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Action on life policy. Before Judge Lowe. Fulton Civil Court. May 12, 1954.
1. Where error is assigned on the overruling of a motion for judgment notwithstanding the verdict, but it is not made to appear that a motion for a directed verdict was first made as a condition precedent to the motion for judgment notwithstanding the verdict made after the trial, no question is presented for determination by this court.
2. (a) Under conflicting evidence, it is a question of fact for jury determination as to whether untrue answers written to questions propounded in an application for life insurance by the sales agent for the insurer were falsely made by the applicant, or whether the answers were correctly given but falsely inserted in the application by the agent.
(b) Where answers to questions propounded in an application for life insurance are correctly given, but false answers are inserted in the application by the sales agent for the insurance company, the agent's knowledge of the falsity of the answer will be imputed to the company.
3. A ground of a motion for new trial, based on newly discovered evidence, which fails to comply with the specific mandate of Code 70-205 is defective, and it is not error for the trial court to refuse to grant a new trial on the basis of such ground.
Ira Goolsby brought an action in the Civil Court of Fulton County on a policy of life insurance on his wife, Annie Goolsby, in which he was named beneficiary. The company denied liability on the ground that, at the time of making the application, the insured was suffering from a fatal cancerous condition, which was known to her and of which she failed to inform the company. It appeared upon the trial that the application (which was not attached to the policy) was taken on December 22, 1952, the policy was issued on January 5, 1953, and the insured's death, which was the result of cancer, occurred on May 7, 1953. On May 5, 1952, the insured had suffered two operations, one for removal of a cancer of the breast and the other a therapeutic abortion which left her incapable of bearing children.
Upon the trial of the case the application for insurance was introduced in evidence, which had the answer "No" written after the following questions: "Has proposed insured had any illness, injury, or accident in the past five years? Has proposed insured ever been confined to a hospital or sanitarium?" The question, "Is proposed insured in good health to the best of your knowledge?" was answered in the affirmative. The sales agent for the defendant who procured the application testified that he asked the questions of the applicant and wrote down the answers as given, and was not informed that the insured had had an operation. The plaintiff, on the contrary, testified that he was present during the interview, and the agent did not ask all of the questions appearing on the form, that he was informed that the proposed insured had been to Grady Hospital to have kids and for an operation to keep her from having kids, and a "condition with the breast she thought about the baby"; that the agent said everything was all right; that the plaintiff and his wife did not know at that time, and he did not know until after her death, that she had cancer; that he knew she had a mole taken from her breast, but understood the operation was "to keep from birthing more kids, and they cut her in 2 places"; that he begged the doctors to tell him, when she went back to the hospital in 1953, but they never did tell him what was the matter with her, and he thought she died because they "cut her too deep" in the operation. The defendant introduced medical testimony showing that the death resulted from a metastasis of the malignant condition of the breast, but it did not appear from this testimony whether the insured or her husband had been informed of her condition.
A verdict was returned for the plaintiff. The defendant moved for a judgment notwithstanding the verdict, and filed a motion for new trial on the general grounds and two special grounds. The exceptions here are to the denial of these motions.
1. By the terms of the Practice and Procedure Act, as amended in the November-December Session of the General Assembly in 1953, it is a condition precedent to a motion for judgment notwithstanding the verdict that a motion for a directed verdict must have been made and denied (Ga. L. 1953, Nov-Dec. Sess., pp. 440, 444; Code, Ann. Supp., 110-113); and where, in the bill of exceptions assigning error on the denial of the motion for judgment notwithstanding the verdict, it is not made to appear that such condition precedent was complied with, no question is presented for determination on the denial of the motion for judgment notwithstanding the verdict.
"A provision in a life-insurance policy, issued without medical examination and without the application being attached to and made a part thereof, that it shall not take effect unless on the date of delivery the insured is in sound health, refers to a change in health between the time of taking the application for the insurance and the date of delivery of the policy; and where the condition of the health of the insured on the date of delivery of the policy is the same as on the date of application, such provision will not avoid the policy." Interstate Life &c. Ins. Co. v. McMahon, 50 Ga. App. 543 (2) (179 S. E. 132). See also Liberty National Life Ins. Co. v. Hearing, 80 Ga. App. 81 (2) (55 S. E. 2d 641).
