Southern National Insurance Co. v. Heggie
| Decision Date | 18 October 1943 |
| Docket Number | 4-7130 |
| Parties | Southern National Insurance Company v. Heggie |
| Court | Arkansas Supreme Court |
Appeal from White Circuit Court; E. M. Pipkin, Judge.
Affirmed.
Harry Neelly, for appellant.
Yingling & Yingling, for appellee.
On April 4, 1940, Letha E. Heggie, wife of appellee, William E. Heggie, signed an application to the appellant, Southern National Insurance Company, for a policy of life insurance, in the sum of $ 500, naming her husband as beneficiary. A policy, in accordance with this application was issued by appellant on April 15, 1940, and delivered to the insured by mail on or about that date. Mrs. Heggie died on July 28, 1942. Demand for payment of the amount of the policy having been refused, this suit was instituted in the lower court by appellee against appellant to recover the amount of the policy, together with the statutory penalty and attorney's fee.
Appellant in its answer admitted the issuance of the policy, the payment of premiums thereon, and the death of the insured, but denied liability on the ground that Mrs. Heggie, in her application for the policy, had stated that she was then in sound health and had had no illness during the previous years, when in truth she was at that time suffering from tuberculosis and had been treated for this disease in the years 1939 and 1940, and that by the terms of the application, which was a part of the policy sued on, it was provided that the policy would be void unless the insured was in good health at the time the policy was delivered, and it was alleged that Mrs. Heggie was not in good health at the time of the delivery of the policy. Appellant, prior to the institution of the suit, had made tender to appellee of the premiums paid on the policy, which tender was renewed in the answer. A trial before a jury resulted in a verdict in favor of appellee, and from the judgment rendered thereon this appeal is prosecuted.
Appellant urges three grounds for reversal: (1). that the lower court should have peremptorily instructed the jury to return a verdict in favor of appellant, because the evidence showed a breach of the warranties contained in the application for the policy of insurance; (2) that error was committed by the lower court in refusing to instruct the jury that they should return a verdict in favor of appellant if the evidence established that the insured was not in good health at the time of the delivery of the policy; and (3) that the lower court erred in denying to counsel for appellant the right to open and close the argument to the jury.
The application for the policy of insurance sued on herein was taken by L. L. Branscum, a soliciting agent for appellant. There were thirty-four questions in all contained in this application. Among other questions and answers appearing therein were:
It was admitted that Mrs. Heggie had, in the fall of 1939, suffered from tuberculosis, and that she had gone to the State Tuberculosis Sanatorium at Booneville where, after examination by one of the staff physicians there, she was told that she had pulmonary tuberculosis. She did not remain in the sanatorium for treatment, but returned to her home. Her family physician testified that she improved rapidly from her tubercular condition, and that her death was not caused by that disease, but resulted from peritonitis. Her husband testified that after she returned from the sanatorium she "followed directions and improved"; that she had never been bedfast, and that when the application for her insurance was taken she was "in as good health as she ever was," and "she was heavier than she ever was"; that "she did her house work, milked cows, hoed cotton and picked cotton, and that she was sick only about two weeks before her death."
The testimony of witnesses on behalf of appellee, which the jury accepted as true, was to the effect that when the agent took the application for insurance from Mrs. Heggie he wrote down the answers himself and had Mrs. Heggie to sign the application without reading it over, and that, when the question as to whether or not she had ever had tuberculosis was asked, the agent was told that she had been afflicted with this disease and was told that she had gone to the Booneville Sanatorium in 1939, and there had an examination which disclosed the existence of pulmonary tuberculosis.
While the agent testified that he wrote down the answers correctly as given to him, he did not deny that he was told about Mrs. Heggie having had tuberculosis, and, in answer to a question as to whether or not Mr. and Mrs. Heggie both told him about her having had tuberculosis and having gone to Booneville and having had an examination the agent merely answered "I don't recollect that." He further testified that he did not read over the application to Mrs. Heggie after he wrote the answers down. When asked if Mrs. Heggie's daughter did not tell him that her mother had had tuberculosis, and if he had not told this daughter that Mr. and Mrs. Heggie had informed him about her having had tuberculosis, and that he was going to advise the company about it and leave it up to the company about issuing the policy, he did not deny making that statement, merely saying: "I don't recollect saying that." At the bottom of the application appeared a certificate, signed by the agent, to the effect that he had seen the applicant and had made "local inquiry and investigation" with regard to the applicant, and that he believed her to be in sound health. The application was not attached to the policy, though by the terms of the policy it was made a part thereof. The policy was issued without medical examination of the insured.
Among other instructions the following were given by the lower court: No. 1. "You are instructed that if you find and believe from a preponderance of the evidence in this case that the plaintiff or his wife, Letha E. Heggie, at the time the application for the insurance policy sued on in this action was made, truthfully answered the questions propounded to them, by the agent of the defendant, insurance company, as to the condition of the health of the said Letha E. Heggie, and in answering said questions told him that the said Letha E. Heggie had had tuberculosis prior to that time; and that said agent filled out the application for said insurance and insured signed same without reading it or having it read to them, under the belief that the answers they had given to the questions asked them by said agent had been correctly and truthfully answered in said application, then the defendant, insurance company, is presumed to have had the information given by them to said agent in answer to said questions, when it issued the policy sued on and the plaintiff is entitled to recover in this action notwithstanding the fact that you may further find that the application for said insurance policy did not disclose the true condition of the health of the said Letha E. Heggie at the time prior thereto."
No. 2. "You are instructed that if you find and believe from a preponderance of the evidence in this case that the insured truthfully answered the questions asked her by the agent of the defendant, insurance company, and that said agent wrote the application for the insured, she had a right to rely upon the agent to correctly write the answers she gave to the questions propounded to her and the defendant, insurance company, is bound by the action of its agent in failing to correctly and truthfully write the answers to said questions unless you further find and believe from the evidence that the insured knew at the time she signed the application that her answers to such questions had not been correctly and truthfully answered therein."
It has been frequently held by this court that, where an applicant for insurance makes to the agent of the insurer a full disclosure of the facts inquired about in the application, but the agent fails to write down the answers of the applicant correctly, and the applicant is permitted by the agent to sign the application without reading it or hearing it read, the knowledge of the agent as to the physical condition of applicant is imputed to the company and, if a policy is issued on such an application, the company is estopped in an action on said policy to set up the falsity of the answers in the application.
The rule is thus stated in the case of Union Life Insurance Company v. Johnson, 199 Ark. 241, 133 S.W.2d 841 (headnote 2): "Where the facts have been truthfully stated to the soliciting agent, but, by fraud, negligence or mistake, are misstated in the application, the company cannot set up the misstatements in avoidance of its liability, if the agent was acting within his real or apparent authority and there is no fraud or collusion upon the part of the assured."
In the case of American National Insurance Co. v Hale, 172 Ark. 958, 291 S.W. 82, it was said: ...
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