Terry v. Texas Prudential Ins. Co.

• Decision Date: 20 December 1934
• Docket Number: No. 3149.,3149.
• Citation: 77 S.W.2d 761
• Parties: TERRY et ux. v. TEXAS PRUDENTIAL INS. CO.
• Court: Texas Court of Appeals

Page 761

77 S.W.2d 761

TERRY et ux. v. TEXAS PRUDENTIAL INS. CO.

No. 3149.

Court of Civil Appeals of Texas. El Paso.

December 20, 1934.

Rehearing Denied January 10, 1935.

Appeal from County Court at Law, El Paso County; John M. Worrell, Judge.

Suit by Stephen A. Terry and wife against the Texas Prudential Insurance Company. From an adverse judgment, plaintiffs appeal.

Reversed and rendered.

Leo L. Heisel, of El Paso, for appellants.

Turney, Burges, Culwell & Pollard, and J. F. Hulse, all of El Paso, for appellee.

HIGGINS, Justice.

Statement of Case.

This is a suit by Mrs. Terry and husband against the appellee, a Texas corporation, upon an insurance policy in the sum of $648, dated July 13, 1931, insuring the life of Mary Virginia Terry, in which policy Mrs. Terry, the mother of the assured, was named as beneficiary. The policy was issued without medical examination.

The court made findings as follows:

"That on or about the 30th day of June, 1931, one M. L. Dilts, Superintendent of The Texas Prudential Insurance Company at El Paso, Texas, and V. C. Horine, an agent of said Company, called at the residence of the assured, Mary Virginia Terry, in El Paso, Texas, and solicited the said Mary Virginia Terry and her parents, Sarah Pearl Terry and Stephen A. Terry, for an application for life insurance in said company, for the said Mary Virginia Terry. That upon such occasion the said Sarah Pearl Terry and Stephen A. Terry stated to the said agents of said company that Mary Virginia Terry was not insurable, in that she had been suffering with what is known as leakage of the heart, for some five years. That thereupon the said agents stated to the said Sarah Pearl Terry, Stephen A. Terry, and Mary Virginia Terry, that the said Mary Virginia Terry looked to be in good health, and looked insurable, and that they believed that the company would issue a special policy upon the life of the said Mary Virginia Terry, and stated that they would take the matter up with the company officials, in an effort to secure such insurance upon the life of the said Mary Virginia Terry.

"That thereafter, on or about the 2nd day of July, 1931, the said V. C. Horine, agent of said Company, returned to the home of the plaintiffs, Sarah Pearl Terry and Stephen A. Terry, and informed them that the matter had been taken up with the officials of The Texas Prudential Insurance Company, and that said officers had informed said agents that they could write a policy of insurance upon the life of the said Mary Virginia Terry, without a medical examination. That it would be a sub-standard policy for a small amount, and would require a higher rate of premium than an ordinary life policy.

"Thereupon, the said V. C. Horine produced a blank form of application for insurance, and stated to the plaintiffs, in the presence of the said Mary Virginia Terry, that he would fill in the necessary blanks, if they would give him the required information.

"That the plaintiffs thereupon again informed the said Horine that the said Mary Virginia had been suffering with leakage of the heart for a period of five years.

"That when said agents first called upon the plaintiffs with reference to said insurance, the plaintiffs advised said agents that the said Mary Virginia had improved in health during the last two years, and that there was great hopes for her recovery, and this statement was again made upon the second visit of Horine, on July 2nd, 1931.

"That the said Horine pretended to fill out the blanks in said application with the proper information furnished him by the said plaintiffs and the said Mary Virginia, but instead, he concealed said statements, and in response to the question if proposed had ever suffered from heart disease, among other things, he wrote the answer `No,' and in response to the question as to when the insured was last sick, he wrote the answer `December and January 1930-31. Cold.' That after said application had been so wrongfully filled in by the said Horine, said agent Horine handed the application to the said Mary Virginia Terry for her signature, at which time the plaintiff, Sarah Pearl Terry, took the application from the said V. C. Horine for the purpose of reading the same. Whereupon, the said Horine informed the said Sarah Pearl Terry, Stephen A. Terry and Mary Virginia Terry that it was unnecessary for them to read the application, that he had included in said form the required information in order to secure the insurance of a sub-standard policy of insurance, such as could be issued upon the life of the said Mary Virginia Terry, and that they could not understand it since they had had no experience in the matter of filling out applications for insurance. And thereupon the said Mary Virginia Terry signed said application at the point indicated, without either reading it, or without the said Sarah Pearl Terry or Stephen A. Terry having read it. That immediately over the signature of Mary Virginia Terry written by herself, is the following:

