Arkansas State Life Insurance Company v. Allen

• Decision Date: 08 December 1924
• Docket Number: 34
• Citation: 266 S.W. 449,166 Ark. 490
• Parties: ARKANSAS STATE LIFE INSURANCE COMPANY v. ALLEN
• Court: Arkansas Supreme Court

266 S.W. 449

166 Ark. 490

ARKANSAS STATE LIFE INSURANCE COMPANY v. ALLEN

No. 34

Supreme Court of Arkansas

December 8, 1924

Appeal from Prairie Circuit Court, Southern District; George W Clark, Judge; affirmed.

Judgment affirmed.

Arthur D. Chavis, for appellant.

The policy sued on is void because of false representations made in the application. The application and policy, forming one transaction, are read together with the by-laws as the entire contract. The falsity of the insured's answer to the question whether she had been treated within two years by a physician is established beyond doubt. 105 Ark. 101; 72 Ark 620; 84 Ark. 57; 89 Ark. 368; Id. 378; 103 Ark. 404; 52 Ark. 11; 53 Ark. 215; Id. 494; 65 Ark. 581; 71 Ark. 298; 58 Ark. 528; 72 Ark. 620. There was clearly a question of fact for the jury in this case, and the court erred in directing the verdict. 301 Ark. 201; 65 Ark. 581. Also the court erred in refusing permission to introduce in evidence the conditions in the by-laws, and to introduce the company's ledger.

Cooper Thweatt, for appellee.

1. The evidence is undisputed that neither the insured nor the beneficiary had any knowledge that the statement that the insured had not been treated by a physician within two years appeared in the application. It is also undisputed that the agent alone had this knowledge. The company is estopped to plead a breach of the warranty. 113 Ark. 174, 184; 81 Ark 508; 111 Ark. 435; 129 Ark. 450; 147 Ark. 563; 71 Ark. 295. Treating the question and answer as a warranty, it was not intended to embrace treatment by a physician for trivial ailments, but only such as might affect the risk to be assumed. 58 Ark. 528; 89 Ark. 230; 71 Ark. 295; 65 Ark. 588. There is no evidence of collusion between the agent and the appellee; but, if there was any fraud, it was that of the agent, who was acting within the scope of his authority. 113 Ark. 174. And the company is bound by his knowledge. 129 Ark. 450.

2. The company's ledger was properly excluded, because it did not plead its financial condition, nor even suggest it in its answer, and, since there was no written amendment, and none permitted to be filed, such evidence would have been irrelevant. 24 Ark. 375; 57 Ark. 512; 33 Ark. 307. It is not disclosed in the record what the contents of the ledger were, that it was sought to prove. There is nothing therefore for the court to review. 97 Ark. 564; 101 Ark. 555; 123 Ark. 548. It was within the court's discretion to refuse leave to amend. 68 Ark. 374; 88 Ark. 181; 60 Ark. 526; 104 Ark. 276.

3. The document purporting to be the constitution and by-laws of the company, when offered without identification and no evidence whatever of authenticity, was quite properly excluded. It could not have been prejudicial to exclude it, since the very paragraphs sought to be introduced were set out in the policy. 95 Ark. 443; 105 Ark. 230; 87 Ark. 52.

OPINION

WOOD, J.

On the 23rd of December, 1922, Arkansas State Life Insurance Company, hereafter called appellant, issued its certificate, or policy of insurance, on the life of Angelene Allen. Austin Allen, her husband, was named as the beneficiary in the policy. The appellant was engaged in the life insurance business on the assessment or mutual plan. It is specified in the policy that the application and the constitution and by-laws shall be the basis, and form a part of, this contract.

The insured died on the 20th of March, 1923. The value of her policy at the time of her death, if valid, was $ 235. She paid one quarterly premium of $ 5.30. The appellee instituted this action against the appellant and its bondsmen setting up the policy and the amount due thereunder, the payment of the premium, the death of the assured, notice to the company of the death, demand of payment, and prayed judgment in the sum of $ 235.30, and for attorney's fee of $ 75 and 12 per cent. penalty.

The appellant, in its answer, denied the material allegations of the complaint except as to the issuance of the policy and filing of the bond, and set up by way of affirmative defense that there was a breach of warranty as to the condition of the health of the insured at the date of the policy, in that the statements of the insured in the application on which the policy was issued were false and fraudulent, by which all rights under the policy were forfeited.

The appellant also, in response to the motion to make its answer more definite, alleged that the assured stated in her application for insurance that she had not been treated or advised by a physician during the past two years, and that the plaintiff stated in his claim for death benefit, and swore to same, that the assured died with la grippe.

The appellee denied that there were any misrepresentations.

The cause was tried before a jury, and, after the evidence was adduced, the appellee prayed the court to instruct the jury to return a verdict in its favor, which prayer the court granted over appellant's objection and exception. From a judgment rendered on the verdict in favor of the appellee is this appeal.

1. We will consider the assignments of error in the order presented by counsel for the appellant. It is stated in the application, which was made December 23, 1922, and signed by the assured, as follows: "I have not been treated or advised by a physician in the past two years, except * * * no, my family physician is doctor." The application contains the following provision: "I understand and agree that each of the foregoing statements are warranties; that I made them to induce the issuance of a policy of insurance for which I made this application, and to that end I warrant them to be true." There is also a statement in the application to the effect that the insured made the application subject to all the conditions and agreements in the policy; that the application is a part of the policy.

Dr. Odom testified that he was called to see Angelene Allen in 1921; that she had a slight case of influenza or la grippe, with some fever; that it was a temporary attack, and her general health was not affected. He also stated in the proof of death that he thought the sickness for which he treated the insured the year before had no connection with the cause of her death.

The appellee testified that, when the agent took the application, he asked witness if his wife was well, and witness told him that she was. The agent had never seen the insured in his life, and did not ask the witness whether his wife had been treated by a physician in the past two years. The witness answered all questions truthfully, which the agent asked him, and the agent wrote the answers down. This testimony of the appellee was corroborated by another witness, and there is no testimony to the contrary in the record.

It is the doctrine of this court that an insurance company is bound by the contract of its soliciting agent acting within the apparent scope of his authority. Any knowledge or information given to him during the course of his employment will bind his principal, the society, and it will be estopped from denying that which its own agent had asserted to be true. Mutual Aid Union v. Blacknall, 129 Ark. 450 at 450-55, 196 S.W. 792, and cases there cited. Maloney v. Maryland Cas. Co., 113 Ark. 174, 167 S.W. 845.

It is not alleged by appellant in its answer that there was any collusion on the part of the appellee and appellant's soliciting agent to defraud the appellant. The soliciting agent was acting within the scope of his authority in writing the answers and taking the application, and there is no proof whatever that any fraud was perpetrated upon him by the appellee.

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