Blue Bonnet Life Ins. Co. v. Reynolds

• Decision Date: 11 April 1941
• Docket Number: No. 2127.,2127.
• Citation: 150 S.W.2d 372
• Parties: BLUE BONNET LIFE INS. CO. v. REYNOLDS.
• Court: Texas Court of Appeals

Page 372

150 S.W.2d 372

BLUE BONNET LIFE INS. CO. v. REYNOLDS.

No. 2127.

Court of Civil Appeals of Texas. Eastland.

April 11, 1941.

Rehearing Denied May 2, 1941.

Appeal from District Court, Eastland County; B. W. Patterson, Judge.

Action on a life policy by Della Reynolds against Blue Bonnet Life Insurance Company. From a judgment for the plaintiff, defendant appeals.

Affirmed.

Cofer & Cofer, of Austin, for appellant.

J. M. Parker, of Gorman, for appellee.

GRISSOM, Justice.

Della Reynolds instituted this suit against Blue Bonnet Life Insurance Company upon a policy issued by said company to her deceased husband, W. E. Reynolds, in which she was named as beneficiary. The judgment was for the plaintiff for $1,000 and defendant has appealed.

Plaintiff alleged in substance that on June 6, 1932, defendant "in consideration of the payment by W. E. Reynolds to it of the required premium, assessment, or first payment, and of the further sum of $1.50 to be paid each month during the life of W. E. Reynolds", executed and delivered to W. E. Reynolds its policy of insurance, whereby it insured the life of said W. E. Reynolds in the sum of $1,000 for the benefit of plaintiff, as shown by the policy, alleged to be copied in the petition. The petition then set forth a portion of the policy issued by Home Benevolent Society in the amount of $1,000, stating the assessment basis to be $1.50 per month, and reciting that in consideration of the application of W. E. Reynolds "and conditions herein which are understood and agreed to be a part of this contract, agree to pay to Della Reynolds (wife) as beneficiary, * * * within ninety days after receipt * * * of satisfactory proof of the death of the insured $1,000 * * * Subject to the rules, regulations and conditions hereinafter set out." There followed provisions relative to old age disability benefits and accident benefits which are not relevant. The policy then contained the following provisions:

"This certificate together with the application, by-laws, endorsements, and attached papers, if any, approved by an executive officer, constitutes the entire contract.

"Failure to make prompt payments of all assessments, at the Companies office under the rules as set forth in the application and by-laws hereof shall void this certificate. * * *

"This certificate becomes effective upon delivery only and while the member is in sound health and not before."

Relative to assessments, the policy provided that the Board of Directors should levy an assessment of $1.50 each month during the life of the member. It recited that the policy was issued "upon an application heretofore filed in the office of this society and is subject to the provisions set forth on the reverse side hereof, which forms a part of this contract as fully as recited over the signatures hereto affixed, and said application and the by laws of this society are a part of this contract." The policy further provided that it should be incontestable from date of issuance, except for fraud or nonpayment of assessments. The petition alleged that W. E. Reynolds died February 6, 1940, and at the time of his death all of the assessments due on the policy had been paid; that Reynolds had in all respects complied with the conditions and provisions of the policy; that within the required time after his death, to-wit, about February 6, 1940, the plaintiff gave defendant notice and proof of the death of W. E. Reynolds, and demanded payment of the sum of $1,000; that payment had not been made; that the Home Benevolent Society had, in 1934, duly changed its name to Blue Bonnet Life Insurance Company.

The defendant answered, among other things, that it was a state wide mutual assessment insurance company, incorporated under a pre-existing law in Texas, and was so operating prior to January first, 1933, and, generally, that it had complied with the laws relative to such a company and is now operating under Art. 4859f, Vernon's Ann. Civ.St. Defendant denied that the entire contract of insurance was set out in the petition and alleged that among the general provisions constituting a part of the contract were the following: "9. All claims under this certificate shall be submitted in writing within a reasonable time. If the insured shall within one year of the date of reinstatement after lapse thereof, die of any form of the following diseases: heart disease, kidney trouble, tuberculosis, cancer, high blood pressure, or a complication thereof, * * * then the society shall be liable for the payment of only one-fourth of the amount provided for herein, and one-half the principal sum should death occur during the second certificate year from any of the above causes."

The defendant further alleged that on October 5, 1939, deceased owed a monthly premium and assessment in the sum of $1.50 and failed to pay it and that the policy lapsed on October 6, 1939. That on October 18, 1939 deceased executed an application for reinstatement on a blank furnished by the defendant in which application there was the following recital: "Blue Bonnet Life Insurance Company, San Antonio, Texas I herewith re-affirm the truth of all answers and statements contained in my original application; and warrant that I am at this time in good health, and am not afflicted with or suffering from any disease, chronic or otherwise."

That fifteen days prior to October 5, 1939, defendant sent deceased notice of the premium or assessment due October 5. The defendant alleged that in the reinstatement application deceased warranted that on October 18, 1939, "he was in good health and not afflicted with any chronic diseases or otherwise." That said "representations and warranties" were false and material to the acceptance of the risk "by which" deceased was reinstated; that deceased was then suffering from heart disease, to-wit, chronic myocarditis; that deceased then knew he was suffering from said disease, and his false representations rendered the reinstatement void and defendant was not indebted on said contract of insurance in any amount.

Defendant alleged, in the alternative, that if deceased was not then suffering from heart trouble, that heart trouble was the cause, or contributing cause, of his death on February 6, 1940; that insured's death occurred within one year from the reinstatement of the policy and under its provisions the defendant, at most, was not liable for more than one-fourth of the face of the policy; that within sixty days of the death of insured, defendant refused to approve the claim on the ground that according to the sworn statement of the attending physician the cause of insured's death was influenza and chronic myocarditis; that defendant at said time offered to pay one-fourth of the policy.

Defendant's first proposition is to the effect that the evidence is insufficient to support the judgment because plaintiff failed to introduce the entire contract of insurance. Specifically, it is contended that under the provisions of the policy and section 10 of Art. 4859f, the by-laws were a part of the insurance contract and plaintiff can not recover without introducing the by-laws in evidence and that the introduction of the policy without introduction of the by-laws was insufficient to sustain the judgment.

The policy was issued in 1932. The application, if any, was not attached to the policy. The provisions of the by-laws, if any, that might be applicable or pertinent are not shown. The defendant relies upon the opinion in Wann v. Metropolitan Life Ins. Co., Tex.Com.App., 41 S.W.2d 50, 52. That and the instant case are clearly distinguishable upon the facts. In the Wann case "a policy was issued and delivered to the employer containing the terms and conditions under which the insurance was to be effective. The insurance company then issued its certificates to the various employees intended to be covered by the group policy, which evidenced their right to...