Roosth v. American General Life Ins. Co.
| Decision Date | 01 December 1959 |
| Docket Number | Nos. 7128,7129,s. 7128 |
| Citation | 330 S.W.2d 652 |
| Parties | Rosa Lee Leaman ROOSTH, Trustee and Next Friend, Appellant, v. AMERICAN GENERAL LIFE INSURANCE COMPANY, Appellee. Rosa Lee Leaman ROOSTH, a Widow, Appellant, v. AMERICAN GENERAL LIFE INSURANCE COMPANY, Appellee. |
| Court | Texas Court of Appeals |
Spruiell, Lowry, Potter, Lasater & Guinn, Tyler, for appellant.
Ramey, Brelsford, Hull & Flock, Tyler, for appellee.
These suits are by the beneficiaries of two insurance policies to enforce collection of the policies and recover penalty and attorney's fees. The judgments of the trial court denied a recovery against the insurance company and such judgments are affirmed.
Two separate insurance policies are involved and separate suits were filed in the trial court, by consent they were tried together pursuant to Rule 174, Vernon's Ann.Texas Rules, and the appeal reaches this court from separate judgments, but here, as in the trial court, both cases are consolidated for disposition. The common questions of law and fact being so similar, reference to the policy or the case will include both, unless the context indicates otherwise.
The case was assigned in regular order and a tentative opinion submitted with which the majority is not in agreement. The majority would affirm the case but are not in agreement upon the precise grounds therefor and separate opinions are being prepared. In an effort to economize space, I am assuming that Justice DAVIS' tentative opinion will become a dissent and together with Justice FANNING'S opinion will record a part of the appellate review. In an effort to avoid repetition of facts and excerpts from the record and authorities found in these two opinions, I am reducing my statement to the bare essentials necessary to an understanding of the questions discussed.
In my view, Rule 274, V.A.T.R., is involved and the case turns upon the question of whether or not an objection made to a definition given by the trial judge to the jury in the course of its deliberations is sufficient as an objection to the court's failure to submit a fact issue. However, I see no way of discussing this question in an understandable way without reciting some of the facts and circumstances of the cases.
Dr. Harold Roosth, a highly-respected physician of Tyler, Texas, on two occasions applied to American General Insurance Company for life insurance. Following the applications of the assured the insurance company on March 21, 1955, issued policy No. 109,680 in the sum of $10,000 with Rosa Lee Leaman Roosth as beneficiary; and on December 9, 1956, issued policy No. 135,404 in the sum of $50,000 payable to Rosa Lee Leaman Roosth as trustee for Thomas Malcolm Roosth, Cynthia Ann Roosth, and Marleen Samea Roosth. Less than two years after issuance of the first policy, on February 7, 1957, Dr. Roosth died suddenly at the end of an uneventful business day while seated at his office desk.
The insurance company declined to make payment on the policies and the suits were instituted. It defended by denying liability generally and setting up a number of affirmative defenses, including the defense that Dr. Roosth in his written application made false statements and misrepresentations of the facts about the state of his health, previous physical examinations and consultations with physicians regarding his health and physical condition, and the cause of the death of his mother. Special issues were submitted to the jury, some of which were found favorably to Dr. Roosth and some for the insurance company. Five sets of issues submitting the various allegations of fraud were found in favor of the insurance company. It is upon the findings of fact made by the jury to these fraud issues that the trial court rendered a take-nothing judgment. No complaint is made that the jury's verdict upon these issues was not supported by the evidence. The findings in this regard are as final and binding upon this court as they were upon the trial court and there is no need to discuss the evidence which led the jury to make its findings.
For the purpose of this discussion, the fraud issues 40 to 44 on the $10,000 policy and 69 to 73 on the $50,000 policy will be referred to. Only one set of the issues will be discussed since they are the same as the others with one set applying to one policy and the second set to the other. In this series the jury found Dr. Roosth's answer in his application that childbirth was the cause of his mother's death as false; that he knew or should have known that such answer was false; and that he made such answer willfully and with intent to induce the insurance company to issue the policy; that such false answer was material to the risk insured against; and that the insurance company issued and delivered the policy in reliance upon the false answer. No objection was made by the Roosth beneficiaries that this series of fraud issues did not inquire if the answer by Dr. Roosth that his mother died of childbirth was made willfully and with design to deceive or defraud the insurance company.