"`I hereby apply for insurance for the amount named, and I declare that the answers to the above questions are complete and true, and were written opposite the respective questions by me, or strictly in accordance with my directions. I agree that said answers, with this declaration, shall form the basis of a contract of insurance between me and the Texas Prudential Insurance Company of Galveston, Texas, and that the policy which may be granted by the Company in pursuance of this application, shall be accepted subject to the conditions and agreements contained in such policy. I further agree that no obligation shall exist against said company on account of this application, although I may have paid premiums thereon unless said company shall issue a policy in pursuance thereof, and the same is delivered to me while I am in perfect health, free from injury and disease, and after the premium has been paid by me.'

"That the plaintiffs herein, and the said Mary Virginia Terry relied upon the statements thereupon made to them by the said Horine, and as a result of such statements, they did not read the said application, and the answers as written therein by the said Horine.

"That there was no attempt on the part of the plaintiffs herein, or of the said Mary Virginia Terry, to conceal the true condition of the said Mary Virginia, but they made a full statement of her condition to both the said Horine and the said Dilts, prior to the signing of said application. And further, that neither of the plaintiffs in this case, nor the said Mary Virginia Terry, knew at the time of the signing of said application by the said Mary Virginia Terry that the said application did not contain the facts as given by them to the said agents of said company. Nor did they know of such misstatements in their said application, until after the policy had been delivered to them as herein stated, and until after premiums had been paid thereon.

"That on or about the 13th day of July, 1931, the defendant insurance company issued its policy No. 840228 upon the life of the said Mary Virginia Terry, which policy named Sarah Pearl Terry, mother of the assured, as beneficiary.

"Said policy was delivered to the plaintiffs herein on or about the 15th day of July, 1931, and said policy was accepted by the plaintiffs without being read by the plaintiffs or the said Mary Virginia Terry."

Other findings are to effect following: The assured died August 24, 1931, of angina pectoris, also known as leakage of the heart. Copy of the application was not attached to the policy. The policy contained these provisions:

"This policy and application is entire agreement between the company, the insured, and the holder and owner hereof, and is incontestable after two years from date of issue except for non-payment of premium. Its terms cannot be changed or its condition varied, except by a written agreement signed by the President, a Vice-President or a Secretary of the Company. Therefore, Agents (which term includes Inspectors, Superintendents, Assistant Superintendents and Cashiers) are not authorized to make, alter or discharge contracts, or waive forfeitures. This policy shall be void if assigned or otherwise parted with, or if any erasures or alterations be made herein, except by endorsement signed by the President, a Vice-President or a Secretary.

"All statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties. This policy is void and of no effect and all premiums paid shall be forfeited to the Company in event of any of the following, to-wit: (1) If the Insured dies before the date hereof, or before the date of actual delivery to and acceptance by the Insured of this Policy, and the first payment due after issue hereof is made, or if on said date of delivery and acceptance, the insured be not in perfect health and free from injury or infirmities;"

"The said Mary Virginia Terry, insured and her parents Sarah Pearl Terry and Stephen A. Terry, plaintiffs at the time of solicitation on or about the 30th day of June, 1931, informed M. L. Dilts, superintendent and V. C. Horine, agent that their said daughter had been under the care of Dr. Thomas C. Liddell, a practicing physician of El Paso, Texas, and again on or about the second day of July, 1931, informed V. C. Horine of the fact that the said insured had been attended by the said Dr. Thomas C. Liddell."

The policy was delivered to the assured by the agent Horine on July 15, 1934.

"The insured, Mary Virginia Terry, at the time of her death had no notice or knowledge of the misstatements contained in said application, and that the representations of the said V. C. Horine, with reference to said application were in fact false; that the plaintiffs were not informed of such misstatements and had no knowledge of such false representations until more than six months after the death of Mary Virginia Terry, the insured."

The...