The evidence here demands a finding that the condition of the insured was the same upon the delivery of the policy as when application was made for the insurance, and this condition was that she was suffering from the cancerous condition from which she died. The evidence does not demand a finding that either the insured or the plaintiff knew this condition existed, but does demand the finding that they knew of the recent operation on her breast, and that, had the defendant been informed of the facts, even as the plaintiff understood them according to his testimony, the company might have been put on inquiry as to the true physical condition of the applicant. Accordingly, the single controlling issue in the case was whether or not the insurance agent was informed of this hospitalization, and, if so, what the effect of that information would be on the validity of the policy where it was not communicated by the agent to the insurer. The first is a question of fact; the second, of law. As to the first, either the applicant falsely answered the questions relating to hospitalization, or they were answered correctly and the agent falsely wrote the negative, instead of the affirmative response into the application. This presented a jury question which was resolved in favor of the plaintiff. See Gulf Life Ins. Co. v. Moore, 90 Ga. App. 791 (84 S. E. 2d 696). the court charged that, should the jury so find, they should consider the information as though it were a part of the application for insurance which had been passed on to the defendant insurer, and special complaint is made of this charge. However, in Clubb v. American Accident Co., 97 Ga. 502 (25 S. E. 333) the following was held: "Where soliciting and forwarding applications for policies of insurance was within the scope of the duties of an agent of an insurance company, and such agent undertook to prepare for another an application for insurance and wilfully inserted therein a false answer to a material question, he will be regarded in so doing as the agent of the company and not of the applicant, and the agent's knowledge of the falsity of the answer will be imputed to the company." This decision was followed in Stillson v. Prudential Ins. Co., 202 Ga. 79, 83 (42 S. E. 2d 121), with the following comment: "It must be remembered that in the instant case the beneficiary is suing on the policy just as it is written; the defendant company seeks to avoid the contract of insurance, notwithstanding its agent practiced a fraud upon both the insured and the insurance company, if the contentions of the plaintiff are believed by the jury. If the plaintiff's contentions are true, then we think that the company which made it possible in the first instance for the agent to perpetrate the fraud should suffer rather than the other innocent party." In arriving at this conclusion, the Supreme Court disapproved the contrary ruling in National Accident &c. Ins. Co. v. Davis, 179 Ga. 595 (176 S. E. 387), which latter was based in part on the cited authority of Reliance Life Ins. Co. v. Hightower, 148 Ga. 843 (98 S. E. 469), and New York Life Ins. Co. v. Patten, 151 Ga. 185 (106 S. E. 183), the same cases particularly relied upon by the plaintiff in error here, together with American National Ins. Co. v. Floyd, 34 Ga. App. 541 (130 S. E. 531) (in which latter case the Hightower and Patten cases were cited as controlling authority). Stillson v. Prudential Ins. Co. of America, supra, was subsequently followed by this court in the similar case of Barber v. All American Assurance Co., 89 Ga. App. 270 (79 S. E. 2d 48), where the Stillson case was construed as holding that the fraudulent act of an agent in writing false answers on an application for insurance would bind the company to knowledge of what the true answers would have revealed, without the necessity of the plaintiff showing further fraud on the part of the agent in preventing the applicant from knowing the contents of the application after it was written. However, the present case is stronger for the plaintiff than either the Stillson or Barber cases in that here the application was not attached to the policy and so did
not become a matter of contract between the parties, and also because it affirmatively appears that the applicant did not read the application after it was written, but, when it was offered to her, merely handed it back with the comment that she did not understand it, leaving the sales agent with the impression that she was unable to read.
There was no error in the charge of the court, and the general grounds of the motion for new trial are without merit.
3. By the terms of Code 70-205, it is provided that, "when a motion for a new trial is made on the ground of newly discovered evidence, it must appear by affidavit of the movant and each of his counsel that they did not know of the existence of such evidence before the trial, and that the same could not have been discovered by the exercise of ordinary diligence." The second special ground of the motion for new trial, based on newly discovered evidence, is fatally defective. By the clear and unambiguous mandate of the statute there must be an affidavit that diligence was exercised by the movant and each of his counsel. No affidavit made in behalf of the movant insurance company appears, and this is a fatal defect. Southern Fertilizer &c. Co. v. Carter, 21 Ga. App. 282 (2b) (94 S. E. 310). Only one of movant's counsel, of which there were two of record, has made affidavit that he exercised the required diligence, and this is likewise a fatal defect. Verdery v. Campbell, 203 Ga. 211 (1) (46 S. E. 2d 66). This ground furnished no basis for the grant of a new trial.
The trial court did not err in overruling the motion for a new trial as amended or in overruling the motion for judgment notwithstanding the verdict.
Judgment affirmed. Gardner, P. J., and Townsend, J., concur.
J. C. Bowden, contra.
William F. Buchanan, Newell Edenfield, Lamar W. Sizemore, for plaintiff in error.
Saturday May 23 03:07 EDT

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