Pioneer Am. Ins. Co. v. Meeker

• Decision Date: 08 March 1957
• Docket Number: No. 15795,15795
• Citation: 300 S.W.2d 212
• Parties: PIONEER AMERICAN INSURANCE COMPANY, Appellant, v. Julian R. MEEKER, Appellee.
• Court: Texas Court of Appeals

Page 212

300 S.W.2d 212

PIONEER AMERICAN INSURANCE COMPANY, Appellant, v.Julian R. MEEKER, Appellee.

No. 15795.

Court of Civil Appeals of Texas, Fort Worth.

March 8, 1957.

Rehearing Denied April 5, 1957.

McDonald, Sanders, Nicholas, Ludlum, Wynn & Ginsburg, and J. Olcott Phillips, Fort Worth, for appellant.

Thompson, Walker, Smith & Shannon, K. K. Smith, Jr., and Joe E. Gracey, Fort Worth, for appellee.

BOYD, Justice.

This is an appeal from a judgment denying the petition of appellantPioneer American Insurance Company to cancel an insurance policy on the life of appelleeJulian R. Meeker.

In January, 1955, appellee made application to appellant for a policy of insurance on his life in the amount of $50,000.The application was in writing, and represented that no physician in the past five years had found appellee's blood pressure above normal, and that Dr. Jack Furman was the last physician appellee had consulted.About January 27, 1955, appellant delivered to appellee a policy effective January 13, 1955, in the amount of $50,000, and the first year's premium was paid.On March 16, 1955, appellant wrote to appellee stating it had learned that the representations set out above were not correct, that the policy would not have been issued had correct statements been made in the application, and that 'As far as we are concerned this policy is cancelled and we are no longer obligated upon the same.'Appellant enclosed its check for the amount of the premium which appellee had paid, and asked that the policy be returned to it.Appellee refused to accept the return of the premium and did not return the policy.This suit was filed on June 2, 1955, at which time appellant deposited in the registry of the court an amount equal to the premium, to be paid to appellee.

The jury found that: the representations were false, were material to the risk, and were relied upon by appellant; appellee did not know that they were false when he made them; they were not made with intent to deceive appellant; appellee could not have known by the exercise of ordinary diligence that any physician in the past five years had found his blood pressure above normal; he could have known by the exercise of ordinary diligence that the representation that Dr. Furman was the last physician he had consulted was false; appellant was in possession of facts sufficient to put it on notice as to the truth or falsity of the representations; appellant made an independent investigation of the facts; appellee did not hinder the investigation; appellant did not rely solely on its independent investigation; appellee failed to mention his examination in the past five years by a physician other than Dr. Furman, in answer to a question in the application, because his attention was not particularly called to the question.

Disposition of the appeal requires construction of Article 3.44, subd. 4, V.A.T.S.Insurance Code, which provides: 'That all statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties.'

It is appellant's contention that Article 3.44, sec. 4, does not apply to insurance contracts sought to be cancelled before the maturity of any claim thereon, when the parties can be restored to the previous status quo.So far as we know, the point has not been passed upon.

The word 'fraud' in the Article has been construed to mean a misrepresentation made wilfully and with intent to deceive.American Central Life Ins. Co. v. Alexander, Tex.Com.App., 56 S.W.2d 864.And it seems to be settled that a representation of the insured cannot be interposed as a defense to a suit upon a policy unless it be shown that the misrepresentation was made wilfully and with intent to deceive the insurer, and that it was material to the risk and relied upon by the insurer.Gorman v. Jefferson Standard Life Ins. Co., Tex.Civ.App., 275 S.W. 248;American Central Life Ins. Co. v. Alexander, supra;Colorado Life Co. v. Newell, Tex.Civ.App., 78 S.W.2d 1049;National Life & Accident Ins. Co. of Nashville, Tenn. v. Kinney, Tex.Civ.App., 282 S.W. 633;Great...