Missouri State Life Ins. Co. v. Dossett

• Decision Date: 22 May 1924
• Docket Number: (No. 52.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 265 S.W. 254
• Parties: MISSOURI STATE LIFE INS. CO. v. DOSSETT.
• Court: Texas Court of Appeals

265 S.W. 254

MISSOURI STATE LIFE INS. CO. v. DOSSETT.

(No. 52.)^*

Court of Civil Appeals of Texas. Waco.

May 22, 1924.

Rehearing Denied October 16, 1924.

Appeal from District Court, McLennan County; James P. Alexander. Judge.

Two actions, one by the Missouri State Life Insurance Company against Mrs. Jennie D. B. Dossett, the other by Mrs. Jennie D. B. Dossett against the Missouri State Life Insurance Company, consolidated and tried together. From a judgment against the insurance company, it appeals. Judgment of trial court set aside, and judgment rendered for insurance company.

Williams, Williams, McClellan & Lincoln, of Waco, for appellant.

Sleeper, Boynton & Kendall, and J. D. Williamson, all of Waco, for appellee.

BARCUS, J.

On February 26, 1921, appellant, Missouri State Life Insurance Company, issued its two policies of life insurance on the life of A. J. Dossett, one being for $10,000, and the other for $15,000, payable to appellee as beneficiary. On December 31, 1921, A. J. Dossett died. On January 18, 1922, appellant filed suit in the 19th district court of McLennan county against Mrs. Dossett as beneficiary to cancel the policies, and tendered the amount of the premiums paid, together with 6 per cent. interest thereon from the time of payment; alleging as ground for canceling the policies that certain false and fraudulent statements were made by A. J. Dossett in his application for the insurance, which will be more fully stated hereafter.

On June 13, 1922, appellee as beneficiary filed suit in the 19th district court against appellant to recover the face of said policies, together with penalty, interest, and attorney's fees. The two suits were by the court consolidated and tried under the number and style of the suit brought by appellee. The consolidated causes were tried before a jury, which resulted in a judgment being rendered in favor of the appellee for the full face of said policies, with 12 per cent. penalty, 6 per cent, interest, and 4,000 attorney's fees.

The record in this cause is very voluminous and a number of assignments of error are presented. From our view of the case, it will not be necessary to pass in detail on the various assignments of error as presented by appellant.

The insurance policies sued on are what are commonly known as standard 20-year pay policies, with the clause contained therein that they are incontestable after one year, except for the failure to pay the premium. No question was raised about the policies having been issued, or the proof of death of the insured, or the demand on appellant for payment.

Appellant contends that the policies are void and unenforceable because of certain false and fraudulent answers made, and information concealed by A. J. Dossett in the answers contained in his applications for the insurance, with reference to the following questions:

"No. 16. I have never been declined nor postponed for insurance nor offered a policy different than that for which I made application, except ____"

The answer to the above was left blank, and was filled in by the home office of the insurance company to read, "None." Mr. Dossett was notified before the policy was delivered that the answer to said question had been so filled in, and he accepted his policy, which contained the application with said answer:

"No. 2 (b). Has any life insurance organization ever declined or failed to issue a policy on your life, or offered one different than applied for?" Answer. "Bankers' Life, 1910."

"No. 5. Detail all illnesses, diseases, operations, accidents, or injuries you have had since childhood (giving clinical history below)." Answer: "None."

"No. 6 (d). Has any physician ever expressed an opinion that your urine contained sugar or albumen, or casts? (Give full details)"—to which he answered, "No."

"No. 8. Are you now in good health? If not, what is the cause?"—to which he answered, "Yes."

The applications which A. J. Dossett signed stated that the answers contained therein were full, complete, and true. The testimony with reference to the facts, in so far as they involve the above questions and answers thereto, is undisputed. It was an established fact that the Bankers' Life Insurance Company, in 1910, rejected Mr. Dossett's application for insurance; that the State Mutual of Rome, Ga., in about 1910, rejected his application; that the Reliance Life Insurance Company, about 1911, rejected his application; the Southland Life Insurance Company, about 1914, rejected his application; the Kansas City Life Insurance Company, about 1910 or 1911, rejected his application; the Amicable Life Insurance Company, about February, 1920, refused him life insurance; and the New York Life Insurance Company, in 1916, gave him a substandard policy on his application for a regular policy.

