Phipps v. American Nat. Ins. Co.

• Decision Date: 19 March 1938
• Docket Number: No. 12332.,12332.
• Citation: Phipps v. American Nat. Ins. Co., 116 S.W.2d 800 (Tex. App. 1938)
• Parties: PHIPPS v. AMERICAN NAT. INS. CO.
• Court: Texas Court of Appeals

116 S.W.2d 800

PHIPPS v.AMERICAN NAT. INS. CO.

No. 12332.

Court of Civil Appeals of Texas. Dallas.

March 19, 1938.

Rehearing Denied May 14, 1938.

Appeal from Dallas County Court; Owen George, Judge.

Action by W. E. Phipps against the American National Insurance Company to recover on a nonmedical life policy.From a judgment for defendant notwithstanding a jury verdict for plaintiff, plaintiff appeals.

Affirmed.

Clifford Craig, of Dallas, for appellant.

W. B. Handley, of Dallas, for appellee.

YOUNG, Justice.

We have concluded to state briefly our conclusions of fact and of law herein, upon the grounds urged in the above motion of appellant for written findings by this court, and, as enlarged upon in his motion for rehearing.Appellant was plaintiff in the trial court and appelleethe defendant, and they will be so referred to here.Plaintiff sued as beneficiary under a nonmedical life insurance policy for $396, issued by defendantJune 10, 1935, on the life of his brother, Claude B. Phipps alleging issuance and delivery, death of the assured and compliance with all policy provisions.Defendant pleaded (1) breach of conditions precedent contained in the insuring clause of the policy, making the effectiveness thereof dependent upon the insured being in sound health on the policy date; (2) fraud in procurement of the policy; and (3) accord and satisfaction.By supplemental petitionplaintiff alleged waiver and estoppel as to the first and second defenses above, and want of consideration as to the third, to which defendant interposed a general denial.

The substance of the facts, as found by the jury, is that: (1) No good-faith dispute existed between plaintiff, William E. Phipps, and the defendant at the time of signing the release in evidence; (2) the agent for defendant had stated to plaintiff, at the time of signing said release, that "$1.20 was all that was due him, due to the fact that the policy had been in effect only a short time," and such statement was a material misrepresentation and relied on by plaintiff in signing the release instrument; (3) that plaintiff had stated to the agent of the defendant, at the time of the signing of the application for this insurance, that his brother, Claude B. Phipps, was in bad physical and mental health, and defendant knew at the time of the delivery of the policy in suit that insured, Claude B. Phipps, was in bad health, both mentally and physically; and (4) that question No. 15 in the application, inquiring as to the existence of physical and mental defects, and question No. 17, inquiring as to the illness or disease with which the assured had suffered for the past three years, had been left blank when plaintiff signed the same for the assured and delivered it to defendant's soliciting agent.Upon motion made by the defendant, notwithstanding the jury verdict, judgment was rendered by the trial court that plaintiff take nothing, and this appeal resulted.

The above application was dated May 30, 1935, the policy issued and was delivered on June 10th, following, to plaintiff, who throughout such transactions was acting for the assured, Claude B. Phipps.The testimony discloses that said Claude B. Phipps was under observation of Dr. Schwenkenberg, county psychiatrist, from May 16 to 24, 1935, his condition being known as general paresis, a disease due to syphilis of the brain; he having had assured under observation some weeks before.Assured had been in bad health a long time following a stroke of paralysis, with treatment for the past several years.About three months before the above dates of observation, assured began to break down, his ailing condition progressing to the extent that lunacy charges were filed on May 16, 1935, when he was placed in confinement.His mind began to fail noticeably at the time, memory bad, with difficulty in talking connectedly, delusions of grandeur and affluence, all typical of advanced stages of paresis.Assured remained in the Dallas county jail, under observation and treatment, until May 24th, when his brothers(plaintiff and another) requested his release for outside treatment, to which they felt that the assured would be more responsive.Later, plaintiff and brother came back to Dr. Schwenkenberg with such adverse reports as to assured's condition that it was deemed advisable to place him in the state hospital at Austin, where he could be restrained and treated, his condition being described as on a rapid decline, obviously worse than in May.Assured was rearrested June 5th on the pending lunacy complaint, and placed in a proper ward of the Dallas county jail.On June 6th, he was tried and adjudged of unsound mind, continuing under restraint until transferred to the Austin state hospital, where he died June 30, 1935.The death certificate that followed certified the principal cause of death was general paralysis of the insane, contributed to by syphilis.Plaintiff had paid $1.20 premium on the policy in question and, on July 3, 1935, executed the following release to the defendant:

"Received of the American National Insurance Company of Galveston, Texas, One 20/100 Dollars, being the full amount of the premiums paid to the Company on and in full settlement, satisfaction and discharge of all my rights, title and interest under policy No. 9079519 issued by the American National Insurance Company of Galveston, Texas, on 6/10, 1935, to Claude B. Phipps.

"Now, therefore, in consideration of the said sum of $1.20 this day paid to me by the said American National Insurance Company of Galveston, Texas, the receipt whereof is acknowledged, I this day acknowledge the same as full settlement, satisfaction and discharge by the said Insurance Company of all its liabilities of whatsoever kind under said policy and my rights thereunder, and do hereby in all things release and discharge said Insurance Company from all further liability under said policy and declare the same fully extinguished.

"In further consideration of the sum referred to herein, it is understood, admitted and agreed that the said insured, Claude B. Phipps, was not in sound health on 6/10/35, the date said policy was issued as necessary thereunder to place liability upon the American National Insurance Company for the Insurance referred to therein.And for the further reasons, which are understood, admitted and agreed to: ____.

"Witness my hand at Dallas, Texas, this 3 day of July, A.D. 1935.Signed in the presence of T. R. Dorcey /S, H. C. Ewing /S. William E. Phipps /S."

At the time the application was signed, defendant's soliciting agents were at the house of plaintiff, collecting for other insurance, and the conversation turned to a lapsed policy on Claude Phipps, as to which the agent suggested a new policy, instead of a renewal.On plaintiff's statement to the agent that he did not think his brother could get much insurance, on account of his health, the agent said, "We are out looking for business this morning," and went on talking about the lapsed policy, and the application for the...