168 S.W.2d 656 (Tex.Com.App. 1943), 1923-7982, Trevino v. American Nat. Ins. Co.

Docket Nº:1923-7982
Citation:168 S.W.2d 656, 140 Tex. 500
Opinion Judge:SMEDLEY, Commissioner.
Party Name:TREVINO v. AMERICAN NAT. INS. CO.
Attorney:[140 Tex. 501] Walter Hein and Guy Cater, both of San Antonio, for plaintiff in error. Maxwell Burkett, of San Antonio, for defendant in error.
Case Date:February 03, 1943
Court:Court of Commission of Appeals of Texas
 
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Page 656

168 S.W.2d 656 (Tex.Com.App. 1943)

140 Tex. 500

TREVINO

v.

AMERICAN NAT. INS. CO.

No. 1923-7982

Court of Commission of Appeals of Texas, Section B.

February 3, 1943

         Rehearing Denied March 3, 1943

         Error to Court of Civil Appeals of Fourth Supreme Judicial District.

         Action on a life policy by Anita Trevino against the American National Insurance Company. From a judgment in favor of the defendant, the plaintiff appealed to the Court of Civil Appeals. To review a judgment of the Court of Civil Appeals, 159 S.W.2d 202, affirming the trial court's judgment, the plaintiff brings error.

         Judgments of the trial court and Court of Civil Appeals reversed, and judgment rendered for plaintiff, and cause remanded to the trial court for trial of issue as to reasonable attorney's fees.

Page 658

         [140 Tex. 501] Walter Hein and Guy Cater, both of San Antonio, for plaintiff in error.

         Maxwell Burkett, of San Antonio, for defendant in error.

         SMEDLEY, Commissioner.

         Petitioner, Anita Trevino, beneficiary in a policy insuring the life of her brother, sued respondent, American National Life Insurance Company, insurer, for the face value of the policy, for twelve per cent. thereof as damages and for reasonable attorney's fees. Upon a verdict favorable to respondent, judgment was rendered by the trial court that petitioner take [140 Tex. 502] nothing by her suit, which judgment was affirmed by the Court of Civil Appeals. 159 S.W.2d 202. The amount in controversy is less than $1000.00 but jurisdiction was taken by this Court because the case involves the construction of a statute.

         The policy, which is dated March 21, 1938, contains the following provision: "Provided, however, that no obligation is assumed by the Company prior to the date hereof nor unless on said date the Insured is alive and in sound health." The incontestable clause of the policy in compliance with Section 3, of Article 4732, Revised Civil Statutes of 1925, is: "After a period of two years from the date borne by this Policy, it shall not be contested on any ground affecting its original validity."

         The jury found in answer to special issues that the insured was in ill health when the policy was issued and that the insurer, its agents and representatives, did not know that the insured was then in ill health. The third special issue relating to the reasonable amount of attorney's fees was not answered.

         The insured died April 27, 1938. The suit on the policy was filed July 29, 1938. Respondent, on August 15, 1938, filed its original answer consisting of a general demurrer and a general denial. On February 15, 1941, more than two years after the date of the policy, respondent filed its first amended original answer, in which it alleged that the policy was void and unenforceable because the insured was in ill health when the policy was issued and because the insured fraudulently represented that he was not suffering from any illness or disease.

         The controlling question is whether the insurer within two years from the date borne by the policy contested the policy "on any ground affecting its original validity." The Court of Civil Appeals held that the general denial filed within the two-year period constituted such contest within the meaning of the incontestable clause contained in the policy. The writ of error was granted on account of that ruling.

         The language of the incontestable clause and of the statute (Sec. 3, Art. 4732) in the use of the words "contested" and "incontestable" contemplates and intends to require the institution within the specified period of a proceeding in court to cancel the policy on account of original invalidity or the filing, [140 Tex. 503] within that period in a suit brought on the policy, of an answer setting up a ground of original invalidity to defeat recovery. American Nat. Ins. Co. v. Welsh, Tex.Com.App., 22 S.W.2d 1063, Tex.Civ.App., 3 S.W.2d 946; Southern Surety Co. v. Benton, Tex.Com.App., 280 S.W. 551; Humpston v. State Mutual Life Assur. Co. 148 Tenn. 439, 256 S.W. 438, 31 A.L.R. 78; Mutual Reserve Fund Life Ass'n v. Austin, 1 Cir., 142 F. 398, 73 C.C.A. 498, 6 L.R.A.,N.S., 1064.

         The general denial filed by respondent within the two-year period was not, in our opinion, a contest within the meaning of the incontestable clause. Respondent did not thereby plead ill health of the insured or fraudulent representations by him as a ground of invalidity or as a defense to recovery, on the policy. The original answer in most general terms denied the averments of the petition and contained no allegations attacking the policy on account of original invalidity. The petition alleged the execution and delivery of the policy.

Page 659

         Upon its face the policy was valid. "Until contested by the company, it had such force as upon its face it purported to have." Mutual Reserve Fund Life Ass'n v. Austin, 1 Cir., 142 F. 398, 401, 73 C.C.A. 498, 6 L.R.A.,N.S., 1064, 1067.

         The plaintiff suing on the policy is not required either to plead or to prove that he was in sound health when the policy was issued or that he made no false representations as to his health. Ill health of the insured and fraudulent representations by him as to the condition of his health are extrinsic facts, matters of defense, upon which the insurer may rely in contesting the policy that evidences its liability. It has the burden of alleging and proving...

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