Addendum:
Since writing the above, the opinion of Justice BLACK has been served. After commenting on the financial interest soliciting agents are apt to have that may cause them to yield to temptation to select or interpret facts in favor of processing an application, Justice BLACK concludes that because Agent Haney did not testify at the trial below plaintiff has not proved either constructive or actual fraud. This point was not raised in the appeal.
An examination of the pleadings and pretrial proceedings gives the answer as to why Agent Haney was not called as a witness.
Paragraph 4 of the bill of complaint alleged:
"In and by said application, the said Jeannine M. Cusick did state, represent, warrant and agree that she then had no indication of ill health present; that she had no indication then of physical impairment; that she had not consulted or been treated by a doctor or other practitioner or at dispensary or clinic within the 5 years immediately preceding the signing of said application; that she had not within the 10 years immediately preceding the signing of said application had any injury, illness or operation except for `Tonsillectomy Dec. 27, 1948 — Hospitalized 2 days — full recovery — no complication'; that she had never had cancer.
"Said application signed by Jeannine M. Cusick also contained the following:
"`I hereby declare that all statements and all the answers to the above questions are complete and true, and I agree that the foregoing, together with this declaration, shall constitute an application for insurance.'"
Defendant Dorothy Cusick (mother and beneficiary) did not in her answer to the bill of complaint question the allegations as to the questions that were asked and the answers that were given by her deceased daughter, but, to the contrary, answered paragraph 4 as follows:
"Answering the allegations of paragraph 4, defendant admits the same except to deny that the statements contained in said application constitute representations and/or warranties."
The pretrial hearing, before the same judge that presided at the trial, discloses that defendant did not challenge Agent Haney's conduct or in any way infer that the application failed to truly contain deceased's answers to the questions, but instead stated: "It is agreed that pretrial exhibit 1, the policy in question; and pretrial exhibit 2, the original application for the policy, may be introduced without further evidence."
Over 3 years after the insurance policy was issued defendant, by the following testimony, disclosed that she did not in any way doubt the integrity of Haney and still considered him as her "insurance man":
"Q. Now, Mrs. Cusick, I will show you a photostatic copy of the application for the life insurance policy in question, and ask you if you can identify Jeannine's signature on that application?
"A. I can, yes.
"Q. Do you see the date when that application was made, in the lower lefthand corner? "A. No; I can't see. I don't have my glasses.
"Q. I am sorry. Were you present at that time?
"A. I was in and out of the room as she was being interviewed by Mr. George Haney.
"Q. By Mr. George Haney?
"A. That's right.
"Q. He was the agent for the insurance company?
"A. That's right.
"Q. Do you know Mr. Haney?
"A. Oh, yes, he has collected at my house for quite a few years. He still does.
"Q. He is your insurance man?
"A. That's right. * * *
"Q. Now, did Jeannine at any time before this date, the date of the application, inform you that she was going to take out an insurance policy?
"A. No; it was my idea. I suggested it.
"Q. You suggested this policy to her?
"A. Yes, because just a short time previously her endowment had run out and I suggested that she take out more insurance.
"Q. With Prudential?
"A. With Prudential. That is where I had all my insurance."
The opinion of the trial court does not indicate in any manner that defendant or the court was denied proof necessary to a decision by the absence of Agent Haney's testimony; that the only issue the court had presented, and the issue that was decided, was whether the statements, as disclosed by the application, were made by the deceased with an intention to deceive or materially affect either the acceptance of the risk or the hazard assumed by the insurer.
Appellee did not consider the absence of Haney's testimony to be of importance in this appeal, and this is disclosed by the fact that appellee lists only 2 questions in her "Counterstatement of Questions Involved," namely:
"1. Do the answers made by deceased in the application for insurance entitle the insurer to judgment as a matter of law?"
"2. Are false answers relative to being in good health and being treated by doctors alone sufficient to bar recovery?"
