Brotherhood of Railroad Trainmen v. Wood

• Court: Texas Court of Appeals
• Writing for the Court: Higgins
• Citation: Brotherhood of Railroad Trainmen v. Wood, 79 S.W.2d 665 (Tex. App. 1935)
• Decision Date: 17 January 1935
• Docket Number: No. 3116.,3116.
• Parties: BROTHERHOOD OF RAILROAD TRAINMEN v. WOOD.

Page 665

79 S.W.2d 665

BROTHERHOOD OF RAILROAD TRAINMEN v. WOOD.

No. 3116.

Court of Civil Appeals of Texas. El Paso.

January 17, 1935.

Rehearing Granted February 14, 1935.

Rehearing Denied February 28, 1935.

Appeal from District Court, Dallas County; Royall R. Watkins, Judge.

Action by Arthur W. Wood against the Brotherhood of Railroad Trainmen. Judgment for plaintiff, and defendant appeals.

Reversed and remanded.

See, also, 67 S.W.(2d) 636.

T. W. Davidson and Davidson, Randall & Gray, all of Dallas, for appellant.

C. F. Cusack, of Dallas, for appellee.

HIGGINS, Justice.

Upon an application dated June 28, 1927, the Brotherhood of Railroad Trainmen issued to the applicant, Arthur W. Wood, a class G certificate of insurance dated August 1, 1927, by the terms of which the brotherhood agreed to pay Wood $5,000 in the event of total and permanent disability as defined by section 68 of the constitution and general rules of the brotherhood.

Section 68 provided, among other matters, that one who shall suffer the complete and permanent loss of sight of one or both eyes should be considered totally and permanently disabled. On August 18, 1931, Wood made claim for total and permanent disability because of complete and permanent loss of sight of one eye. The claim was rejected, and this suit was filed by Wood to recover $5,000 upon the certificate as for total and permanent disability and to recover $147.40 beneficiary assessments upon his certificate paid after the month of the alleged loss of sight and which the brotherhood was obligated to refund under section 78 of its constitution and general rules if Wood had become totally and permanently disabled as alleged.

The certificate provides: "This certificate is issued upon the express condition that the said A. W. Wood shall comply with the Constitution, General Rules and Regulations, now in force or which may hereafter be adopted by the within named Brotherhood, which, as printed and published by the Grand Lodge of the said Brotherhood, with the application for this certificate as signed by him, and the medical examination of the said A. W. Wood, copies of which application and medical examination are attached hereto, all of which are made a part hereof, and together with this certificate constitute the contract between said A. W. Wood and said Brotherhood."

Photostatic copies of the application and medical examiner's report were attached to the certificate.

The first page of the application, form A, contains various questions propounded to the applicant and his answers thereto. Below appears:

"I hereby warrant the foregoing statements and answers to be true, full and complete.

        "[Signed] Arthur William Wood."
                

On another page of the application, form B, are certain questions to be propounded to the applicant by the medical examiner and the answers to such questions.

Following these questions and the answers thereto appears the following:

"Note Carefully the Following Declaration and Agreement.

"I, the undersigned applicant, hereby agree * * * that all the foregoing statements and answers to questions in Forms `A' and `B' I adopt as my own, admit to be material, warrant to be true, full and complete, and make the basis of the contract with said Brotherhood, and in the event any untrue or incomplete statements or answers have been made this contract shall be null and void and of no effect."

Below appears the signature of Wood and the medical examiner.

Among other defenses the brotherhood set up the falsity of the age of Wood as stated in the application and the falsity of other statements contained in the application.

The jury found:

(1) On June 28, 1927, at the time plaintiff signed the application for the certificate in question, he had never had any disease or injury to his eyes.

(2) On June 28, 1927, the acuity of his eyes had never been questioned.

(3) At the time the claim for disability was made by plaintiff on August 18, 1931, plaintiff had suffered a complete and permanent loss of sight of his right eye.

(4) The answer "No," written in response to the question: "Do you use alcoholic stimulants?" in the application dated and signed by plaintiff on June 28, 1927, was not false.

Question No. 5 was submitted conditionally and not answered because of the answer returned to Question No. 4.

(6) The year 1893, written in response to the question of the plaintiff's date of birth in his application June 28, 1927, was incorrect.

(7) The defendant knew the correct date of plaintiff's birth prior to August 18, 1931.

(8) The answer to question H in the application, "Have you ever had any illness or injury other than as stated above?" was not false.

The plaintiff filed motion for judgment notwithstanding findings 6 and 7 upon the ground that such findings were immaterial because the undisputed evidence showed that defendant had waived any right to forfeit because of the falsity of the statement of plaintiff's age as contained in the application. This motion was sustained and judgment rendered in favor of plaintiff as prayed.

