Gorman v. Jefferson Standard Life Ins. Co.

• Decision Date: 27 May 1925
• Docket Number: (No. 2507.)
• Citation: Gorman v. Jefferson Standard Life Ins. Co., 275 S.W. 248 (Tex. App. 1925)
• Parties: GORMAN v. JEFFERSON STANDARD LIFE INS. CO.
• Court: Texas Court of Appeals

275 S.W. 248

GORMAN v.JEFFERSON STANDARD LIFE INS. CO.

(No. 2507.)

Court of Civil Appeals of Texas. Amarillo.

May 27, 1925.

Rehearing Denied June 24, 1925.

Appeal from District Court, Wichita County; E. W. Napier, Judge.

Suit by Nellie Gorman against the Jefferson Standard Life Insurance Company.Judgment for defendant, and plaintiff appeals.Affirmed.

Watkins & Walsh, of Wichita Falls, for appellant.

Carrigan, Montgomery, Britain, Morgan & King, of Wichita Falls, for appellee.

JACKSON, J.

This suit was instituted in the district court of Wichita county, Tex., by Nellie Gorman, appellant, joined pro forma by her husband, against the Jefferson Standard Life Insurance Company, appellee, to recover on a policy of life insurance issued by appellee to Katherine E. McGee, hereinafter called deceased, in the sum of $2,000, payable to appellant, upon receipt of proof of the death of the insured by appellee.

Appellant properly pleaded her cause of action, showing that on January 13, 1923, appellee delivered to deceased, a single woman, the policy sued on, setting up the terms thereof, the payment of the premium, and the death of the deceased, Katherine E. McGee, on March 25, 1923.

Appellee answered by general demurrer, general denial, admitted the issuance and delivery of the policy, but pleaded that the deceased made application to it for a life insurance policy in the sum of $2,000, on what is known as the ordinary life plan, which application was in writing, and, as an inducement to the issuance of the policy, answered certain questions propounded to her by the medical examiner of appellee and contained in said application relating to her health, both past and present; that in said application she agreed for herself and for every person who should have or claim any interest in any insurance secured by virtue of said application; that she had carefully read each and all of the answers as written and made by her; that they are full, complete, and true, and she was a proper subject for life insurance, and that said representations and answers were made to obtain the insurance, and that she agreed that each and every statement and representation made therein was material, and that the company, believing them to be true, would act upon them; that the answers made by the deceased to certain questions in said application, all of which are set out in appellee's pleading, were misrepresentations, were false and untrue, were made for the purpose of inducing appellee to issue the policy, all of which was known to the deceased, and that such misrepresentations, false and untrue statements, were relied on by appellee, were material, were important and necessary in considering and passing upon the application for the insurance, and that the policy was obtained by such false and fraudulent statements and representations, and but for which appellee would not have issued and delivered the policy, and, by reason thereof, appellee is not liable.It tendered the premium paid, and asked a cancellation of the policy.

Appellant, by supplemental petition, pleaded general denial, and also alleged that, if it was true that the deceased had been disabled or received medical or surgical attention within the past 5 years previous to her application, the failure to disclose such disability or medical or surgical attention was wholly immaterial, because, had such fact been revealed, the appellee, under the circumstances, would have nevertheless issued the policy.

Appellant also alleged that it was a general custom among insurance companies in the United States, and especially in that part of the country, to accept applications for insurance where the applicant had theretofore been disabled and received medical or surgical attention within the 5 years next preceding the application for insurance, and that defendant was a party to such custom, and, had the disability and medical and surgical attention received by the deceased been disclosed to appellee, it would, in pursuance to the said custom, have issued the insurance.

The case was submitted to the court, without the intervention of a jury, and, at the conclusion of the trial, judgment was rendered in favor of appellee, and that plaintiff take nothing by her suit.