The question presented to this Court for decision is not, under the record, inadequately submitted because of the lack of Agent Haney's testimony. To agree with Justice BLACK would be to inject an issue in this appeal not presented to this Court, nor considered of sufficient importance to be submitted by counsel at the trial of the case.
CARR, C.J., and DETHMERS, J., concurred with KELLY, J.
BLACK, J.
This Court said once, unanimously ( Hughes v. John Hancock Mutual Life Ins. Co., 351 Mich. 302, 310, 312):
"It is time to say with crisp and clear articulation that no matter what fine or large print an insurer of lives may choose to insert in its form of application, these cases of alleged medical fraud are to be considered and determined according to the same rules as are controlling in ordinary fraud cases. When it is shown that a participant — medic or not — in the obtaining or filling out of an application for life insurance is in fact an agent of the insurer, essential information shown as having been imparted to such agent will be imputed to the insurer according to rules given in Pitcher v. World Insurance Company, 327 Mich. 520; Turner v. Mutual Benefit H. A. Assn., 316 Mich. 6; Serbinoff v. Wolverine Mutual Motor Insurance Co., 242 Mich. 394; Hawkeye Casualty Co. v. Holcomb, 302 Mich. 591, and like cases. * * *
"We must bear in judicial mind that soliciting and medical agents of the insurer are apt to have a financial (commission or fee) and, hence, primary interest in more and more policy sales. The temptation to `select' or `interpret' (as in Pitcher and apparently here) fact disclosures in favor of processing of an application is present, whether indulged or not, and thus the unrepresented applicant is as much exposed to a possible record of half truth as is the prospective witness whose extrajudicial statement is exclusively and privately taken by a partisan of one side of the coming lawsuit."
The following record of reasons for remand is entered upon our scroll. It is based squarely on that fundamental tenet of equity; that a hearing de novo means exactly what the dictionary says, a hearing afresh, and that if, upon exercise of that "independent" judgment which in equity cases is due from us, it appears that the appellant burden-bearer has not sustained his burden, either affirmance or remand — for more proof — should be ordered. Fairness to both parties suggests the latter course; neither party having raised the question which to some of us stands forth from this record like Excalibur.
"This being an equity case we hear it de novo. Bankers Trust Company v. Bradfield, 324 Mich. 116. While we give due consideration to the findings of the trial judge, nonetheless it is our duty to weigh the evidence and reach an independent conclusion. Hawthorne v. Dunn, 210 Mich. 176, 179." Hitchman v. Township of Oakland, 329 Mich. 331, 335, 336. "The sections of Miss Jeannine Cusick show an active junctional nevus with inflammatory infiltrate beneath the nevus cells nests. In the center of the lesion, there is a papule covered with thin epidermis and filled with nevus cells in very disorganized arrangement and greatly varying in size and shape with hyperchromatic nuclei being fairly numerous, and also with numerous mitosis. The base line of this lesion is sharp and smooth and there is some inflammatory infiltrate beneath. Conclusions: Histologically this is malignant melanoma developing in a junction type nevus. One has the impression that the lesion has not yet become really invasive, but of course with melanomas, one always must be afraid of distant metastasis even before invasions. The lesion seems to have been removed completely."
As a sort of prologue, attention is drawn to the analogous case of Ruppe v. Steinbach, 48 Mich. 465. The appeal, from a chancery decree, was taken by the defendant burden-bearer of the sole issue. He did not take the stand in support of his allegations, yet knew the truth or falsity thereof more than did the actually sworn witness. Noting that "a different rule ought to and does prevail in a chancery cause," the Court disposed of the appeal exclusively on these grounds (pp 466, 468, 469):
"The evidence in some essential respects is very unsatisfactory indeed, and is singularly wanting upon some matters which we have a right to assume could have been placed beyond all controversy had the party upon whom the burthen of proof rested thought it worthy of his attention. Where evidence may fairly be presumed to be within the reach of a party and he does not introduce it, he must not complain if the court, in considering what is produced, does not find it as full and satisfactory as he supposed, or extend it by construction to meet a defence that might have been proven. * * *
"This is every word there is bearing upon the subject, and while we may concede that it tends to establish all that defendants claim for it, yet that is not the question here, as this Court is asked to reverse the decree of the court below, and that should not be done upon the mere tendency but upon the weight and satisfactory nature of the evidence. * * *
"We need not however pursue this matter farther. Had the case been one at law and a jury had under proper instructions found in favor of the defendant, the verdict possibly could not have been disturbed in this Court, but as already said a different rule ought to and does prevail in a chancery cause. The evidence introduced should be sufficiently strong and clear to fairly establish the several facts necessary to make out the case or defence relied upon. And while in many cases such evidence is not attainable, yet where it is within the reach and power of a party and he does not produce it, no intendment should be made in his favor."
