Before BRATTON and MURRAH, Circuit Judges, and KENNEDY, District Judge.
T. BLAKE KENNEDY, District Judge.
This is an action in which appellee as plaintiff in the court below sought to recover upon an insurance policy upon the life of William Edward Willsey, husband of the appellee, in the sum of $5,000 in case of death through natural causes and $10,000 in the case of accidental death of the insured, in which policy the appellee was the sole beneficiary and the appellant was the insurer.
Issues were joined and the principal defense relied upon by the appellant upon this appeal is that fraud was practiced upon it by the insured at the time the application was made, followed by the issuance of the policy. The trial resulted in a verdict of the jury for the plaintiff for ten thousand dollars, upon which judgment was entered and is the basis of this appeal.
The policy was issued under date of August, 28, 1952, and the death of the insured was May 24, 1953. The death occurred while the insured was taking a bath in a bathroom and may have resulted from a severe bruise on the head or from water in the lungs or from a combination of these reasons according to the testimony of witnesses and attendant doctors. The question of whether or not the death of the deceased was the result of an accident was submitted to the jury and was affirmatively found, which if the case was properly submitted, settles that question.
As before stated, the pertinent and decisive point in this case before this court concerns the admissibility of evidence and proofs as to whether or not the policy became null and void on account of fraud practiced upon the company by the insured in making representations as to the condition of his health, his consultation of doctors and his hospitalization for a period of a few years prior to his making application for the insurance. The record shows that after having consulted with several insurance agents he called up the appellant company and a representative was sent to confer with him in regard to a policy. This representative was one Spendlove, who was not an ordinary insurance salesman but a staff manager of the appellant who was in charge of men and the direction of the sale of insurance. He went to the home of the insured and in the presence of the insured's wife talked over the matter of issuing a policy of insurance. Also present a portion of the time was another relative of the insured. The testimony of the appellee was upon the insured being asked the questions concerning his health over a period preceding the interview that the agent was told by the insured that he had had an accident in playing baseball by being struck upon the head and that after that time he had dizzy spells, had consulted doctors and had been hospitalized. The insured further stated to the agent that he had more recently consulted a physician for examination in connection with contemplated employment and had been passed by that physician with a favorable report, and that he had not been troubled recently. Thereupon the insurance agent stated that having had no trouble recently these experiences did not matter and were immaterial as to his being entitled to receive insurance. The testimony of the appellee was further to the effect that the agent of the appellant himself wrote the answers and that the insured did not read the application before signing his name thereto. The testimony of Spendlove, the company representative, was somewhat "hazy" and uncertain about this interview but in general it might be considered as a denial of the information given by the insured at the time. However, this was likewise a question for the jury if the case was properly submitted and which was determined in favor of the appellee.
The appellant objected to this form of testimony principally upon the ground that it tended to vary the terms of a written contract in that the contract itself provided in substance that no agent of the company had authority to make any concessions or vary the terms of the insurance contract. In addition it may be said that with the execution of the application the insured signed an authorization statement which was delivered to the agent, reading as follows:
"To Whom It May Concern: I hereby request and authorize you to give The Prudential Insurance Company of America any information they request with reference to my past medical attendance or advice or hospitalization.
Now as to the law which should govern this situation. It may be admitted that under certain circumstances evidence is not admissible to vary the terms of written contracts where the insurance contract provides that no sales agent of the company has a right to change the terms of that contract. However, this being a Utah contract, made and executed in that state, an examination of the law of that jurisdiction is required.
In a decision by the Supreme Court of Utah handed down in 1922, Chadwick v. Beneficial Life Ins. Co., 56 Utah 480, 191 P. 240, there seems to have been a suggestion that in order to avoid and nullify a policy of insurance it must be established that there were material misrepresentations knowingly made with intention to deceive and defraud. In a later Utah case in 1940 in this court involving the subject, Zolintakis v. Equitable Life Assurance Society of United States, 10 Cir., 108 F.2d 902 at page 905, the opinion purporting to follow the Chadwick case says:
"By this decision Utah is committed to the liberal doctrine that before misrepresentations of material facts will void a policy of insurance it must be established that they were not only knowingly made but also wilfully and intentionally, with intent to deceive and defraud."
In 1943 the Supreme Court of Utah in New York Life Insurance Co. v. Grow, 103 Utah 285, 135 P.2d 120, 121, the idea is expressed in the syllabus in the following language:
"Before misrepresentations of material facts will void a life policy, it must be established that they were not only knowingly made, but also willfully and ...