Clark v. National Life & Accident Ins. Co.

• Decision Date: 19 March 1947
• Docket Number: No. A-1118.,A-1118.
• Citation: 200 S.W.2d 820
• Parties: CLARK v. NATIONAL LIFE & ACCIDENT INS. CO.
• Court: Texas Supreme Court

200 S.W.2d 820

CLARK v. NATIONAL LIFE & ACCIDENT INS. CO.

No. A-1118.

Supreme Court of Texas.

March 19, 1947.

Rehearing Denied April 16, 1947.

Error to Court of Civil Appeals of Fifth Supreme Judicial District.

Action by the National Life & Accident Insurance Company against Charles J. Clark to cancel a life policy because of fraudulent representations, wherein defendant filed cross-action for face value of the policy. A judgment for defendant was reversed by the Court of Civil Appeals, 197 S.W.2d 869, and defendant brings error.

Judgment of Court of Civil Appeals reversed and judgment of trial court affirmed.

George K. Holland, of Dallas, for petitioner.

William M. Bates, of Dallas, for respondent.

SHARP, Justice.

This suit was brought by The National Life & Accident Insurance Company against Charles J. Clark, beneficiary in a policy of life insurance issued to Aaron J. Clark, to cancel the policy because of fraudulent representations made by the insured in his application for the policy. The defendant filed a cross-action for the face value of the policy. Based upon a jury verdict, the trial court entered judgment for defendant for the face value of the policy and for penalty, interest, and attorney's fees. The Court of Civil Appeals reversed the judgment of the trial court, on the ground that the policy never came into existence because of the alleged fraudulent representations made by the insured, and rendered judgment for the insurance company. 197 S.W.2d 869.

Petitioner contends that the Court of Civil Appeals erred: (1) in holding that the evidence presented no controverted issue of fact; (2) in disregarding the facts found by the jury and the trial court, and in substituting its own contrary fact findings; (3) in holding that respondent did not waive and abandon the issues of fraud by failing to request the trial court to submit those issues to the jury; (4) in holding that the policy never became effective as an insurance contract; and (5) in reversing the judgment of the trial court and rendering judgment in favor of respondent. Respondent, on the other hand, contends that the judgment of the Court of Civil Appeals cancelling the insurance policy is correct and should be affirmed, and that the making of false answers by the applicant in his application for insurance, as to health, physical condition, and treatment by a physician, constituted fraud as a matter of law, and it was not incumbent upon respondent to request the submission of any such issue to the jury.

On April 21, 1943, Aaron James Clark signed an application for an insurance policy, which contained the following questions and answers:

"21. Are you in Good Health? Yes.

"22. Who is your Doctor? None.

"23. What illness, injury or accident have you ever had? Give details. None.

"25. Have you ever had heart disease, asthma, tuberculosis, cancer, ulcers, diabetes, fits, kidney diesease, syphilis, paralysis, rheumatism, sciatica, vertigo, or any illness or disorder of the brain, lungs, spine or nervous system, or any disease not common to both sexes; or suffered the total or partial loss of a hand, foot, eye, or the use thereof? Are you deformed? Do you use intoxicating liquors, morphine, or other narcotics to excess? If yes, give particulars." Answered, "No."

Aaron J. Clark died February 6, 1945. The primary cause of his death was cerebral hemorrhage, with hypertensive heart disease as a contributory cause.

This suit was brought by the insurance company within the two-year contestable period. Plaintiff alleged that, relying solely upon the representations made in the application, it issued its policy to Aaron J. Clark on May 3, 1943, but that it would not have done so if it had been advised of the insured's physical condition and that he had been previously treated by a physician. It alleged that when the application was signed, as well as when the policy was issued, the insured was not and had not been in good health; that he had been attended by a physician; that he was suffering from hypertensive heart disease and cardiac decompensation; and that he made the misrepresentations fraudulently for the purpose of inducing plaintiff to issue the policy.

Only one issue was submitted to the jury; and in answer to that issue the jury found that on May 3, 1943, Aaron J. Clark was in sound health. No other question was submitted, and no other issue was requested by either party. Plaintiff did not request the submission of any issue on its allegations of fraudulent answers to Questions Nos. 22, 23, and 25, above quoted.

The question of whether or not the insured was in "good health" when the policy was issued was a controverted issue of fact to be determined by the jury, and was foreclosed by the findings of the jury. Vann v. National Life & Accident Ins. Co., Tex.Com.App., 24 S.W.2d 347; Coxson v. Atlanta Life Ins. Co., 142 Tex. 544, 179 S.W. 943. Where the testimony is conflicting on an issue of fact, appellate courts will not disturb a verdict of a jury when there is competent evidence to support the findings. Ruebeck v. Hunt, 142 Tex. 167, 176 S.W.2d 738, 150 A.L.R. 775; Fidelity & Casualty Co. of New York v. McLaughlin, 134 Tex. 613, 135 S.W.2d 955; 3 Tex. Jur., pp. 1093-1097, §§ 767-769.

The controlling question here is whether or not it was incumbent upon the insurance company to secure jury findings on its allegations of fraudulent representations made by the insured in answer to Questions Nos. 22, 23, and 25. Respondent contends that the testimony is undisputed that the insured made false answers to these questions, and that fraud is shown as a matter of law, and it was therefore not necessary to submit such issues to the jury.

Uncontroverted questions of fact need not be and should not be submitted to the jury for its determination; but they are proper subjects for peremptory instructions by the court. Southern Underwriters v. Wheeler, 132 Tex. 350, 123 S.W. 2d 340; American Nat. Ins. Co. v. Green, Tex.Civ.App., 96 S.W.2d 727; 41 Tex.Jur., p. 1027, § 228. But in this case it can not be said that the evidence is undisputed and shows, as a matter of law, that insured was guilty of fraud in answering the questions above enumerated.

The statutes of this State provide what provisions policies of insurance shall contain and what provisions they shall not contain. Articles 4732 and 4733, R.S. 1925, Vernon's Ann.Civ.St. arts. 4732, 4733. Subdivision 4 of Article 4732 reads as follaws: "That all statements made by the insured shall, in the absence of fraud be deemed representations and not warranties."

It is the settled rule that, in order to avoid a...