American Life & Accident Ins. Co. v. Walton

• Decision Date: 11 March 1918
• Docket Number: (No. 221.)
• Citation: 202 S.W. 20
• Court: Arkansas Supreme Court
• Parties: AMERICAN LIFE & ACCIDENT INS. CO. et al. v. WALTON.

202 S.W. 20

AMERICAN LIFE & ACCIDENT INS. CO. et al. v. WALTON.

(No. 221.)

Supreme Court of Arkansas.

March 11, 1918.

Appeal from Circuit Court, Pulaski County; G. W. Hendricks, Judge.

Suit by Ernest N. Walton against the American Life & Accident Insurance Company and others. Judgment for plaintiff, and defendants appeal. Affirmed.

D. K. Hawthorne, of Little Rock, for appellants. McCulloch & Jackson, of Little Rock, for appellee.

SMITH, J.

The American Life & Accident Insurance Company, hereinafter referred to as the company, issued an accident indemnity policy on September 15, 1915, to E. N. Walton, hereinafter referred to as the plaintiff. On October 10, 1915, plaintiff was returning from a boat landing on the Mississippi river to his home in Arkansas City, and, in order to cross a railroad track, which ran parallel to the levee upon which plaintiff was walking at the time, he jumped from the levee onto a stationary flat car loaded with logs, a distance of 4 or 5 feet, but, on account of the wet and slippery condition of the logs, plaintiff slipped and fell to the ground, a distance of 12 feet. As a result of his fall plaintiff sustained very serious injuries, the physical, visible evidence of which consisted of a sprained wrist and a swelling in the abdomen. There was immediate pain in the stomach, accompanied by nausea. Immediately following his accident plaintiff worked a few hours at night, but was unable to perform a regular day's work. Plaintiff was an electrician, and continued to do some work at night for a week or 10 days, but was forced to quit work on account of the increasing pain in his stomach, since which time he was unable to do any regular work until the 21st of February, 1916, when, as a result of the accident aforesaid, he was operated on for what is known as mobile cæcum; this being an operation to attach to the abdomen the lower bowel, which had become loosened from its regular place by reason of the accident. The operation was apparently successful, although the plaintiff was left in a weakened and run-down condition, and he testified that even up to the time of the trial he had not been restored to his normal condition. Plaintiff was taken to the hospital on January 3, 1916, where he remained until the 24th of March, and after being taken home he was confined to his bed for 6 days and to his home 14 days.

The company denied any liability under the policy, and this suit was brought to recover, upon the theory that a total disability had been sustained, during the time for which a recovery was asked, and judgment for penalty and attorney's fees was also prayed.

The application for the policy contained the statement that the plaintiff was in sound and healthy condition, and that he had never been ruptured; when, according to his own admission on the witness stand, he had had chills with the accompanying fever, and he had been ruptured when a child, and had been operated on for it in 1903, and in 1906 he had had performed a preventive operation for rupture on the opposite side. These operations were completely successful. Plaintiff also testified that in 1911 he had been thrown from a horse, from which he sustained an acute attack of indigestion, and prior to that time he had been struck on the head by a pole as he was getting off a street car, for which accident he was treated by a physician, and in 1911 he had an X-ray examination made of his head. It was also shown that as a boy he had broken his wrist.

However, prior to the taking out of the policy sued on plaintiff had recovered from these mishaps, and none of them apparently contributed in any manner to the trouble which sent him to the hospital. Plaintiff's trouble was first diagnosed as appendicitis, and he was operated on for that disease on January 4, 1916; but this operation did not relieve the pain, and a second operation for mobile cæcum was performed on February 21st. This operation, as stated, gave comparative relief, and started plaintiff on the road to recovery. The surgeon testified that the mobile cæcum was congenital, and that the plaintiff did not know of its existence, and that its existence might never have been made known but for such an accident as plaintiff sustained, although its presence made the plaintiff peculiarly susceptible to an injury from such an accident.

The company now denies liability under the policy upon the ground that the statements set out above in the application were false, and that in the application these answers were warranted to be complete and true and material and binding on him, whether written by himself or by the agent of the company. These answers were not copied into the policy, nor was the application, or a copy thereof, attached thereto. Neither did the policy in express terms make the application a part of the contract. Ordinarily, the policy constitutes the contract, and, while the application may be made a part of the contract, such is not the case, unless the policy makes it so. When the application is not made a part of the contract, the statements there contained, even though they are there designated as warranties, are treated as mere representations made to induce the issuance of a contract of insurance. The cases on the subject state the rule to be that statements contained in the application will not be construed to be warranties if such statements may be reasonably construed to be mere representations. We think an application which is not expressly made a part of the contract of insurance is open to that construction. A leading case on the subject is that of Spence v. Central Accident Ins. Co., 236 Ill. 444, 86 N. E. 104, 19 L. R. A. (N. S.) 88. In that case it was said:

"A warranty being a part of the contract itself as contradistinguished from a representation, which is a mere inducement to the contract, must necessarily appear in the contract itself. In Mutual Benefit Life Ins. Co. v. Robertson, 59 Ill. 123, this court, on page 126 , said: `A warranty is in the nature of a condition precedent. It must appear on the face of the policy or if on another part of it or on a paper physically attached, it must appear that the statements were intended to form a part of the policy, or if on another paper, they must be so referred to in the policy as clearly to indicate that the parties intended them to form a part of it. A warranty cannot be created nor extended by construction' — citing Reynolds on Life Insurance, 85 et seq.; Campbell v. New England Ins. Co., 98 Mass. 381; Burritt v. Saratoga Ins. Co., 5 Hill (N. Y.) 188 ; Jefferson Ins. Co. v. Cotheal, 7 Wend. 72 . Defendant in error contends that the application in this case is a part of the policy. The only language in the policy that makes any reference to the application is found in the first sentence of the policy, where it is recited: `In consideration of the warranties and agreements in the application for this policy and of $25 does hereby insure Robert Spence, of Chicago, state of Illinois, by occupation a collector publishing house,' etc. It will be observed that the reference here to the application does not expressly make it a part of the policy; nor does such effect necessarily follow by a fair construction of the language, even if a warranty could thus be imported into the contract. The doctrine of warranty, in the law of insurance, is one of great rigor and frequently operates very harshly upon the assured, and courts will never construe a statement as a warranty unless the language of the policy is so clear as to preclude any other construction. As was said by Justice Gray in McClain v. Providence Savings Life Ass'n, 110 Fed. 80 : "The practical operation of such literal warranties is so often harsh and unfair that courts require their existence to be evidenced clearly and unequivocally, and are not inclined to allow it to rest upon a mere verbal interpretation where a reasonable construction of a contract as a whole will authorize a different meaning. All reasonable doubts as to whether statements inserted in or referred...