Pacific Mut. Life Ins. Co. of California v. Hale

Citation267 S.W. 282
Decision Date13 November 1924
Docket Number(No. 1668.)<SMALL><SUP>*</SUP></SMALL>
PartiesPACIFIC MUT. LIFE INS. CO. OF CALIFORNIA v. HALE.
CourtCourt of Appeals of Texas

Appeal from District Court, El Paso County; P. R. Price, Judge.

Action by Joseph Weatherby Hale against the Pacific Mutual Life Insurance Company of California. Judgment for plaintiff, and defendant appeals. Reversed, and rendered.

Dyer & Morton, of El Paso, for appellant.

W. E. Rogers and C. L. Galloway, both of El Paso, for appellee.

HIGGINS, J.

Appellant, a California corporation, issued to the appellee Hale a life, health, and accident insurance policy, dated January 6, 1923. At that time, and prior thereto, Hale was a resident of North Carolina, in which state the appellant was doing business. The policy was delivered to Hale in that state where he continued to reside until his removal to El Paso, Tex., in May, 1923. The policy insured Hale "against disability commencing while this policy is in force and resulting from sickness"; such sickness "to be such as will result in continuous, necessary, and total loss of all business time." The rate of indemnity was fixed at $150 per month during the continuance of such disability, provided that no indemnity should be paid for the first two months of any period of disability.

This suit was brought by Hale in El Paso county upon the policy alleging that on April, 12, 1923, he became disabled from pulmonary tuberculosis and has remained so disabled. Recovery was sought for the monthly payments contracted to be paid excluding the first two months of disability. Recovery was also prayed for interest, attorneys fees, and the penalty as provided by the Statutes of Texas. Plaintiff recovered judgment as prayed for, and the defendant appealed.

The defendant in bar of the action and as the basis of a cross-action for rescission, pleaded that the contract was governed by the laws of North Carolina, which were specifically set up, and that the policy was procured—

"by said plaintiff by reason of material misrepresentations of fact made and contained in answers made by said plaintiff to questions contained in the written application, and to questions asked said plaintiff by the defendant's medical examiner in connection with said application in this: that in the application, question No. 15 is as follows: `Have you ever had or have you now any bodily or mental infirmity or deformity (including hernia and rupture), or have your impaired hearing, any disease of either eye, lost a limb or the sight of an eye, or are you in any respect maimed or in unsound condition mentally or physically? (Give particulars.)' To which the plaintiff answered: `No.' The said application was duly signed by said plaintiff, and a photographic copy thereof attached to the policy. And in that in questions to be asked by the medical examiner, which is a part of the application, and in question 5 thereof, subsection (C), the plaintiff was asked: `Have you ever had or been treated for: * * * (C) Influenza, pneumonia, pleurisy, bronchitis, or tuberculosis?' Answer: `Yes; three weeks with flu in 1918.' And in section (L) of said question 5, plaintiff was asked: `(L) Have you given full information about each disease or symptom mentioned above which you have ever had or been treated for?' To which plaintiff answered: `Yes.' And in that in question 6 the plaintiff was asked: `Have you had any injuries or illnesses or consulted or been treated by any physician or practitioner during last seven years?' To which the plaintiff made answer as follows: `Give particulars each illness, injury consultation and treatment: Flu. Date: 1918. Duration: Three weeks. Result: Excellent. Physician's name and address: Dr. W. I. Taylor, Burgaw, N. C.'

"That said questions to be asked by the medical examiner were duly signed by said plaintiff, and are a part of the application; photographic copies of all being attached to the policy. That the answers aforesaid made by said plaintiff to said questions 15 and 5 (L) were false and untrue; that the answers made by plaintiff to questions 5 (C) and 6 were incomplete, and in that respect were false and untrue, and that within the period of seven years immediately preceding the date of said application, which bears date of December 8, 1922, the plaintiff had had, or had been treated for, a condition described as: `Stooped, flushed face and tubercular facies — mouth neg. — some chronic pharyngitis. Chest neg., save rales and leathery rub at left base post.' And that the answer made by plaintiff to question 6 was false and untrue, because plaintiff consulted or had been treated by a physician or practitioner within the seven years preceding the date of said application, to wit, during the month of December, 1919, and January, 1920. At said time plaintiff consulted or was treated by Dr. James R. Robertson, of Wilmington, North Carolina, who made the finding hereinabove quoted, as: `Stooped, flushed face and tubercular facies — mouth neg. — some chronic pharyngitis. Chest neg., save rales and leathery rub at left base post.' He had an X-ray picture made of plaintiff's chest, and advised plaintiff to go to Asheville, North Carolina, and put himself under the care of a tubercular specialist. That said false and untrue answers and misrepresentations made by plaintiff as aforesaid, materially affected the acceptance of the risk and the hazard assumed thereunder by defendant company, in connection with the issuance of the policy herein sued upon, and were material misrepresentations and were of such character as to entitle this defendant to rescind said policy and contract of insurance, and the defendant would not have issued said policy, had it known the truth."

