Washington Nat. Ins. Co. v. Bryant

Decision Date03 May 1938
Docket Number28125.
Citation80 P.2d 239,183 Okla. 90,1938 OK 312
PartiesWASHINGTON NAT. INS. CO. v. BRYANT.
CourtOklahoma Supreme Court

Rehearing Denied June 14, 1938.

Syllabus by the Court.

1. The general rule in industrial insurance policies containing a facility of payment clause authorizing insurer to make payment to any relative or connection of insured, or to any one equitably entitled to payment by reason of expenditures in behalf of insured, is that insurer has an option as to whom payment will be made. However, where insured designates a certain individual as beneficiary, such person is a proper party to maintain an action to enforce the obligations of the policy, notwithstanding insurer's option.

2. False representations render insurance contract voidable provided they are material and relied on by insurer, but representations as to things not susceptible of present actual knowledge amount only to statements of opinion or belief, and as to such representations insured's good faith furnishes criterion of truth.

3. When any such statements in insured's application are shown to be untrue, it is for the jury to determine whether made willfully, falsely, and in bad faith with intent to deceive the insurer.

4. Statement in application for insurance that applicant is in good health is an expression of opinion and will not avoid contract if made in good faith without knowledge of latent disease that may actually exist.

Appeal from Court of Common Pleas, Tulsa County; Bert E. Johnson Judge.

Action to recover proceeds of industrial insurance policy by Curlie Bryant against the Washington National Insurance Company. From a judgment for the plaintiff, the defendant appeals.

Affirmed and rendered.

Harper & Boesche, of Tulsa, for plaintiff in error.

Amos T Hall, of Tulsa, for defendant in error.

CORN Justice.

This action was originally brought in the common pleas court of Tulsa county by the defendant in error against the plaintiff in error, an Illinois corporation, to recover upon a policy of industrial insurance issued to James Marshall, who died June 28, 1936. The case was tried on plaintiff's second amended petition and resulted in a verdict and judgment for plaintiff for $522, costs and interest from November 9, 1936, until paid. Hereafter we will refer to the parties as in the trial court.

Defendant issued the policy December 23, 1935, in which plaintiff was named beneficiary, and it appeared that she paid the expenses of insured's last illness. Defendant admitted the policy was in force, but claimed deceased was not in "sound health" when the policy was issued, tendered back the premiums paid, and asked to rescind the contract.

Defendant further alleged the policy was obtained by fraud and misrepresentation of deceased in stating, in his application, that he had no physical defects; he had fully recovered from an operation; neither of his parents had died of any pulmonary disease. Whereas, defendant contended deceased had not recovered from the operation; his mother had died of tuberculosis, and he was suffering therefrom at date of application, all of which was known to deceased but denied by him with the intent to deceive the defendant. Defendant further alleged deceased to have misstated his age as 20, when in fact he was nearly 22, hence any amount due under the policy could not exceed $504. Further, that plaintiff participated in procurement of policy by fraud, knowing the true facts, and is thereby estopped to claim the proceeds.

At the close of the evidence, special interrogatories were submitted to the jury, and defendant asked judgment on these special findings, notwithstanding the verdict, which request was refused. Defendant assigns twelve specifications of error which are presented under three propositions. The first of these is directed toward showing the plaintiff is not a proper party and the petition does not state a cause of action against the defendant.

The defendant argues the policy definitely provides for payment to the administrator or executor of the insured, unless payment was made under the "facility of payment" clause common to this type of policy, which provided:

"The Company may make any payments or grant any nonforfeiture privilege provided herein to the Insured, husband or wife, or any relative by blood or connection by marriage of the insured, or to any other person appearing to said Company to be equitably entitled to the same by reason of having incurred expense on behalf of the Insured, or for his or her burial; and the production of a receipt signed by anyone of said persons, or of other proof of such payment or grant of such privilege to any of them, shall be conclusive evidence that all claims under this policy have been satisfied."

In the application for this policy the deceased named the plaintiff, his aunt, as beneficiary and her name appears as such on the policy itself. As to the deceased's right to designate her as his beneficiary, there can be no doubt.

This character of insurance has for its object, mainly, to provide for the expense of the last sickness and provide a decent burial. 31 C.J. 966, § 1; Wallace v. Prudential Ins. Co. of America, 174 Mo.App. 110, 157 S.W. 1028. In 31 C.J. 969, § 7, it is said that such clauses are inserted in this type of policy for several purposes: (1) To afford a ready method of raising money for insured's benefit; (2) to enable money to be paid speedily after insured's death, without expense and delay of taking out administration. Such clauses are upheld by the courts and are regarded by them with favor, and within certain limits confer upon the insurer an option as to whom payment will be made.

The defendant cites Washington Fidelity Nat. Ins. Co. v. Heard, 148 Okl. 294, 298 P. 622, and attempts to distinguish the case from the case at bar. The Heard Case, supra, held the defendant liable to a beneficiary whose name had been indorsed upon the policy subsequent to issuance of the policy, on the grounds the indorsement controlled any conflicting provision in the printed form.

The authorities touching this proposition are collected and discussed in Williard v. Prudential Ins. Co. of America, 276 Pa. 427, 120 A. 461, 28 A.L.R. 1350. Examination of the cases therein cited discloses the salient point to be that such clauses are for the benefit of the insurer, and that a third party whom the insurer might have elected to pay has no right to compel the insurer to make payment to him.

But, as was similarly announced in the Heard Case, supra, these authorities are not controlling, since the policy itself reveals the clear intention of the parties to have been the designation of Curlie Bryant as beneficiary under the policy. There exists no ground for saying a beneficiary in a case such as this has no right to bring an action to collect upon the policy merely because the insurer might choose to exercise the option granted to it by this type of policy.

Further, there can be no merit to the defendant's contention because, under the terms of the clause in question, the defendant could make payment to anyone it deemed equitably entitled thereto. Having made payment, the defendant had only to show a receipt for same and be entirely absolved from any further liability.

To sustain the defendant's contention would only serve to destroy the real reason for such provisions in this type of insurance contract. Under numerous decisions of this court, a provision in a policy of insurance is to be construed most strongly in favor of the insured. There being no substantial...

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