After the jury retired to deliberate, the foreman addressed this written communication to the trial judge:
The trial judge instructed the jury as follows:
'The term 'willfully and with intent to induce' means 'voluntarily and intentionally for the purpose of influencing or persuading."
Counsel for the beneficiaries objected to the instruction in this language:
'Plaintiffs object to the definition of 'willfully and with intent to induce' because it fails to include the element of wrong-doing or deceit as distinguished from good faith.'
It is the position of the policy beneficiaries that:
In answer the insurance company states 'if the insured knew that the statements were false and if he made them voluntarily and intentionally for the purpose of persuading the insurer to issue the policies therein sued upon, then it necessarily follows, as a matter of law, that such statements were made with the intent to deceive the insurer.' The company further asserts that no controverted fact issue on intent to deceive was made by the evidence.
I have reached the conclusion that the evidence raises a controverted fact issue respecting Dr. Roosth's conscious intent to deceive the insurance company. An analysis of Clark v. National Life & Accident Ins. Co., 145 Tex. 575, 200 S.W.2d 820; Washington National Ins. Co. v. Anderson, Tex.Civ.App., 94 S.W.2d 263; wr. dis.; Great Southern Life Ins. Co. v. Doyle, Tex.Com.App., 136 Tex. 377, 151 S.W.2d 197; Vann v. National Life & Accident Ins. Co., Tex.Com.App., 24 S.W.2d 347; Coxson v. Atlanta Life Ins. Co., 142 Tex. 544, 179 S.W.2d 943; American Central Life Ins. Co. v. Alexander, Tex.Com.App., 56 S.W.2d 864; Imperial Life Ins. Co. v. Cartwright, Tex.Civ.App., 119 S.W.2d 683, n. w. h.; and General American Life Ins. Co. v. Martinez, Tex.Civ.App., 149 S.W.2d 637, wr. dis., judgm. cor., leads me to the conclusion that the burden was on the insurance company to plead and prove that Dr. Roosth's statement of the cause of his mother's death must have been made with the design to deceive the insurance company and unless the fact of such issue is established as a matter of law, it should have been submitted for jury determination. Bearing in mind, however, that under Rule 279 1 Dr. Roosth's beneficiaries' failure to properly object, if they did fail, waived its submission and the issue is now to be regarded as having been tried by the court. And in the light of the judgment, if there was a failure to object, the issue must be presumed to have been found by the court favorably to the insurance company.
Rule 274 directs that a party objecting to a charge point out distinctly the matter to which he objects and the ground of his objection. It appears to me that no reasonable construction of the objection the Roosth beneficiaries made to the definition of 'willfully and with intent to induce' amounts to or is the equivalent of an objection to the court's failure to submit the issue of Dr. Roosth's conscious intent to deceive. Nor does it seem reasonable to me that the objection made is calculated to put the trial judge and opposing counsel on notice that complaint is made because the charge does not elsewhere submit the particular fact issue of conscious deceit. Its reasonable construction can only be that complaint is being made because the definition is not comprehensive enough to include the element of deceit in the issue to which it refers.
The question arises, in this connection, of whether or not the fact issue of conscious deceit and the fact issue of intent to induce the insurer to issue a policy are two separate ultimate issues or only one. I think it cannot reasonably be said that conscious intent to defraud an insurer is the same question as intent to induce the insurer to issue a policy. Some element of bad faith must be present in a factual situation supporting a conscious deceit finding; but an intent to induce the issuance of a policy could be gathered from a factual situation in which bad faith and wrongdoing are entirely absent. I understand Clark v. National Life & Accident Ins. Co., supra, American Central Life Ins. Co. v. Alexander, Tex.Com.App., 56 S.W.2d 864, and Gorman...
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