There is nothing novel about this rule of unfavorable inference against a party who fails to call a knowledgeable witness controlled by him. See Cole v. Lake Shore M.S.R. Co., 81 Mich. 156, 161; Brandt v. C.F. Smith Co., 242 Mich. 217, 222; In re Petition of Upjohn, 256 Mich. 181, 183; Laughlin v. Michigan Motor Freight Lines, 276 Mich. 545, 550; Grigg v. Hanna, 283 Mich. 443, 459; Leeds v. Masha, 328 Mich. 137, 140; Barringer v. Arnold, 358 Mich. 594, 601.
Turning now to this typical case of alleged medical fraud: Whether the accuser-insurer relies upon a claim of "actual intent to deceive," or upon a "materially affected" risk or hazard, it must to obtain cancellation prove actual falsity of representation by the decedent. And no such charge is proven, in my view of the law of evidence at least, unless and until the accuser has assembled for judicial scrutiny all proof of its charge which is peculiarly within its own control. Here, such proof is inexplicably nonattendant. I refer to the absence from the witness stand of the agent (George F. Haney) who solicited this application and filled in the answers on the printed form; the form which by itself is said to prove that Miss Cusick actionably concealed from him material medical facts of which she — not her physician — had personal knowledge. In a word, neither the chancellor below nor this Court in turn has been informed, by the one person who could attest and should have been present for direct and then vigorous cross-examination, whether Miss Cusick did or did not actually disclose to him what his principal alleges was fraudulently concealed. Consequently, and since everything said of the respective legal roles of applicant and agent, both in the Hughes Case and in Pitcher v. World Ins. Co. of Omaha, 327 Mich. 520, applies here with equal force, I am quite unable to find that the plaintiff so far has proved — preponderantly — actual or constructive fraud on the part of this deceased applicant.
It was shown definitely that plaintiff Prudential's court-absent agent had collected premiums regularly at the Cusick home; that he knew Miss Cusick prior to the time of application and the apparent condition of her health at such time; that he certified to his principal that Miss Cusick's "health, character, habits and home surroundings" were such that he recommended "the Company's acceptance of the risk," and that he as in Pitcher and Hughes filled out the allegedly misrepresentative application from questions and answers passing between himself and Miss Cusick. What were those oral answers? Did they or did they not disclose all that this apparently healthy young lady knew then about her past medical history? Plaintiff could but did not supply such answers, yet asks that we pronounce the young lady guilty of concealment without having proved actual concealment by the best and available evidence thereof.
How, in foregoing circumstances, may this Court ascertain (see Pitcher and Hughes, both supra) whether Agent Haney, manifestly commission-interested in a sale, did or did not "select" or "interpret" for written answer what Miss Cusick did in fact tell him? The burden-bearer supplies no clew, and I own candidly to suspicion of its case when, unlike the plaintiff in Manufacturers Life Ins. Co. v. Beardsley, 365 Mich. 308, it has chosen not to swear its knowledgeable and available agent in support of the charge it makes against a deceased person who may in fact be innocent of concealment.