The court filed findings of fact which are in substance as follows: The policy issued to the deceased was dated January 13, 1923, in pursuance to an application therefor bearing the same date, and that she died about March 23, 1923; that, in answer to questions in the application, deceased stated she had not been disabled or received injuries or medical or surgical attention within the past five years, and was sound mentally and physically and free from any infirmity or deformity that she had not suffered from any ailment or disease of the heart, lungs, pleuræ, chest, liver, kidneys, or bladder, nor undergone a surgical operation, nor been a patient in a hospital, sanitarium or asylum, and had not consulted a physician regarding any ailment or disease not included in her answers; that she agreed in said application, for herself and any person who might have or claim an interest in the insurance secured on said application, that every statement and representation contained therein was material and true; that she had carefully read all of her answers; that they were written as she had made them; that they were full, complete, and true, and she was a proper subject for life insurance; that each and all of the statements, representations, and answers were made by her to obtain the insurance; that she understood and agreed that they were all material to the risk; and that the company, believing them to be true, would rely and act on them.

The court found that the policy issued on said application contained the clause making it incontestable for any cause, except nonpayment of premium after it had been in force for one year, and that the policy and application were attached together and constituted the entire contract, as well as the other provisions required by our statutes.

He also finds that, about 18 months prior to the application, the deceased had been a patient in the Wichita General Hospital; that she had been disabled, and received medical and surgical attention within the past 5 years preceding the date of the application, and had suffered from an ailment or disease of the lungs, pleuræ, and chest, and had consulted physicians for menstrual disorders and misplaced uterus; that, about 18 months prior to the application, she had a severe attack of bronchial pneumonia, and a few weeks later was operated on for mastoiditis; and that she was visited by physicians several times after she had the bronchial pneumonia and mastoiditis and to the time of her death, and advised with physicians more times than they visited her.He finds as a fact that the foregoing misrepresentations were intended, and were material to the risk assumed.He then finds that the deceased had fully recovered from the effects of the attack of pneumonia and the operation for mastoiditis, and was in sound health mentally and physically, and free from any infirmity or deformity at the time of the application for, and the delivery of, the policy.

Appellant, by her first proposition, based on proper assignments, challenges the correctness of the action of the trial court in rendering judgment against her, and asserts that a misrepresentation in an application for life insurance to be material to the risk assumed must be one which actually contributes to the contingency upon which the policy becomes due and payable.

Appellee replies thereto with a counter proposition that the policy contained a clause declaring it to be incontestable after 1 year from the date of the issue, and articles 4947 to 4951, V. S. C. S., have no application.

In 1903the Legislature enacted articles 4947 to 4951 of V. S. C. S., and article 4947 provides, in substance, that any provision in a policy of insurance contracted for in this state, which provides that the answers or statements made in the application for such insurance, if untrue or false, shall render the policy void or voidable, shall be of no effect, and constitute no defense to a suit brought upon such insurance policy —

"unless it be shown upon the trial thereof that the matter or thing misrepresented was material to the risk or actually contributed to the contingency or event on which said policy became due and payable, and whether it was material and so contributed in any case shall be a question of fact to be determined by the court or jury trying such case."

Article 4951, referring to the articles preceding, one of which is article 4947, among other things, provides:

"The provisions of the foregoing articles shall not apply to policies of life insurance in which there is a clause making such policy indisputable after two years or less, provided premiums are duly paid."

The policy issued by appellee in the instant case provides that after one year it shall be incontestable for any cause, except nonpayment of premium, and the deceased died within the year, consequently, if these articles control, appellee's defense, based on fraud and misrepresentations, would not be affected or limited by the provisions thereof.

In Wright v. Federal Life Ins. Co., 248 S. W. 325, Presiding Judge Gallagher of section A of the Commission of Appeals, in considering the effect of these articles on a policy issued in 1915, says:

"Articles 4947, 4948, and 4951 of the Revised Statutes are taken bodily from chapter 69 of the Acts of the Twenty-Eighth Legislature(General Laws of Texas 1903, p. 94).By the express terms of said article 4951 none of said articles apply to policies containing a provision making the same incontestable after two years or less, provided premiums are paid.The policy sued on contains such a provision and complies with all the requirements prescribed by said article.None of said articles apply in...