Great Am. Reserve Ins. Co. v. Britton, A--10815

• Citation: 406 S.W.2d 901
• Decision Date: 27 July 1966
• Docket Number: No. A--10815,A--10815
• Parties: GREAT AMERICAN RESERVE INSURANCE COMPANY, Petitioner, v. Kathleen E. BRITTON, Respondent.
• Court: Supreme Court of Texas

Page 901

406 S.W.2d 901

GREAT AMERICAN RESERVE INSURANCE COMPANY, Petitioner, v. Kathleen E. BRITTON, Respondent.

No. A--10815.

Supreme Court of Texas.

July 27, 1966.

Rehearing Denied Nov. 2, 1966.

Brundidge, Fountain, Elliott & Churchill, Roger A. Hansen, with above firm, Dallas, for petitioner.

Howard S. Smith, Sulphur Springs, Woodrow H. Edwards, Mount Vernon, for respondent.

CALVERT, Chief Justice.

Suit was by Great American Reserve Insurance Company to cancel a non-medical life insurance policy issued on the life of Paul D. Britton. Cancellation was sought on the ground that the insured was not in good health when the application for insurance was made or when the policy was delivered and because the insured had fraudulently given false answers to certain questions in the application. A cross-action was filed by Kathleen E. Britton, surviving widow of the insured and the beneficiary named in the policy. By her cross-action Mrs. Britton sought to recover the policy proceeds, a statutory penalty of 12% And reasonable attorney fees in the sum of $4,000.00. The case was tried to a jury and judgment was rendered on the jury's verdict awarding Mrs. Britton the relief she sought in full. The Court of Civil Appeals affirmed. 389 S.W.2d 320. We affirm in part and in part reverse and remand.

The issue in the courts below concerning answers given by the insured to questions in the application for insurance has gone out of the case at this stage of the appeal, and will not be considered. The issue concerning the good health of the insured is the same whether related to the time of making of application or to the time of delivery of the policy and will be dealt with only as it relates to the time of delivery of the policy.

The insurance policy contains a provision that '* * * the policy shall not take effect until it has been delivered to its owner during the lifetime and good health of the Insured * * *.' Application for insurance was made by Britton on September 5, 1961, and the policy was executed and delivered on September 13, 1961. Britton died on February 6, 1963.

The pertinent special issue submitted in the trial judge's charge to the jury and the answer thereto read as follows:

'Do you find from a preponderance of the evidence that Paul D. Britton was not in good health on the date of delivery of the policy in question?

'Answer 'He was not in good health' or 'He was in good health,' as you may find.

ANSWER: He was in good health.'

The issue properly placed the burden of proof on Great American, whether the case be considered from its standpoint in seeking to cancel the policy or from the standpoint of Mrs. Britton in seeking a recovery of the policy proceeds. Trevino v. American National Ins. Co., 140 Tex. 500, 168 S.W.2d 656 (1943).

There is much discussion in the opinion of the Court of Civil Appeals and in the briefs of the parties as to whether the jury's answer to the issue has support in evidence of probative force. That is not the question. It would avail Great American nothing to set aside the jury's answer to the issue: it still would not have discharged its burden of obtaining a finding from a preponderance of the evidence that Britton Was not ¹ in good health, a finding essential to its right to cancel and to its defense to the cross-action if the issue is one of fact. See 38 T.L.R. 359, 363 (1960). There is also much discussion in the opinion of the Court of Civil Appeals and in the briefs as to the relative weight to be given to lay testimony of the apparent good health of Britton and a medical diagnosis, made sometime prior to the date of delivery of the policy, that he was afflicted with a disease or bodily infirmity known as angina pectoris. That is not the ultimate issue in the case. Medical diagnoses and lay testimony may have an important bearing, or even controlling effect, on the issue of 'good health' under the particular circumstances of a given case, but the true question to be decided in cases of this type in which the insurer fails to obtain a favorable jury finding is whether the evidence establishes conclusively, according to recognized legal standards, that the insured was not in good health. This question was properly raised by Great American's motion for instructed verdict at the conclusion of the evidence and was properly preserved by its first point of error in the Court of Civil Appeals. With the issue before us thus brought into proper focus, we proceed to its decision.

There is considerable lay testimony in the record indicating that the insured appeared to be in good health when the policy was delivered. The evidence is set out in detail in the opinion of the Court of Civil Appeals. We need not notice this testimony further as it does not control decision of the issue as we have stated it.