On the first page of the application, form A, Wood stated his age to be 33 years 11 months, and July 19, 1893, as the date of his birth. On this same page and form appear question 4A: "Do you use alcoholic or other stimulants?" and question 4B: "If so, state definitely what kind, and the amount used daily or per week." Question 4A was answered "No," and no answer given to 4B.

On the second page, form B, to be filled in by the medical examiner are a number of questions inquiring whether he had ever been afflicted with certain diseases or injuries. Among the diseases thus specifically inquired about typhoid fever was not mentioned. Then follow questions 5H and 5I, as follows:

"H. Have you ever had any illness or injury other than as stated above?"

"I. Have you ever undergone any surgical operation? If so, state particulars."

Both of these questions were answered "No."

The evidence shows that Wood was born July 19, 1895; that in 1909 he was ill from typhoid fever; it was also shown that prior to the date of his application Wood had a slight injury to one hand. With reference to the use of alcoholic stimulants Wood testified, in substance, that he had always used same very moderately, but for three or four years prior to the trial (December, 1933) he had been a total abstainer.

Opinion.

Fraternal benefit societies as defined by article 4820, R. S., as amended by Acts 1931, c. 48, § 1 (Vernon's Ann. Civ. St. art. 4820), are exempt from the general insurance laws of the state. Article 4823. That appellant is a fraternal benefit society within the purview of the statute is not questioned by appellee.

According to the general rules governing insurance contracts, the falsity of a warranty defeats recovery upon such a contract without regard to the materiality of the warranty. 6 Tex. Jur. title Beneficial Associations, § 70; 12 Tex. Jur. title Insurance, § 183. Supreme Lodge, etc., v. Payne, 101 Tex. 449, 108 S. W. 1160, 15 L. R. A. (N. S.) 1277; Kansas M. L. I. Co. v. Pinson, 94 Tex. 553, 63 S. W. 531; Goddard v. Ins. Co., 67 Tex. 69, 71, 1 S. W. 906, 60 Am. Rep. 1; Hutchison v. Hartford L. & A. Ins. Co. (Tex. Civ. App.) 39 S. W. 325; W. O. W. v. Wernette (Tex. Civ. App.) 216 S. W. 669; Supreme Ruling, etc., v. Hansen (Tex. Civ. App.) 153 S. W. 351; Modern Woodmen, etc., v. Owens (Tex. Civ. App.) 130 S. W. 858; National, etc., v. Miller (Tex. Civ. App.) 43 S.W.(2d) 623.

Appellant invokes this rule, and asserts that the false statements in the application in the particulars indicated defeat recovery.

As to the misstatement of age, the evidence shows conclusively that shortly after the issuance of the certificate the appellant learned that the age of Wood and date of his birth had been incorrectly stated in the application. With such knowledge appellant continued to make assessments against appellee, collect and retain the same. Under numerous authorities this operated as a waiver of such ground of forfeiture and estops the appellant from avoiding the contract upon such ground. 6 Tex. Jur. p. 483, § 95.

The injury to appellee's hand was a slight cut some years before the contract between the parties, which it was necessary to stitch. The cut became slightly infected, and Wood was unable to work for about two weeks because of such infection.

Questions H and I are to be given a reasonable construction. A construction should not be placed thereon which would lead to an absurdity. We do not regard the trivial injury to plaintiff's hand and the stitching of the same as an injury or surgical operation within the intent and meaning of questions H and I. See Goddard v. Ins. Co., supra. For this reason we do not regard as false, in a proper sense, the negative answers returned to such questions.

But the answer to question H was false, for Wood had typhoid fever in 1909. Under the strict obligation imported by warranties in contracts of insurance, requiring the truth of statements warranted, such falsity precludes recovery under the authorities first above cited.

We are of the further opinion that Wood's own testimony shows such an habitual or customary use of alcoholic stimulants until three or four years before the trial as to render false the negative reply to question 4A, and this falsity also avoids the policy. Certainly, in the state of the evidence as to such use, it was incumbent upon him to answer question 4B, and his failure so to do rendered his statements with reference to the use of alcohol incomplete, thereby breaching the warranty that his statements and answers were full and complete.

We cannot agree with appellee that the statements made in the application are to be regarded as representations rather than warranties.

It is true the word "warrant" is not to be construed as necessarily creating a warranty in law. Reppond v. National L. I. Co., 100 Tex. 519, 101 S. W. 786, 11 L. R. A. (N. S.) 981, 15...