Progressive Life Insurance Co. v. Preston

• Decision Date: 24 May 1937
• Docket Number: 4-4670
• Citation: 105 S.W.2d 549,194 Ark. 84
• Parties: PROGRESSIVE LIFE INSURANCE COMPANY v. PRESTON
• Court: Arkansas Supreme Court

105 S.W.2d 549

194 Ark. 84

PROGRESSIVE LIFE INSURANCE COMPANY v. PRESTON

4-4670

Supreme Court of Arkansas

May 24, 1937

Appeal from Sevier Circuit Court; A. P. Steel, Judge; reversed.

Judgment reversed and cause dismissed.

Alfred Featherston, Duty & Duty and E. M. Arnold, for appellant.

John Owens and Millwee & Goodson, for appellee.

OPINION

BUTLER, J.

On December 8, 1934, Alice Preston made application to the appellant insurance company for a joint policy of insurance on her own life and that of Birdie Walker, each to be the beneficiary of the other. The policy was issued on the 13th day of December, 1934, and shortly thereafter delivered to Alice Preston. On February 12, 1935, Birdie Walker died and upon proof of death being submitted, appellant denied liability. This action followed and was submitted to the court sitting as a jury upon the evidence adduced. There was a judgment in favor of the appellee from which comes this appeal.

There are a number of assignments of error urged for reversal none of which we need notice except the one first argued, namely that under the contract and undisputed proof a verdict should have been directed for the appellant. Among other grounds is the contention that in the application for the policy appellee warranted that Birdie Walker did not have tuberculosis, that she did not then have, and had never had any other disease or mental defect, that she had never been in any hospital or institution of like nature for treatment, that she had not consulted a doctor during the eight months preceding the making of the application and was free from disease at that time.

The pertinent provisions of the policy are as follows:

"Section 7 of Part 13--Proofs satisfactory to the company must be furnished of any accident or disability before approval of payment will be made. No obligation is assumed by this company, nor is this contract effective, prior to the date hereof, nor unless the applicants hereunder are alive and in sound health and all premiums paid on the date of delivery and acceptance by them of this policy."

"Part 16. Consideration. This policy is issued in consideration of the application therefor, the original of which is on file with the company and made a part hereof, payment in advance of an initial premium of two dollars, which provides insurance until the first day of February, 1935, and one dollar for each month's insurance on the first day of each month thereafter, without notice at the home office of the company in Rogers, Arkansas."

It is admitted that the application for the insurance was made without the knowledge or consent of Birdie Walker, who was not a blood relative of appellee. Appellee claims, however, that Birdie Walker was indebted to her in the sum of $ 50 for money borrowed in 1933 and 1934. It is stated by appellee in the application that Birdie Walker was thirty-five years old. The application contained the following:

"5. Have you any of the following diseases? * * * Tuberculosis? Ans. No.

"6. Have any of you ever had, or do you now have, any other disease, physical or mental defect? Ans. No.

"7. Have you gained or lost in weight in the past year? Ans. No.

"8. Have any of you ever been operated on or been under observation, care or treatment in any hospital or sanitorium, asylum or similar institution? Ans. No.

"10. How recently have any of you consulted a doctor and for what reason (give full particulars, name and address of the doctor)? Ans. About eight months.

"15. Are each of you now free from disease or symptom of disease and in perfect health? Ans. Yes.

"17. The above representations as to our physical condition, age, nationality and occupation are warranties and covenants by us and are to be construed as such, are true and correct and are made to enable us to obtain a policy of insurance in the Progressive Life Insurance Company of Rogers, Arkansas. We further covenant and warrant that we have read each of the foregoing questions and answers before signing our names to this application, and each of said answers is set down exactly as stated by us, and the aforesaid statements and answers are full, complete and true in every particular and are the only statements and answers upon which this application is made. * * *

"18. It is hereby provided and mutually agreed between the applicants and the Progressive Life Insurance Company that this application together with the statements, warranties and agreements herein contained, as above set forth and including all appearing on subsequent pages of this form, shall be a part of the contract and that full compliance by the policy-holder with all rules and requirements herein set forth or referred to shall be a condition precedent to any recovery of benefits that may be provided in a policy issued herein.

"25. We agree, on behalf of ourselves and any person who shall have or claim any interest in any policy issued herein, that the company shall not incur any liability upon this application until the policy has been issued by the company and the first premium has actually been paid to and accepted by the company or its authorized agent, and the policy has been delivered to and accepted by us during our lifetime and good health.

"26. The applicants assume the entire burden of making full and true statements and revelation as to their bodily condition and history, and to fully informing themselves with reference thereto before signing and delivering this application * * *.

"28. We hereby expressly waive, on behalf of ourselves and any person who shall have or claim any interest in any policy issued hereunder, all provisions of law forbidding any physician or other person who has attended us, or who may hereafter attend or examine us, from disclosing any knowledge or information thereby acquired by him, and we expressly authorize such disclosure.

"I, the undersigned, whose relationship to applicant is niece, have signed the names of said applicants to this application and in doing so vouch for the truthfulness of all answers to the questions and agree for the applicants to condition made in said application.

"Signed by Alice Walker Preston for applicant."

While the language of the quoted provisions of the policy and application is not literally that of the contract considered in Springfield Life Ins. Co. v. Slaughter, 183 Ark. 692, 38 S.W.2d 13, it is the same in all substantial particulars. The distinction pointed out by the appellee that in the case cited the application was attached to the policy, while in the instant case the original application was retained in the files of appellant company, is unimportant. The essential fact which renders the two contracts of like nature is the provision in both that the application is a part of the contract. In the application the answers to the questions propounded are warranted to be true, full and complete in every particular; that they are made to obtain the policy of insurance and that the said statements "shall be a condition precedent to any recovery of benefits that may be provided in the policy issued" thereon. Further, the applicants "vouch for the truthfulness of all answers to the questions and agree for the applicants to conditions made in said application."

As is said in the case cited, supra, "The provisions of the policy set out above clearly made the answers relating to the health of the insured warranties and not mere representations. They were in the nature of an absolute agreement and not statements of belief." The doctrine of the cited case finds support in Cunningham v. National Americans, 123 Ark. 620, 185 S.W. 786, and Royal Neighbors of America v. Tate, 186 Ark. 1138, 57 S.W.2d 1055.

Under the contract, the only question to be determined here is the truthfulness or untruthfulness of the answers made to the questions propounded in the application. It conclusively appears that the answers were false. Six disinterested witnesses who knew and had opportunity to observe Birdie Walker in the...