Baker v. Continental Casualty Co.

Hammond, J., delivered the opinion of the Court. The appeal in this case is from the action in the Court of Common Pleas, setting aside a verdict of the jury in favor of the appellant, Norman W. Baker, the plaintiff below, and entering judgment, notwithstanding the verdict, in favor of the appellee, Continental Casualty Company, the defendant below. ⁴⁶⁶ The appellant is a young man who served three years as a Navy Aviation Cadet, and upon his return to civilian life, resumed his studies at Swarthmore College. Upon graduation from that institution in February, 1949, he became a full-fledged member of the American Society of Civil Engineers, having been a student member while in college. Shortly after his graduation, he was sent an application for enrollment in a group accident and health insurance plan of the American Society of Civil Engineers, which the Continental Casualty Company was underwriting.

He filled out and mailed the application, which was accepted by the appellee without medical examination, and received a certificate of insurance which, among other things, provided sickness benefits of $50 per week for a maximum period of one year. After his graduation and before, and at the time, he applied for his insurance, the appellant was employed as a civil engineer for a construction company. In the Spring of 1950, some six months after the effective date of the policy, the appellant first began to feel sick. He had a cold which he could not throw off.

His ailment was diagnosed as tuberculosis late in 1950, and he was completely disabled from November 9,1950 for more than a year. Proofs of claim, duly filed, were rejected by the appellee. There is no dispute that the basic damages recoverable, if the appellant is entitled to recover, amount to $2,600.00. Suit was filed in the Court of Common Pleas of Baltimore City in December, 1951 and after trial, a jury found a verdict for the plaintiff in the amount of $2,756.00 — the agreed amount of $2,600.00, plus interest.

The Court set aside the verdict and this appeal followed. The appellee’s defense at the trial of the case was based upon the application and the answers given therein. At first, two questions were relied upon. “Are you now to the best of your knowledge and belief in good health and free from any physical impairment or disease? (Give details of all exceptions).” This question was answered “Yes”.

The second question was, “Have you ⁴⁶⁷ ever had any injury, sickness or physical condition requiring a doctor’s care or a surgical operation? If so, state nature, dates, and duration of disability.” The answer to this question was, “Yes, tonsillectomy — 1931”. Any defense based on the first question and answer has been abandoned by the appellee, and it now relies solely on the answer to the second question. The appellee argued below and in this Court that it was entitled to judgment n.o.v. for one reason, “because it appears from the undisputed evidence offered by the plaintiff that he had had a ‘physical condition requiring a doctor’s care’ for several years before he signed the application, and his representation of the contrary in his application was material to the risk, in that the insurance would not have been written if he had disclosed that he was under a doctor’s care for a tubercular spot on his lung.” The Court, in its final charge to the jury, told them that as a matter of law, the answer to the question involved was material to the risk and if the representation in the answer was found by the jury to be untrue, this would be a material misrepresentation, entitling the defendant to prevail.

The Court further instructed the jury that the answer to the second question, “Yes-tonsillectomy, 1931”, was equivalent to saying that Baker had had nothing other than that minor operation, the equivalent being, No, that he had had no injury, sickness or physical condition requiring a doctor’s care ... so that it is up to you, members of the jury, to determine whether the answer to that question was truthful or whether it was a misrepresentation of the actual conditions. We consider it unnecessary to pass on the Court’s instructions to the jury on the question of materiality and the effect of Baker’s answer to the second question since, as did the jury, we find for the appellant, and the instructions given were as unfavorable to him as could be expected. We think that the decisive question in the case is whether, in the light of Baker’s history, his answer was untrue and a misrepresentation, as a matter ⁴⁶⁸ of law, or whether the jury should be permitted to decide its truthfulness or untruthfulness. At Swarthmore in the fall of 1946, after his return from his tour of duty in the armed services, Baker had a routine chest x-ray taken by a mobile unit.

The film used was “an unsatisfactory type of film” and Baker was referred to the Henry Phipps Institute of Philadelphia for a better picture. The second x-ray was taken by Baker to his family physician in Reisterstown, who referred him to Dr. Walton, an x-ray specialist in Baltimore. In turn, Dr. Walton sent Baker to Dr. H. Vernon Langeluttig, a specialist in internal medicine and diseases of the chest, and Chief of the Tuberculosis Division of the Baltimore City Hospital and consultant to the Veterans’ Administration. Baker was continuing his studies at Swarthmore and did not see Dr. Langeluttig until the Spring of 1947, when the doctor then examined the previous x-rays and took his own.

He said that the x-rays disclosed “what had been diagnosed by Dr. Walton, Dr. Kilby, and myself, as a very minimal infiltration in the second interspace on the right ... in popular parlance that is what is called a spot ... it was of a very minimal nature and could easily have been overlooked because of its minimal extent.” The doctor testified that it is absolutely impossible to make a positive diagnosis of tuberculosis from an x-ray film showing such a spot. It is necessary to obtain “positive bacteriological proof. That is, we must find a tuberculosis bacillus in the patient’s sputum or in the patient’s gastric contents”. These tests were made on Baker in 1947, 1948 and 1949, and consistently showed no tuberculosis.

In answer to a question as to what he advised his patient, Dr. Langeluttig said, “I advised Norman that he had a spot on his lung which was suspicious but it was not conclusive of active disease, and that he should be re-x-rayed at periodic intervals as a safety precaution.” . He was asked whether he prescribed any treatment of any kind for Baker, and replied: “There was no treatment to prescribe.” The doctor further testified ⁴⁶⁹ that “a spot on the lung doesn’t necessarily represent active disease. Approximately 50 'per cent of the population, of the people sitting in this room, have spots on their lungs which may show up by x-ray. That has been proved medically time and time again, but that does not mean we have active infection or disease in our lungs.

So that, in order to determine whether or not the spot is active you have to follow a patient by obtaining several x-rays, ... we perform routine periodic examinations of the sputum and the gastric washings on the patient to see if we can find the causative organism.” On October 30, 1947, the doctor wrote the appellant’s mother that the x-ray just taken “has shown no progression . . . and I certainly feel that this process represents a healing. I feel, however, that Norman should have his chest x-rayed again, probably at the end of the current school term in June, though I see no cause for alarm.” In July, 1948 the doctor wrote to the appellant himself, saying that there was no change, and adding that “If I were you, however, I would check this at least once every six months.” The evidence of the appellant himself was that he saw Dr. Langeluttig every six months from early 1947 to July, 1949. Each time the doctor found the condition inactive, prescribed nothing and indicated no manner of treatment. During all of this period, and at the time of his application, the appellant was employed by the Turner Construction Company of Philadelphia.

He “used a transit, a level in laying out the building, shooting grades and elevations, putting lines on footings, laying out of the building itself, and the partitions, and in general acting as a superintendent’s helper in supervising and seeing that the sub-contractors performed their work in accordance with the plans and specifications.” During this entire period, he felt “perfectly fine”, both off and on the job. His wife testified that she and the appellant were married in July, 1948, and between that time and July, 1949, when he applied for the policy, he never complained of any illness of any ⁴⁷⁰ kind. The appellant himself, asked why he answered the question concerned in this case as he did, said: “Well, in the first place I didn’t have any injury, I didn’t have any sickness, and the surgical operation is listed. Now, then, the ‘physical condition requiring a doctor’s care’, I had been to see the doctor.

He had made all these tests and he could find nothing wrong. As a matter of fact, I was only seeing him once every six months. It never even entered my mind when I was answering this question to think of an x-ray as being a doctor’s care or treatment. I never even gave it a thought.” Finally, a juror asked Dr. Langeluttig “whether there is any difference