Bankers Union Life Insurance Company, a Corporation v. John Lyle Montgomery

John Lyle Montgomery, beneficiary under a policy of insurance on the life of his deceased wife, brought this action to recover death benefits. Defendant, Bankers Union Life Insurance Company, denied liability on the ground that several representations as to material facts on which it relied in issuing the policy were false. The suit was begun in the circuit court of Oregon for Multnomah County, and was removed to the federal district court because of diversity of citizenship.

The case was tried to a jury. The verdict, which was in the form of answers to special interrogatories, was favorable to plaintiff. Based thereon, judgment was entered for plaintiff in the sum of $30,-000, together with attorney’s fees in the amount of $5,000 and costs. Defendant appeals, questioning the sufficiency of the evidence to support the verdict, and the admissibility of certain evidence.

The policy was issued on October 27, 1954. The insured, Anna Grace Montgomery, died on January 20, 1956, as the result of an accident. On March 12, 1956, appellee submitted proof of death and demanded payment of the policy benefits. The company rejected the demand. It did so on the ground that it was entitled to…