National Life & Accident Ins. Co. v. Clark

• Decision Date: 01 November 1946
• Docket Number: No. 13748.,13748.
• Citation: 197 S.W.2d 869
• Parties: NATIONAL LIFE & ACCIDENT INS. CO. v. CLARK.
• Court: Texas Court of Appeals

197 S.W.2d 869

NATIONAL LIFE & ACCIDENT INS. CO. v. CLARK.

No. 13748.

Court of Civil Appeals of Texas. Dallas.

November 1, 1946.

Rehearing Denied November 29, 1946.

Appeal from County Court, at Law, No. 1, Dallas County; Tom Nash, Judge.

Suit by the National Life & Accident Insurance Company against Charles J. Clark to cancel a life insurance policy, in which defendant filed a cross-action for the face value of the policy. Judgment for defendant, and plaintiff appeals.

Reversed and rendered.

Wm. M. Bates, of Dallas, for appellant.

Geo. K. Holland, of Dallas, for appellee.

BOND, Chief Justice.

The parties will here be designated as in the court below. The National Life & Accident Insurance Company, plaintiff, instituted this suit against defendant Charles J. Clark, the beneficiary named in a policy of life insurance, to cancel the policy issued by it to Aaron J. Clark. The alleged ground for cancellation is that the policy was issued on a false and fraudulent application of the purported insured, to the effect that he was in good health; that he had no doctor; that he had never had any illness and that he had never had heart disease. The defendant negatived the issue, and in cross action sought judgment for the face value of the policy, with penalty, interest and attorney's fees.

The trial was to a jury, and the only question submitted was whether or not Aaron Clark, on the day of the issuance of the policy, was in sound health. The jury answered "Yes." Accordingly, the trial court entered judgment against the plaintiff and in favor of the defendant on his cross action for $449.39.

The point at issue in this appeal, which was properly raised in the court below and presented here, is whether under the uncontroverted facts plaintiff was entitled to judgment for the cancellation of the policy for the misrepresentation of a fact or facts by the applicant material to the risk, regarding his health, physical condition and medical history, inducing execution of the policy.

The facts pertinent to the issue are: The application for the policy was dated April 21, 1943, in which the applicant was asked, and to which he answered, as follows:

"21. Are you in good health?" Answered "Yes." "22. Who is your doctor?" Answered "None." "23. What illness, injury or accident have you ever had? Give details." Answered "None." "25. Have you ever had heart disease * * *? If yes, give particulars." Answered "No." Following the questions and answers, the application contains the explicit declaration of the applicant that the answers to the above questions are complete and true; that the said answers with the declaration form the basis of the insurance contract to be issued thereon, and that the policy granted in pursuance thereof shall be accepted by the applicant subject to the conditions and agreements contained in such policy.

The evidence shows that the application was made to J. B. Laza, a soliciting agent of the insurance company, who forwarded it to the Home Office at Nashville, Tennessee, where it was submitted and, in reliance upon the truthfulness of applicant's answers and the recitals in the application, on May 3, 1943, the executive officials of the insurance company executed and caused to be delivered the policy of insurance, in ignorance of any fact or facts to the contrary. On February 6, 1945, Aaron Clark died, the primary cause of his death being cerebral hemorrhage with hypertensive heart disease as a contributing cause. On April 26, 1945, this suit was filed to cancel the insurance contract because of the fraud perpetrated by the applicant inducing its execution; tendering refund of all premiums paid thereon since its issuance.

The policy, among other things, provides that it "Shall take effect on the date of issue, provided the insured is then alive and in sound health, but not otherwise. * * * The policy constitutes the entire agreement between the parties hereto * * *. All statements made by the insured or on his behalf shall, in the absence of fraud, be deemed representations and not warranties. * * * This policy shall be incontestable two years from the date of issue, except for nonpayment of premiums."

The uncontroverted testimony further shows that on January 12, 1942, Aaron Clark went to Dr. Arthur Paul Gottlich, a physician and surgeon engaged in the practice of his profession in Dallas, for consultation, medical attention and advice. The doctor, being privileged to refer to his medical history records of his patient, testified that he had treated Clark intermittently ten or twelve times up to the time of his last illness about January 18, 1944. On direct examination, the doctor said that on his first visit, January 12, 1942, his impression, after examining Clark, was that he (Clark) was suffering with hypertensive heart disease with cardiac decompensation, as that term is applied to the failure of the heart to pump blood through the various vessels of the body, so that a certain amount of the fluid parts of the blood escape from the blood vessels and go into surrounding tissues; that, in laymen's terms, cardiac decompensation is a disease of the heart; that by proper treatment it may all disappear; that hypertensive heart disease is that term which is applied to the change that occurs in a heart due to increase in blood pressure; that it is considered a disease of the heart and, if not controlled, leads to cardiac decompensation or heart failure; that the heart disease itself does not produce cerebral hemorrhage, but causes the heart changes and also causes changes in the blood vessels of the brain which result in cerebral hemorrhage. On cross examination, the doctor testified that heart disease in far-advanced cases is easily discernible, the patient's ankles swelling, with...