Mayes v. Massachusetts Mut. Life Ins. Co.
| Decision Date | 29 October 1980 |
| Docket Number | No. B-9153,B-9153 |
| Parties | Mattie Emmaline MAYES, Petitioner, v. MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, Respondent. |
| Court | Texas Supreme Court |
Taylor, Mizell, Price, Corrigan & Smith, Bradford D. Corrigan, Jr., Dallas, for petitioner.
Thompson & Knight, Eugene W. Brees and Jerry P. Jones, Dallas, for respondent.
Massachusetts Mutual Life Insurance Company brought this suit to rescind three policies of insurance on the life of Albert W. Mayes, deceased, because Mayes did not disclose to the insurer that certain answers in his applications which were correct when made had become false by the time the policies were delivered. Petitioner, who was the named beneficiary in the policies, counterclaimed for the proceeds of the policies together with penalty, interest and attorney's fees. The trial court rendered judgment for petitioner on the jury verdict. The court of civil appeals reversed the judgment of the trial court and remanded the cause with instructions to limit recovery to return of the premiums. 592 S.W.2d 393. We reverse the judgment of the court of civil appeals and remand the cause to that court for consideration of respondent's factual insufficiency point over which we have no jurisdiction.
On May 6, 1976, Albert Mayes signed and delivered to an agent of insurer Part 1 of two applications for life insurance. 1 These applications had been filled out by the agent and his secretary from information secured from a previous policy issued to Mayes through this agent. The applications are identical except for the amount of insurance requested by each application. On page three of each application is the following paragraph:
SIGNATURE SECTION ---- MUST BE COMPLETED IN ALL CASES
To the best of my (our) knowledge and belief, all answers and statements contained herein are full, complete and true and were correctly recorded before this application was signed; and it is agreed that: (a)if the first premium on the insurance herein applied for has been paid to the Company's agent in exchange for the Company's Conditional Receipt signed by said agent, the Company shall be liable only under and pursuant to the terms and conditions set forth in said receipt; (b)if the first premium on the insurance herein applied for has not been paid, the Company shall incur no liability under this application unless and until the application has been completed and approved and the policy has been issued and delivered to the owner designated therein and the first premium specified in the policy has been paid during the lifetime of each person proposed for insurance and then only if at the time of said delivery and payment all answers and statements contained in Parts 1 and 2 of this application and any amendments thereof and supplements thereto are then full, complete and true to the best of my (our) knowledge and belief as though given at the time of said delivery and payment; (c)no agent of the Company has authority to make, alter or modify the terms of this application or of any policy issued hereon or to waive any of the Company's rights or requirements or to extend the time for the payment of premiums, and (d)acceptance of any policy issued on this application will constitute ratification of any correction or amendment of the application made by the Company as shown in the Amendment of Application attached to the policy, provided, however, that any such correction or amendment of application relating to amount, classification, plan or additional benefits shall be agreed to in writing.
If this application is also signed by a purchaser, such purchaser ratifies the representations, declarations, statements, answers and agreements contained in Parts 1 and 2 of this application and any amendments of and supplements to this application, and agrees to be bound thereby.
Both applications required a physical examination of this forty-year-old prospect and the information relative to this examination is contained in Part 2 of the applications. Although Part 2 was filled out by Dr. Rattan, the insurer's medical examiner, it contains a number of answers to medical history questions propounded to the insured by the doctor on May 27, 1976 when the physical examination was had. Question 4 inquired as to whether the insured within the past five years: (A) had been treated by a physician; (B) had been treated or observed in a hospital; or (C) had undergone an electrocardiogram. Only question 4A was answered in the affirmative and the explanation given related only to a 1974 physical examination which Mayes had undergone in connection with a prior policy issued by Massachusetts Mutual. Questions 5A and 6A inquired if he had been treated for or had any known indication of any disorder of the heart or if he had experienced any pain, pressure or discomfort in the chest. Both of these questions were answered in the negative.
Part 2 of the applications were referred to the home office of insurer and, because the first examination showed an elevated blood pressure, the medical examiner was directed to make a recheck of the blood pressure. This reexamination was made by Dr. Rattan on July 14, 1976. At this time, the medical examiner determined, at the request of the insurer, that the proposed insured had not had any recent medical or dietary treatment for hypertension. The policies were issued to Mayes at a higher premium because of the elevated blood pressure. The policies were delivered to Mayes by the agent on August 17, 1976 after Mayes agreed to the higher premium.
On June 29, 1976, Mayes attempted to drink cold water while having a cup of coffee. He was unable to swallow the water and felt a pain in his chest. Mayes' next door neighbor, who was a general practitioner, was called; pursuant to this doctor's advice, Mayes went to the hospital so that Dr. Schilling, a specialist in internal medicine, might examine him. Mayes was kept in the hospital overnight by Dr. Schilling while a number of tests were made. Dr. Schilling was unable to arrive at a definite diagnosis, but concluded that the chest pain was probably the result of esophagitis, which is an inflammation of the esophagus. Dr. Schilling advised Mayes that he did not think Mayes had heart disease, but that he could not exclude that possibility. Mrs. Mayes testified she understood that the problem in Mayes' chest related to the esophagus.
Dr. Schilling next saw Mayes on July 28, 1976 at the doctor's office. Mayes complained of two more episodes of chest pain under circumstances similar to the initial episode. He was given a stress electrocardiogram to see if heart disease was involved. Again the doctor was unable to pin down the cause of the chest pain. Dr. Schilling advised Mayes of his high blood pressure and told him certain things to do to correct it. Mayes was advised that he was overweight and smoked too much. The doctor did not diagnose heart disease, but said again that he could not rule it out. He did not see Mayes again professionally. Mayes died suddenly on July 25, 1977 from a heart attack of some undetermined variety.
The verdict was substantially as follows:
No. 1. That the condition of Mayes' health changed between May 27, 1976 and the date the policies of insurance were delivered to him, August 17, 1976, to the extent that his answers to Questions 4A, 4B, 4C, 5A, and 6A became untrue.
No 2. That on the date the policies were delivered to him, Mayes knew that the condition of his health had changed to the extent that the answers to these questions had become untrue.
No. 3. That Mayes failed to disclose to Massachusetts Mutual that the condition of his health had changed after he applied for the policies to the extent that his answers to these questions had become untrue.
No. 4. That the failure of Mayes to disclose that the condition of his health had changed to the extent that the answers to these five questions became untrue WAS NOT for the purpose of inducing Massachusetts Mutual to issue the policies in question.
No. 5. That the answers as actually given by Mayes to these five questions were material.
No. 6. That Massachusetts Mutual relied on the answers actually given by Mayes to these questions when issuing the policies.
No. 7. A reasonable fee for services rendered by Mrs. Mayes' attorney in this case is $7,500.00.
The trial court overruled insurer's motion for judgment on the verdict or, in the alternative, judgment non obstante veredicto and rendered judgment on the verdict for the beneficiary, Mrs. Mayes. In doing so, the trial court apparently considered the insured's answers to the questions in Part 2 of the applications as representations. The trial court followed those authorities which hold that an insurer cannot avoid liability on the ground of misrepresentation by the insured unless there is a finding that the insured intended to procure issuance of the policy by representations known to be false. See Washington v. Reliable Life Ins. Co., 581 S.W.2d 153 (Tex.1979); ...
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