The evidence which Great American asserts establishes as a matter of law that Britton was not in good health consists of the deposition testimony of Dr. John S. Bagwell; a hospital record of a medical history and diagnosis made by Dr. C. D. McMillan; testimony of Dr. Lester Hodges, Britton's family physician; and Britton's death certificate.

Dr. Bagwell examined Britton on May 1, 1959, some two years and four months before the policy was delivered. Britton went to see Dr. Bagwell because he was having a tremendous amount of gas pressure and pains in his chest. In May, 1962, Dr. Hodges recommended that Britton see Dr. McMillan because 'he was having difficulty with his stomach, and he was burning and (had) symptoms of an ulcer.' Britton was hospitalized by Dr. McMillan from May 15 to May 18, 1962, three years after the examination by Dr. Bagwell and some eight months after the insurance policy was delivered.

Britton gave both doctors a history of chest pain which radiated into his arms. Dr. Bagwell was convinced by the history given him, a physical examination which was 'considered To not show any definite abnormality,' x-rays which were 'considered To be normal,' and an electrocardiogram showing features 'considered to be Probably abnormal' that Britton had 'heart trouble' which he diagnosed as 'angina pectoris, Probably due to arteriosclerosis,' and for which he prescribed nitroglycerin tablets for relief of pain. Dr. McMillan concluded from the history given him, a physical examination which 'failed to disclose any Significant abnormality,' and tests which revealed 'changes Consistent with left ventricular hypertrophy' and 'positive changes Indicative of coronary sclerosis' that Britton had a duodenal ulcer of recent origin, chronic gastritis and 'Coronary insufficiency.'

Britton was found dead in his bed in the morning of February 6, 1963. The death certificate, signed by Dr. Hodges, gave the immediate cause of death as 'myocardial infarction.'

Great American does not contend that Britton had the duodenal ulcer, found by Dr. McMillan, when the policy was delivered, or that chronic gastritis would avoid the policy. We narrow our attention, therefore, to the evidence relating to Britton's heart condition.

An insurance policy requirement that an applicant for insurance be in 'good health' does not mean 'perfect health.' If it did, all policies could be canceled within the contestable period. It is for this reason that the courts have evolved certain standards for measuring 'good health.' The term is usually defined as a state of health free from any disease or bodily infirmity of a Substantial nature which affects the general soundness and healthfulness of the system Seriously or Materially increases the risk to be assumed by the insurer. See Sovereign Camp, W.O.W. v. Derrick, Tex.Civ.App., 64 S.W.2d 982, 983 (1933), writ refused; Vann v. National Life & Accident Ins. Co., Tex.Com.App., 24 S.W.2d 347, 349 (1930); Southern Surety Co. v. Benton, Tex.Com.App., 280 S.W. 551 (1926); Hines v. Kansas City Life Ins. Co., Tex.Civ.App., 260 S.W. 688, 690 (1924), writ dism.; National Life & Accident Co. v. Moses, Tex.Civ.App., 257 S.W. 289 (1923), no writ hist.; Couch on Insurance, sec. 885a. We have also held that a good health provision is breached if the applicant 'is suffering from a Serious kind of illness, Which continues and eventually causes his death.' Texas Prudential Ins. Co. v. Dillard, 158 Tex. 15, 307 S.W.2d 242, 247 (1957). The conclusiveness of Great American's proof that Britton was not in good health must be tested by these standards.

Although Dr. Bagwell's testimony is highly equivocal at best, for opinion purposes we may treat the testimony as establishing conclusively that Britton had 'heart trouble,' which Dr. Bagwell diagnosed as 'angina pectoris' but which Dr. McMillan diagnosed as 'coronary insufficiency.' We are next met with this question: How Seriously did the 'heart trouble,' 'angina pectoris,' or 'coronary insufficiency' affect the general soundness and healthfulness of Britton's system generally, and how Materially did they increase the risk of Great American? These are matters about which expert medical witnesses would be competent to testify, but the only competent evidence having any bearing on the question which we may consider is testimony of Dr. Hodges that angina 'is a continuing type of disease.' The result is that to hold the good health provision of the policy was breached as a matter of law we would have to take judicial notice that the nature of one or more of the ailments was such as to Seriously affect the soundness of Britton's health or to Materially increase Great American's risk. These are relative matters, and except in extreme cases should be left for jury determination from evidence introduced on trial.

'Heart trouble' is a broad term and no doubt encompasses more than one type of specific ailment. 'Angina pectoris' is defined by Webster's Third New International Dictionary as 'a disease characterized by paroxysmal attacks of substernal pain of short duration that is usu. associated with a sense of apprehension or fear...