Southern Surety Co. v. Benton

• Decision Date: 10 February 1926
• Docket Number: (No. 740-4332.)
• Parties: SOUTHERN SURETY CO. v. BENTON.
• Court: Texas Supreme Court

280 S.W. 551

SOUTHERN SURETY CO. v. BENTON.

(No. 740-4332.)

Commission of Appeals of Texas, Section A.

February 10, 1926.

Error to Court of Civil Appeals of Fourth Supreme Judicial District.

Action by Jonas A. Benton against the Southern Surety Company. Judgment for plaintiff was affirmed by the Court of Civil Appeals (267 S. W. 302), and defendant brings error. Judgment of both courts reversed, and judgment rendered for defendant.

Barrett & Barrett, of San Antonio, for plaintiff in error.

Carlos Bee and Douglas & Carter, all of San Antonio, for defendant in error.

HARVEY, P. J.

The defendant in error, Jonas A. Benton, sued plaintiff in error, the Southern Surety Company, to recover on a health insurance policy, insured by the latter to defendant in error, described as "Business and Professional Men's Policy," for loss of time resulting from sickness alleged to be covered by the policy. Upon trial before a jury verdict was rendered for defendant in error, and judgment was entered accordingly. The case was appealed to the Court of Civil Appeals for the Fourth District which court affirmed the judgment of the trial court. 267 S. W. 302.

Application for said policy was made by defendant in error on June 19, 1923, and the policy was thereafter issued on said application and delivered to Benton. On July 17, 1923, after issuance and delivery of the policy, Benton became ill from intestinal intoxication and was confined to his bed with said illness for a period of four months, during which time he was unable to follow his occupation or attend to any business. The said application was made in writing to the company through one of its soliciting agents, one J. Y. Harris. The undisputed proof shows that Benton had tuberculosis at the time he made such application, and also when said policy was delivered to him, and because thereof his health was materially unsound.

While testifying as a witness in his own behalf on the trial of this case, Benton admitted that, some four years previous to such application, he had been informed by a doctor, who examined him at that time, that he had tuberculosis, and he further admitted that he had been, during the preceding four years, and still was receiving compensation, from the United States government, as a disabled soldier. In said application, Benton stated, among other things, that, at the time of making same, he was "in sound condition, mentally and physically," and nothing appears in the application to indicate that he had tuberculosis or other physical ailment. Benton, in answer to a question contained in said application, which was duly executed by him, stated that he understood and agreed:

"That the signing of this application does not effect an insurance contract and that the insurance hereby applied for shall not become effective prior to the date and hour set forth in the policy actually issued by the company; such policy thereupon becoming effective if delivered to you (Benton) while you are in good health and free from the effects of any injury, disease or bodily infirmity."

When said policy was issued, the said application was incorporated therein and made part of it. The plaintiff in error, by its pleadings and by proper assignment of error, asserts that because of the above stipulation in the application, which was subsequently incorporated in the policy, no liability ever attached under the policy, since the undisputed proof shows that Benton was not, when the policy was delivered to him, in good health and free from the effects of any injury, disease, or bodily infirmity as provided in such stipulation. The defendant in error relies on estoppel and the waiver of such stipulation by plaintiff in error, because of the fact that the soliciting agent, Harris, was apprised of Benton's real physical condition by the said Benton at the time such application was made.

The case was submitted to the jury on special issues, and, among other things, the jury found that Benton was not in good health and was not free from the effects of any disease, at the time the policy was delivered to him. The jury also found, in effect, that the disease of tuberculosis did not cause or contribute to his sickness for which he seeks recovery herein, and that the soliciting agent, Harris, at the time of such application, knew that Benton had been classified as a tubercular, and was drawing compensation as a disabled soldier because thereof. But, in view of the conclusion we have reached herein, all the findings of the jury become immaterial. At the conclusion of the testimony and before the case was submitted to the jury, the plaintiff in error duly requested the court to instruct the jury peremptorily to return a verdict for plaintiff in error, which request was refused by the court, and plaintiff in error assigns such action of the court as error. We are of opinion that the trial court committed material error in thus refusing to instruct a verdict for plaintiff in error.

A stipulation in a written application for health insurance, which is made a part of the policy subsequently issued thereon, to the effect that such application does not effect an insurance contract, but the policy issued thereon shall become effective if delivered to the insured while he is in good health and free from any injury, disease, or bodily infirmity, is valid. In such a case, if, at the time the policy is delivered to the insured, the latter be afflicted with a disease or bodily infirmity of a substantial nature, which affects his general...