Mr. Justice KELLY, however, quoting and relying upon General American Life Ins. Co. v. Wojciechowski, 314 Mich. 275, finds de novo that the chancellor erred in finding an absence of actionable fraud. As is true on too many occasions, the General American Case is employed by my Brother in a factual setting where it simply does not fit. In that case the Court found affirmatively (not so in this case, below or here):
"In the preparation of an opinion, the facts of the case are in mind. It is prepared with reference to such facts, and when considered in connection therewith, will generally be found satisfactory. When, however, an attempt is made to pick out particular parts or sentences, and apply them indiscriminately in other cases, nothing but confusion and disaster will be likely to follow. In other words, the opinion and decision of a court must be read and examined as a whole in the light of the facts upon which it was based. They are the foundation of the entire structure which cannot with safety be used without reference to them." MARSTON, J., writing for the Court in Larzelere v. Starkweather, 38 Mich. 96, 101.
"The statement by Mr. Wojciechowski that he had not received any medical or surgical advice or attention within the 5 years preceding making his application for issuance of the policy was false and intended to deceive, was the concealment of a material fact, the falsity of which was known to him." (p 281.)
Further, the defendant beneficiary made no affirmative showing that Mr. Wojciechowski's intentionally false answers were filled in by an agent of the insurer; whereas the exact contrary was shown here. Finally, although the applicant had answered that he had not "received any medical or surgical advice or attention within the last 5 years," it was shown without dispute that, during such 5-year period, he had consulted 1 testifying doctor no less than 64 times, with respect to which he (the testifying doctor) "had rendered medical or surgical advice or attention." Really, Brothers, the 2 cases are a bit different.
Note, now, the reason for our refusal to apply the General American Case to Bendford v. National Life Accident Ins. Co., 356 Mich. 52, 60:
"Defendant then cites General American Life Insurance Co. v. Wojciechowski, 314 Mich. 275, and cases therein cited for the proposition that `false answers relative to being in good health and being treated by doctors bear a direct relation to acceptance of the risk' and that, therefore, defendant is entitled to judgment as to matter of law. With this we do not agree under the facts in this case. We refer particularly to the facts attending the making of the application, plaintiff's decedent having signed it but defendant's agent apparently having inserted the answers."
All this may explain my reason for refusal to identify the General American Case with the one at bar. There the Court found an intent to defraud. Here Justice KELLY is quite unwilling to go that far, yet is willing to find that this deceased young lady was guilty of "constructive" fraud, even though plaintiff did not prove, as well it might have if such were the truth, that she answered dishonestly some questions the unsworn Mr. Haney had put to her. For my part, courts should in these circumstances repeat their insistence that fraud charged against a decedent must be proved, convincingly according to the rule of rote judges declare and redeclare in fraud cases.
Justice KELLY says that the factor of absence of Mr. Haney from the witness stand was not raised or considered below, and that appellee's counsel makes no point of it here. Granted, and what of it, even though counsel may snore steadily at the table assigned to them? Courts of equity — trial and appellate — are supposedly and exclusively governed by principles of equity, aided but not controlled by the presentations of counsel. Their chancellors are directed to concern themselves with the equitable rights of the assembled parties; not the granitic grooves of the law. They are required, as I understand equity jurisprudence, to enter or uphold that decree which in conscience is right upon the whole record, no matter what points of law or fact counsel may stress, and the sooner that truism is judicially understood, the sooner will the beneficience of equity blossom fully as it should. For elaboration, see Spoon-Shacket Company, Inc., v. Oakland County, 356 Mich. 151. There, as here, our membership was divided by the same rock in the jurisprudential stream which separated Blackstone's view of equity from that of Pomeroy. See quotations in the Spoon-Shacket Case (pp 157-164), including that which was penned by Judge Parker in Bowen v. Hockley (CCA 4), 71 F.2d 781 (94 ALR 856).
