Dossett v. Franklin Life Ins. Co.

• Decision Date: 18 November 1925
• Docket Number: (No. 552-4291.)
• Citation: 276 S.W. 1097
• Parties: DOSSETT v. FRANKLIN LIFE INS. CO.
• Court: Texas Supreme Court

Page 1097

276 S.W. 1097

DOSSETT v. FRANKLIN LIFE INS. CO.

(No. 552-4291.)

Commission of Appeals of Texas, Section B.

November 18, 1925.

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

Suit by Mrs. Jennie D. B. Dossett against the Franklin Life Insurance Company, consolidated with suit by insurance company to cancel policies. Judgment for plaintiff Dossett was reversed in the Court of Civil Appeals (265 S. W. 259), and she brings error. Judgment of the Court of Civil Appeals reversed, and judgment of the district court affirmed.

J. D. Williamson, of St. Louis, Mo., and Sleeper, Boynton & Kendall, of Waco, for plaintiff in error.

Williams, Williams, McClellan & Lincoln, of Waco, for defendant in error.

SPEER, J.

This case is before us upon writ of error to the judgment of the Court of Civil Appeals for the Tenth District, seeking to reverse the judgment of that court wherein it reversed the trial court and rendered judgment in favor of the defendant in error, Franklin Life Insurance Company. 265 S. W. 259.

The suit was instituted by plaintiff in error, Jennie D. B. Dossett, as beneficiary, against defendant in error, to recover upon three standard twenty-year pay insurance policies on the life of A. J. Dossett, her deceased husband, aggregating $25,000. This suit was consolidated with one previously brought by the company to cancel these policies.

The trial court rendered judgment for Mrs. Dossett, and the Court of Civil Appeals, in reversing that judgment and rendering judgment for the insurance company, sustained the contention that the policies were void and unenforceable because of false and fraudulent answers made, and information concealed, by A. J. Dossett in the answers which he made in his application for the insurance, with reference to the following questions:

"Question 1 (for convenience). I have not applied to any company, association, society, or agent for insurance without having received a policy of the exact kind and amount applied for. (If there is any exception or qualification to this statement, applicant must give full particulars.)" To which he answered: "No."

"Question 11. Have you ever been examined for insurance without receiving the policy applied for? (If yes, give date and name of company or society.)" Answer: "Yes; Bankers' Life, 1910."

"Question No. 13. Have you now, or have you ever, had any of the following diseases or ailments: Albumen or sugar in urine, any disease of the kidney or bladder?" Answer: "No."

"Question No. 14. Give names and addresses of all physicians who have attended or prescribed for you or whom you have consulted during the past five years, together with nature and date of ailments." Answer: "No sickness."

"Question No. 15. Have you had any sickness, ailment, or injuries since childhood that you have not named or described above? (If yes, give the dates and details.)" Answer: "No." "Doctor A. C. Scott, Temple, Tex., makes general physical examination twice each year; has never found any trouble."

The trial court made very full findings of fact, and the Court of Civil Appeals has not set aside any of those findings, nor has it made any other findings inconsistent therewith, but it has held that, as matter of law, under the findings and undisputed facts the insurance company was entitled to the relief which it granted. The conclusion of the Court of Civil Appeals rests upon the facts that the answer to question 1 was false, in that A. J. Dossett had applied for insurance and been rejected, or obtained policies different from the one applied for, in several instances mentioned by the court; that the answer to question No. 11 was incomplete, in that he had been examined by all those companies and been rejected, except the New York Life, which had issued him a substandard policy; that his answer to question No. 13 was untrue, in that he had been examined by physicians for insurance companies, and otherwise, and had been rejected or informed that he had albumen and casts in his urine; that his answers to question No. 14 and No. 15 were false, the particulars thereof being set out at length.

As above stated, the findings of the trial court were voluminous, and need not be stated in full. It will be sufficient to state them generally and briefly, since they have not been attacked, and only their legal sufficiency to support the judgment for the plaintiff is questioned.

The court found that prior to the issuance of the policies involved, the company knew that A. J. Dossett had on several occasions been rejected for insurance, and further that the company knew before issuing the policies that Dossett had been several times examined and rejected by insurance companies because of albumen and casts in his urine. The court further found that the insurance company did not rely upon the statements of the deceased in the issuance of the policies, but that, with knowledge of the fact that he had had albumen and casts in his urine, made its own independent investigation and relied upon the examinations made by its own physicians and the opinion of its own medical director. It further found that none of the answers complained of were material to the risk in view of the information that the company had, and that the company did not rely upon any of said answers as written, but relied upon its own independent investigations, and further in substance and effect found that the answers to questions 14 and 15 were true.

The Court of Civil Appeals has correctly stated some general principles applicable to cases like this, but a failure to properly apply those principles led it into error in reversing the judgment of the trial court. For instance, that court says:

"If the insurance company is aware of the fact that the answers made by the applicant for insurance are false, it cannot, if it issues the policy and accepts the premiums, plead the falsity of said statements as a defense or bar to recovery."

Yet this precise thing has been allowed by the judgment of that court. Authorities might be multiplied indefinitely in support of the principle thus announced. It is unquestionably sound. Phoenix Mutual, etc., Co. v. Raddin, 120 U. S. 183, 7 S. Ct. 500, 30 L. Ed. 644; Garrett v. Burleson, 25 Tex. Supp. 41; Cresap v. Manor, 63 Tex. 485; Insurance Company v. Hanna, 81 Tex. 487, 17 S. W. 35; Sun Life Insurance Co. v. Phillips (Tex. Civ. App.) 70 S. W. 603; Mutual Reserve Fund Life Association v. Sullivan (Tex. Civ. App.) 29 S. W. 190; Liverpool, etc., Co. v. Ende, 65 Tex. 118; Waggoner v. Zundelowitz (Tex. Com. App.) 231 S. W. 721; Wortman v. Young (Tex. Com. App.) 235 S. W. 559; Guarantee, etc., Co. v. Evert (Tex. Civ. App.) 178 S. W. 643 (w. ref.); The Homesteaders v. Stapp (Tex. Civ. App.) 205 S. W. 743 (w. ref.).

The Court of Civil Appeals furthermore said:

"Where the questions asked in any application for insurance policy are unquestionably material and the answers are admittedly untrue, it is the duty of the court to render a judgment for the insurance company."

This is only qualifiedly true. It is but a half-truth. Such judgment would not follow if the insurance company in such case knew of the falsity of the answers or otherwise did not rely upon their truth. These qualifications themselves generally constitute fact questions of controlling importance, counteracting any consideration of materiality or falsity of the answers given. The Court of Civil Appeals further said:

"Unless the applicant reveals all the material facts about which he is asked, it does not lie in his mouth to say that because the company knew part of his answers were untrue, it was charged with notice that all of his answers might be untrue. If the applicant makes statements that are material, which are untrue, it would void the policy, unless the company knew that those identical...