American Nat. Ins. Co. v. Park

• Decision Date: 15 December 1932
• Docket Number: No. 7790.,7790.
• Citation: 55 S.W.2d 1088
• Parties: AMERICAN NAT. INS. CO. v. PARK.
• Court: Texas Court of Appeals

55 S.W.2d 1088

AMERICAN NAT. INS. CO. v. PARK.

No. 7790.

Court of Civil Appeals of Texas. Austin.

December 15, 1932.

Rehearing Overruled January 4, 1933.

Appeal from District Court, Travis County; J. D. Moore, Judge.

Suit by Mrs. Bessie Park against the American National Insurance Company, wherein defendant filed a cross-action. From the judgment, defendant appeals.

Affirmed in part, and in part reversed and remanded.

Frank S. Anderson, of Galveston, and Hart, Patterson & Hart and Hardy Hollers, all of Austin, for appellant.

Henry Brooks and Polk Shelton, both of Austin, for appellee.

BAUGH, J.

Appeal is from a judgment in favor of appellee for the principal amount of a policy, statutory penalty, and attorney's fee, on a life insurance policy for $1,500, issued by appellant to appellee's husband, Robert Fred Park, on December 18, 1928. The annual premium was paid in advance, and the insured died on September 2, 1929. Appellant declined payment on the ground that certain statements made by the insured in his application were false, and that he was not in good health at the time the policy was delivered; and by cross-action tendered the premium paid and sought a cancellation of the policy.

The application for the policy was made on December 10, 1928. The evidence shows that the insured could not read nor write. The agent of the appellant went to the insured's home in Austin, Tex., where he wrote in the answers to the questions on the application, and when he had completed same, appellee signed her husband's name to the application at the request of the agent, and without reading it. The answers particularly complained of as being false were to questions 5, 6, and 8, as follows:

5. "Do you use spirituous liquor, opium or any narcotic?"

To which was written by the agent the answer, "No."

6. "Are you now in good health so far as you know and believe?"

The answer written was, "Yes."

8. "From what illness or disease have you suffered during the past ten years?"

To which the agent wrote the answer, "None."

The uncontroverted evidence disclosed that in November, 1927, Dr. H. A. Scott had treated Fred Park about two weeks for a rattle snake bite, for which he had been using whisky; that he kept whisky in his home and took a drink occasionally, but did not use it to excess; that Dr. Scott again treated him at intervals from May 9, to September 3, 1928, for pellagra, at which latter date he discharged him as free from symptoms and apparently well. In 1929, Dr. C. H. Matthews treated the insured for pellagra from May 24th to August 24th, or or about which latter date he became insane from its ravages, was placed in the state hospital for the insane, where he died on September 2d.

Mrs. Park, appellee, testified that she was present in the room with her husband and the agent when the application was being filled out; that her husband told the agent of the rattle snake bite, his use of whisky, and his treatment by Dr. Scott for pellagra in 1928, and that he had been discharged as cured; that if false and improper answers appeared on the application, they were written there by the agent with knowledge of the facts as to insured's habits and health.

The jury found in response to special issues that Fred Park did tell the agent of these facts; that Mrs. Park did not know that the agent had written down untrue answers to these questions when she signed her husband's name to the application; that she did not discover such false answers prior to the death of Park; and that he was in good health both at the time of the application and at the time the policy was delivered.

The application contained provisions that the answers to said questions were warranted to be complete, correct, and true to the best of applicant's knowledge and belief; that such answers were to be the basis for the insurance contract, and the application was to be a part thereof; and that the contract should not be binding on the company unless insured be in good health when same was delivered.

Appellant contends that, notwithstanding that true answers were given the agent and false ones written down by him, because the insured had the means of discovering such fraud or neglect of the agent in writing them down, they being material to the risk, the company can avoid the policy because of the failure of the applicant to discover the misconduct of the agent, citing particularly Texas State Mut. Fire Ins. Co. v. Richbourg (Tex. Com. App.) 257 S. W. 1089, and Sovereign Camp W. O. W. v. Lillard (Tex. Civ. App.) 174 S. W. 619. These cases, however, do not apply here. The rule in this state in such cases is well stated in appellee's counter-proposition, as follows: "Where the insured in good faith makes truthful answers to the questions contained in the application, but his answers owing to the fraud, mistake or negligence of the agent in filling out the application are incorrectly transcribed, the company is estopped to assert their falsity as a defense to the policy, for the solicitor of the insurance is the agent of the company, and all statements of assured in the absence of fraud must be deemed representations and not warranties."

This rule is sustained by numerous authorities beginning with Equitable Life Ins. Co. v. Hazlewood, 75 Tex. 338, 12 S. W. 621, 7 L. R. A. 217, 16 Am. St. Rep. 893; see, also, Supreme Lodge v. Jones (Tex. Civ. App.) 143 S. W. 247, 249; Schumann v. Brownwood Mutual Life Ins. Ass'n (Tex. Com. App.) 286 S. W. 200; American Nat. Ins. Co. v. Bailey (Tex. Civ. App.) 3 S.W.(2d) 539; Inter-Ocean Casualty Co. v. Brown (Tex. Civ. App.) 31 S.W.(2d) 333; 14 R. C. L. 1174.

Appellant also contends that the evidence showed conclusively that insured was not in good health at the time the policy was delivered; that it therefore never became effective as a binding obligation on the company; and that the trial court should have instructed a verdict for the appellant.

It is not controverted that the condition of Park's health was the same at the time the policy was delivered as it was when the application was executed. The issue as to his health on the date of delivery of the policy was one of fact for the jury, and they found that it was good. In support of that finding the following evidence appears: Testimony of Mrs. Park that he was physically well, weighed 187 pounds, was eating and sleeping well, and doing his usual and customary labors, sawing stove wood and cutting and hauling posts for a living; that he had been treated for pellagra by Dr. Scott, but had been pronounced well by him. The testimony of Dr. Scott on cross-examination that he had in September, 1928, discharged Park, after treatments, as apparently well. There was also in evidence the company's instructions to agents enjoining upon them the duty of making inquiries as to the moral and financial risk involved, family history as to certain diseases, if applicant's weight be abnormal, and that the policy be not delivered if there be apparent change in the health of the applicant since application was made. The policy in question was issued...