This is not a law case we examine for reversible error. Upon oath we are sworn to determine it independently, all over again on the original record. We sit, supposedly, as 8 chancellors required to judge the asserted right of one charging fraud to the relief it seeks. We are called upon to grant or deny relief according to the equity of the case without any restriction occasioned by the act or omission of counsel. At least that is the way we should proceed, and doubtless will in future equity cases when some other counsel has neglected to raise an evidentiary question this Court should raise, on its own, for the sake of the equity of the case and the preservation of equity jurisprudence.
Even in law cases, also in the instance of review of administrative decisions, "The general rule that a question may not be raised for the first time on appeal to this Court is not inflexible." (CARR, J., writing for the unanimous Court in Dation v. Ford Motor Co., 314 Mich. 152, 160 [19 NCCA NS 158]). Justice CARR proceeded (pp 160, 161):
"When consideration of a claim sought to be raised is necessary to a proper determination of a case, such rule will not be applied. Thus in Thomas v. Morton Salt Co., 258 Mich. 231, it was held that the question of estoppel to deny the constitutionality of a statute, was properly subject to consideration by this Court in order to avoid conflict with a prior decision, although the question had not been raised in the circuit court. See, also, Auditor General v. Bolt, 147 Mich. 283; Mitchell v. Reolds Farms Co., 255 Mich. 240; Meek v. Wilson, 283 Mich. 679."
The Thomas Case, cited by Justice CARR, was a suit at law for damages. This Court raised a question of estoppel against the plaintiff-appellee and thus defeated his cause against the defendant corporation. The Bolt and Meek Cases, likewise cited, were suits in equity. It seems permissible, even at law as always in equity, that decisive questions be raised on high. The difference is that the practice is extremely rare at law; whereas in equity it is necessary on due occasion lest the Court enter an unconscionable decree.
Conclusion: In this equity case the plaintiff, bearing always that burden of persuasion, has accused a deceased person of fraud. It failed to sustain such burden below and — as I hold — has failed so far to sustain that burden here. Mr. Haney, readily available as we must assume, knows what information the forever stilled voice of Miss Cusick imparted to him when he filled out the application for her signature. He was the company's agent ( Pitcher, supra, at 523 and Hughes, supra at 310); yet the company chose not to offer his testimony or to explain its choice. Such is not the way to prove fraud on the part of one who has passed beyond. Instead, an inference of concealment is left; concealment of that which came to revelation both in Pitcher and Hughes, and no court of equity should decree reversal in favor of any like plaintiff or defendant whose affirmative case or defense is so "singularly wanting" ( Ruppe, supra, 466) of decisive proof available to but withheld by such party. Rather, our decree as to form should be that of the old Scotch verdict, "Not proven M'Lord," so far at least.
When all is said the crucial facts known to Miss Cusick are that she had a mole on the lower part of her back; that Dr. Wikiera excised the mole, in his office, in 15 minutes; that she, then and thereafter in the apparent vigor of youthful good health, continued to work in the doctor's office, and that some months later she was stricken with that swiftly developing and inevitably fatal disease we know as brain cancer. It is asking too much that we additionally find, from no proof at all, that Miss Cusick failed to advise Mr. Haney of such office operation and failed to refer him to Dr. Wikiera; also that Mr. Haney, assuming as I think we should that Miss Cusick did so advise and refer, would have written the disclosed fact into the application. The inference left by his absence is that he "interpreted" such advices as being unimportant and so left same out of the "give full details" space of the application.
Mr. Haney should be sworn to dispel such inference before this court of equity proceeds further. I would therefore continue the cause under section 1 of former Court Rule No 72 (1945), now GCR 1963, 820, for the taking of the complete testimony of Mr. Haney; also that of Miss Cusick's mother, she according to the record having been present part of the time when Mr. Haney was engaged in questioning Miss Cusick and in filling out the application. Following the taking of such testimony and its transcription, the record thereof with supplemental opinion of the trial chancellor should be forwarded here for final consideration and entry of such decree as may accord with the just rights of the parties.
KAVANAGH, SOURIS, and OTIS M. SMITH, JJ., concurred with BLACK, J.
O'HARA, J., took no part in the decision of this case.