American Nat. Ins. Co. v. Welsh

• Citation: 3 S.W.2d 946
• Decision Date: 23 February 1928
• Docket Number: (No. 625.)
• Parties: AMERICAN NAT. INS. CO. v. WELSH et al.
• Court: Court of Appeals of Texas

3 S.W.2d 946

AMERICAN NAT. INS. CO. v. WELSH et al.

(No. 625.)

Court of Civil Appeals of Texas. Waco.

February 23, 1928.

Rehearing Denied March 22, 1928.

Appeal from Dallas County Court; Wm. M. Cramer, Judge.

Suit by James Adolph Welsh and others against the American National Insurance Company. Judgment for plaintiffs, and defendant appeals. Affirmed.

Pinkney Grissom and Thompson, Knight, Baker & Harris, all of Dallas, for appellant.

Cockrell, McBride, O'Donnell & Hamilton, of Dallas, for appellees.

BARCUS, J.

On March 24, 1924, appellant issued a policy of insurance on the life of Katherine Welsh for the sum of $500. Among other provisions, it contained the following:

"Provided, however, that no obligation is assumed unless on the date hereof the assured is alive and in sound health."

And the further provisions:

"Subject to correction of age as above provided, and provided premiums have been duly paid, this policy shall be incontestable for the amount due after having been in force two years during the lifetime of the assured."

All premiums were paid to January 25, 1925. The insured, Katherine Welsh, died on August 13, 1924. Proof of death was promptly filed and appellant refused to pay the policy, denying liability thereon, and within ninety days after the death of the insured, which was well within the two-year period from the date of the policy, tendered to the beneficiaries all premiums which had been paid thereon. On May 4, 1926, appellees, as beneficiaries under said policy, brought this suit to recover the face thereof, with the statutory penalty and attorney's fees. On January 22, 1927, appellant filed its original answer and denied liability on the ground that at the time of the issuance of the policy it did not take effect because the insured was not in sound health, for the reason that at said time she was suffering with tuberculosis, being in an advanced stage of said disease, from which she had been suffering for several years and from which she died. The trial court sustained special exceptions and struck out said defense, on the theory that appellant had waived same by having failed to bring a suit within two years after the issuance of the policy to cancel the same, holding, in effect, that under the two-year incontestable clause contained in article 4732 of the Revised Statutes 1925, appellant waived all defenses except for failure to pay the premiums, and that, in order for appellant to defeat recovery for any other reason, it was necessary for it to file a contest seeking a cancellation of the policy within said two-year period. The incontestable clause in the policy sued on differs in some respects from the one required by article 4732 of the Revised Statutes 1925. Our Supreme Court, however, has held that an insurance company cannot place a more onerous incontestable clause in a policy than the one provided by the statutes. American National Insurance Co. v. Tabor, 111 Tex. 155, 230 S. W. 397.

Appellant contends that the death of the insured within the contestable period fixed the rights and liabilities of the parties, and that, since the insured died within the period of two years, it stopped the running of limitation, and that it was not necessary for it to bring a proceeding in court in order to make a contest. Appellant further contends that its refusal to pay the claim within the...