Life & Cas. Ins. Co. of Tenn. v. Rivera

• Decision Date: 09 November 1967
• Docket Number: No. 306,306
• Citation: 420 S.W.2d 788
• Parties: LIFE & CASUALTY INSURANCE COMPANY OF TENNESSEE, Appellant, v. Homero RIVERA, Appellee. . Corpus Christi
• Court: Texas Court of Appeals

Page 788

420 S.W.2d 788

LIFE & CASUALTY INSURANCE COMPANY OF TENNESSEE, Appellant, v. Homero RIVERA, Appellee.

No. 306.

Court of Civil Appeals of Texas Corpus Christi.

Nov. 9, 1967.

Rehearing Denied Nov. 21, 1967.

Wm. R. Anderson, Jr., and James H. Atwill, of Sorrell, Anderson & Porter, Corpus Christi, for appellant.

Eduardo E. de Ases, corpus Christi, for appellee.

OPINION

NYE, Justice.

This is a suit on a life insurance policy brought by Homero Rivera against Life and Casualty Insurance Company of Tennessee. Plaintiff alleged that he entered into a contract with the defendant insurance company whereby the plaintiff agreed to pay a stipulated premium and defendant agreed to issue a policy of insurance insuring the lives of the plaintiff, his wife and children. The insurance company issued a nonmedical life insurance policy on the life of the plaintiff in the principal sum of $1,000.00 and $500.00 on each dependent child. One of plaintiff's children Nora Linda Rivera died several months after the policy was issued. Plaintiff alleged that the contract of insurance was in full force and effect, the premium had been paid, and that after notice to the insurance company, the claim upon the policy had been denied. The insurance company defended on the sole ground that the deceased child was not in good health and that under the express terms of the policy said insurance would not be effective unless at the time of such issuance of the policy the said Nora Linda Rivera was in fact in good health. The case was tried before the court without the aid of a jury resulting in a judgment in favor of the plaintiff for $500.00 plus costs and $250.00 attorney fees.

The insurance policy provided that: 'This Policy shall take effect as of the date of issue provided the insured, the insured Wife and each Dependent Child are alive and in good health on such date and the first premium shall have been paid in cash.' The insurance company's agent completed the application for insurance and filled in the blanks because the plaintiff insured was an illiterate farm worker who could not read nor write. The insured stated that he and his children were in good health. The insurance company did not raise any question about fraudulent statements of misrepresentations.

The appellant insurance company's sole defense in the trial court and here is that the deceased child was not in good health at the time the policy of insurance was issued. Appellant's four points of error are to the effect that the plaintiff was required to prove that the deceased was in good health at the time the policy was issued. Appellant argues that in view of the fact that the insurance company plead this defense (that the insured deceased child was not in good health) that under Rule 94 Tex.R.Civ.P. the burden of proof was on the plaintiff and that the plaintiff failed to meet this burden, and that the trial court was therefore in error in rendering judgment for the plaintiff. Appellant contends that when the defendant insurance company pleads exceptions as a defense to the policy, the plaintiff has the burden of proof to negate the exclusions to the limitations contained in the policy pleaded as a defense by the defendant's answer. Citing Sherman et ux v. Provident American Insurance Co., 404 S.W.2d 340 (Tex.Civ.App.--Beaumont 1966, affirmed 421 S.W.2d 652, Tex.1967). It is true that where an insurance company issues a policy of insurance containing certain exceptions, limitations and exclusions to the coverage and the defendant insurance company answers a suit based on its policy of insurance pleading certain exclusions and limitations contained in the policy, which the company contends would relieve it of liability, then the burden of producing evidence to demonstrate that the plaintiff's cause of action was not attributable to the pleaded exclusions and limitations is on the plaintiff. Sherman v. Provident American Insurance Company, supra; Hardware Dealers Mutual Insurance Co. v. Berglund, 393 S.W.2d 309 (Tex.Sup.1965) and International Travelers Association v. Marshall, 131 Tex. 258, 114 S.W.2d 851 (1938) see the cases cited therein. But this is not the situation where the defense by the insurer goes to a promissory warranty that affects the very validity or effectiveness of the policy of insurance itself. See 32 Tex.Jur.2d 795, Sec. 540.

Where the plaintiff in a suit on the policy pleads and proves the execution and delivery of a policy of life insurance, he makes out a prima facie case as to the original validity of the policy of insurance. Trevino v. American Nat. Ins. Co., 140 Tex. 500, 168 S.W.2d 656 (Tex.Com.App., opinion adopted Tex.Sup.1943). The plaintiff suing on the policy of insurance is not required either to plead or prove that the deceased insured was in sound health when the policy was issued. Ill health of the insured or fraudulent representations as to the condition of the insured's health are extrinsic facts, matters of defense, upon which the insurer may rely in contesting the policy that evidences its liability. The plaintiff made out a prima facie case by proving up a valid life insurance policy held by him on the life of the deceased child. The burden of invalidating the policy was upon the defendant insurance company. Manhattan Life Insurance Co. v. Harkrider, 396 S.W.2d 207 (Tex.Civ.App.--Austin 1965, wr. ref., n.r.e., Tex.Sup., 402 S.W.2d 511, 1966); Trevino v. American Nat. Ins. Co., supra. This is true under Rule 94, Tex.R.Civ.P. as nothing under the rule changes the burden of proof on such issue of good health.

The question concerning the burden of proof was recently before the Supreme Court of Texas. There the insurance company sought to cancel a non-medical life insurance policy. The beneficiary in a cross action sought recovery of the policy proceeds. The policy contained the similar provision that it shall not take effect unless the insured was in good health at the time it was delivered to him. The court stated that the insurance company had the burden of proof on the question of good health in either situation as plaintiff or as cross defendant. The insurance company is required to obtain a finding from a preponderance of the evidence that the insured was not in good health. Great American Reserve Insurance Co. v. Britton, 406 S.W.2d 901 (Tex.Sup.1966); 46 C.J.S. Insurance § 1319 at pp. 424 and 431.

In the case at bar the judgment was for the insured in face of the defense that the deceased was not in good health. There was no findings of fact and conclusions of law requested or found. Therefore, the judgment of the trial court should be affirmed if it can be upheld on any legal theory that finds support in the evidence. Bishop v. Bishop, 359 S.W.2d 869 (Tex.Sup.1962). The trial court impliedly found that the deceased was in good health at the time the policy went into effect. Where the insurer fails to obtain a favorable finding on the question of good health, then the true question to be decided by us is whether the evidence establishes conclusively, according to recognized legal standards, that the insured was not in good health. Great American Reserve Insurance Co. v. Britton, supra. The Court in Britton stated:

'* * * 'good health' does not mean 'perfect health'. * * * The term (the Court reasoned) is usually defined as a state of health free from any disease or bodily infirmity of a substantial nature which affects the general soundness and healthfulness of the system seriously or materially increases the risk to be assumed by the insurer. * * *' Citing cases. '* * * We have also held that a good health provision is breached if the applicant 'is suffering...