The evidence shows that the answer he made to the medical examiner in answering question No. 2 (b) above did not state all the facts, in that he had been examined by all of the companies named above and rejected by all of them, except the New York Life, which had issued him a substandard policy. It was established beyond controversy that his answer to question 6 (d) above was untrue, in that Dr. Graves and Dr. Thompson of Galveston, in 1911, told Mr. Dossett that he had albumen and casts in his urine and advised him to, and Mr. Dossett did, change his business by reason thereof. Mr. Dossett told Dr. Sapp of Cameron and Dr. Scott of Temple of said examination. In 1913 Dr. Graves advised Mr. Dossett that his urine showed casts. In 1914 the Southland Life Insurance Company rejected Mr. Dossett's application because of casts in his urine, and Mr. Dossett was advised of said fact. In April, 1917, Dr. Scott made an examination of Mr. Dossett's urine and told him that it contained casts. On May 11, 1920, Dr. Van Tobel of Temple informed Mr. Dossett that he had casts in his urine. In December, 1919, and January and February, 1920, Dr. Brumby made four urinalyses of Mr. Dossett's urine and each time found casts and albumen, and so informed Mr. Dossett. The last one was made in the presence of Mr. Dossett, and he was told that by reason of casts and albumen in his urine he could not get insurance. In February, 1920, Dr. Longmire of Temple examined Mr. Dossett's urine and advised him that it contained casts.

With reference to his answer to question No. 8 above that he was in good health at the time the application was made, all of the testimony shows that the statements by doctors who had examined his urine were known to Mr. Dossett. Dr. Witte had treated Mr. Dossett in November, 1918, for physical illness, and at that time told him he had renal colic and advised him to go to the sanitarium at once for an examination, which he did, and the X-ray examination at Temple did not reveal anything seriously wrong with his condition. Again, in the fall of 1919, Dr. Witte attended Mr. Dossett professionally when he had a cold, which the doctor called a mild attack of the "grippe" or "flu." Mr. Dossett was examined at four different times by Dr. Brumby and Dr. Davis of the Amicable Life Insurance Company in December, 1919, and January and February, 1920, and was informed on each of said examinations that he had either albumen or casts in his urine. In February, 1920, he had a thorough examination made in the Scott Sanitarium at Temple, including an X-ray examination, and was informed at that time that his urine contained albumen and casts. At the close of the testimony appellant requested a peremptory instruction, which was refused, and to which it excepted and has assigned error, and we sustain said assignment.

The appellee does not controvert the above facts, but contends that the answers made were not material, and were not willfully and knowingly made, and that the appellant knew the real facts when the policies were issued, and knew the answers as made by Mr. Dossett were not complete and full; that if it did not know all the facts, by the use of the information it had, it could have if it desired, learned the real facts. In support of said contention, it is shown by the record that, at the time appellant issued the policies in question, it knew that the Bankers' Life Insurance Company, in 1910, had rejected Mr. Dossett for life insurance by reason of albumen and casts having been found in his urine.

There is some testimony that appellant also knew that another company, the name not being disclosed, in 1910, had rejected him, and the testimony shows that appellant knew that Mr. Dossett had been rejected by some company in 1915 for the same reason; the name of the company not being disclosed. This information was obtained from what in insurance circles is known as the Medical Impairment Bureau, the American Life Convention, and the Retail Credit Company; appellant having a card and a report from each of said organizations containing said information. Said cards, in connection with that information, revealed the fact that in June, 1916, and in December, 1920, Mr. Dossett was examined by different companies for insurance, and his urine did not at said time show either albumen or casts. By reason of the amount of the insurance applied for, and the fact that Mr. Dossett had been rejected in 1911 and 1915 by insurance companies because albumen and casts were found, appellant, before it issued the policies, required two specimens of Mr. Dossett's urine to be sent to the home office for examination, and said examination did not show any trace of albumen or casts.

Under the law in Texas, insurance companies are required to write into their policies the clause that same will be incontestable after the expiration of not more than two years from the date of issuance, except for nonpayment of the premiums, and that all statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties, and that no statement contained in the application shall avoid the policy,...