It was further pleaded that if the laws of North Carolina did not apply then the contract was governed by the laws of California which were pleaded, and that under the laws of that state the matters above set up avoided the contract.

The court submitted three questions to jury with accompanying instructions as follows:

"Question No. 1. Do you find from the evidence that the failure of plaintiff, in response to questions propounded by the medical examiner of the company, to mention that in the latter part of 1919, or in January, 1920, he was treated by a physician, amounted to the misrepresentation or concealment of a fact material to the risk in the policy for which he was applying? Answer Yes or No.

"In connection with this question, you are charged that a fact is material to an insurance risk which would reasonably induce the company to decline the insurance.

"Question No. 2: Do you find from the evidence that plaintiff's failure to answer that he had been treated by Dr. Robertson in 1919 or 1920 was a concealment of a fact material to the risk? Answer Yes or No.

"You will look to the direction given you under question No. 1, in answering this question, as to what is material fact in an insurance risk. If you have answered question No. 1, and No. 2 in the negative, then answer this additional question:

"Question No. 3. Do you find from the evidence that the plaintiff, with intent to deceive the defendant company, failed to mention the fact of his illness in 1919 or 1920, and his treatment by Dr. Robertson Answer Yes or No."

The above questions were answered in the negative.

At the request of defendant these additional questions were asked:

"No. 1. Do you find from the evidence that if plaintiff had given information concerning symptoms of his illness, consultation and treatment in December, 1919, and January, 1920, that defendant would have issued the policy herein? Answer Yes or No.

"No. 2. Do you find from the evidence that the plaintiff had tuberculosis on the 14th day of December, 1922? Answer Yes or No.

"No. 3. Do you find from the evidence that plaintiff on or before December 14, 1922, had been advised that he had tuberculosis? Answer Yes or No.

"This issue is to be answered in the event you answer defendant's special issue No. 2 in the affirmative, otherwise you will not answer same.

"No. 4. Do you find from the evidence that plaintiff had tuberculosis during December, 1919, or January, 1920? Answer Yes or No."

No. 1 was answered Yes; Nos. 2 and 4 were answered No; No. 3 was not answered, in accordance with the conditional instruction given by the court. The medical examiner's report and the questions therein answered by appellee is dated December 14, 1922.

Appellant presents numerous assignments, but under the view which we have of the case it is necessary to consider only the sixteenth, which complains of the refusal of a peremptory instruction in favor of the defendant, and those which question the sufficiency of the evidence to support the jury's findings.

The validity, interpretation, and obligation of the contract is to be governed by the laws of either North Carolina or California. The laws of Texas apply only as to matters of remedy and procedure.

In cases where the application is made in one state and the same accepted in another, it sometimes is difficult to determine in which state the contract was finally executed but in the state of the pleadings here there is no difficulty of the kind. The plaintiff alleged that the defendant was doing business in North Carolina, and, on January 6, 1923, through its regularly constituted agent at the city of Wilmington in said state, made, executed, and delivered to him the policy in question. The defendant pleaded that the application was taken in North Carolina by its agent in that state, and the policy delivered to plaintiff by said agent in said state after the same had been there countersigned by its agent and the premium then paid. These affirmative allegations of both parties each show that the contract was finally executed in North Carolina, and it is governed by the laws of that state, the policy itself being silent as to the place of performance.

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3 cases
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    ... ... Perkins, 29 Miss. 139, 64 Am. Dec. 136; Pac. Mut. Life ... Ins. Co. v. Hale, 267 S.W. 282, 284 ... ...
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