed a verdict for defendant. With the documentary evidence uncontradicted, the district court necessarily concluded that this was not a case in which an applicant may have honestly given wrong answers. This was not an instance in which an applicant may have overlooked 'comparatively minor illnesses. Cf. Livingood v. New York Life Ins. Co., 1926, 287 Pa. 128, 132, 134 A. 474, 476. No juror should be asked to believe that decedent at the time he made his application may have forgotten his chest pains or the electrocardiogram taken in the hospital or the many visits to his physician during a relatively short period of time.² Appellant stresses the fact that decedent may not have known of his heart condition. The most uneducated and unsuspecting person, however, is as keenly aware as anyone ’ of pains in the chest, shortness of breath, and stomach and intestinal distress.³

In an effort to sustain her position that the question of fraud was one for the jury, plaintiff contends that the documentary evidence is inadmissible. We see no merit in this point. The doctor’s office records as well as the electrocardiogram were properly admitted into evidence under both the Federal Business Records Act, 28 U.S. C. § 1732,⁴ and the Pennsylvania statute.⁵ See Freedman v. Mutual Life Ins. Co., supra, 342 Pa. 404, at 21 A.2d 85-87. The physician’s office records are not rendered inadmissible merely because, in some instances, the physician may have delayed for as long as two weeks in transcribing his notes from his daily records to his office records.

For the above reasons, the judgment of the district court will be affirmed.

1 . Both parties cite this case in support of their positions. The insured there answered “no” to questions relating to health and medical or surgical treatment. Unlike the instant case, none of the questions _ in the application related to symptoms of the specific disease which caused the death. In the Evans case plaintiff-beneficiary admitted that one of the insured’s vertebrae would sometimes get out of its rigid position in the spinal column, but that this was promptly restored by osteopathic treatment and massage. In the opinion of one physician who testified, death of the insured was caused by a dislocated vertebra. The defendant called two doctors, both osteopaths, who testified that they treated the insured for dislocations prior to the allegedly fatal one. A third physician asserted he treated insured for bursitis (which was reported in the application.) and for a bronchial inflammation. Otherwise he considered the insured perfectly normal. The Supreme Court of Pennsylvania held that the issue of fraud was properly submitted to the jury. That Court concluded that nothing in the documentary evidence revealed that insured thought or had reason to think that the dislocations he suffered were more than slight or temporary indispositions, too trivial to be reported. We have no doubt that the Court was influenced by the fact that insured was only 21 years of age when the application was made and suffered from no disease or illness generally considered to be a serious one.

2 . See Derr v. Mutual Life Ins. Co. of New York, 1945, 351 Pa. 554, 41 A.2d 542; Glaser v. Metropolitan Life Ins. Co., 1940, 139 Pa.Super. 261, 11 A.2d 558; Prevete v. Metropolitan Life Ins. Co., 1941, 343 Pa. 365, 22 A.2d 691.

3 . Adams v. Metropolitan Life Ins. Co., 1936, 322 Pa. 564, 186 A. 144, upon which plaintiff relies, is distinguishable. There was no documentary evidence in that case proving that the insured had made false and fraudulent statements.

4 . “Record made in regular course of business.

“In any court of the United States * *, any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence, or event, shall be admissible as evidence of such act, transaction, occurrence, or event, if made in regular course of any business, and if it was the regular course of such business to make such memorandum or record at the time of such act, transaction, occurrence, or event or within a reasonable time thereafter.” 28 U. S.O. § 1732.

5 . “Business records.

“A record of an act, condition or event shall, in so far as relevant, bé competent evidence if the custodian or other qualified witness testifies to its identity and the mode of its preparation, and if it was made in the regular course of business at or near the time of the act, condition or event, and if, in the opinion of the court, the sources of information, method and time of preparation were such as to justify its admission.” Act of May 4, 1939, P.L. 42, No. 35, § 2, 28 Purdon’s Pa.Stat.Annot. § 91b.