GRAVES, Justice.
This litigation was here once before; it then came under the style of Driscoll v. Casstevens, upon original applications for writs of prohibition, growing out of rival claims as to which of two district courts had jurisdiction over the controversy; this court's opinion, based on a holding that the district court of Harris County had jurisdiction, is reported in Tex.Civ.App., 110 S.W.2d 958.
Its present appearance, under the style given it supra, is through an appeal by the
Insurance Companies from a $2,875 judgment—$2,500 principal, $375 interest—in favor of appellee against appellant Texas Standard Life Insurance Company, upon its $5,000 certificate of membership No. 15,578, issued November 1, 1933, in appellee's favor, on the life of her deceased husband, entered pursuant to a jury trial, the issues of fact and verdict in which were these:
"No. 1: Do you find from a preponderance of the evidence that during the year 1935, the plaintiff maintained a class or group of membership styled `S.R.'?" To which the jury answered: "Yes".
"No. 2: Do you find from a preponderance of the evidence that W. H. Casstevens, at the time of his death, was being carried by the plaintiff under class or group `S.R.'?" To which the jury answered: "Yes".
"No. 3. Do you find from a preponderance of the evidence that the condition of the blood-pressure of W. H. Casstevens on November 1, 1933, materially increased the risk assumed by the Texas Standard Life Insurance Association in the policy issued of that date?" To which the jury answered: "No".
"No. 4. Do you find from a preponderance of the evidence that W. H. Casstevens made the statement in the application dated October 31, 1933, to the effect that he had not had and had not been told that he had high blood-pressure, with the intent to deceive the Texas Standard Life Insurance Association?" To which the jury answered: "No."
"No. 5. Do you find from a preponderance of the evidence that W. H. Casstevens was not in good health on November 1, 1933?"
"The term `good health' as used hereinabove does not mean perfect health; it does not mean absolute perfection, but good health in the construction of life insurance policies means a state of health free from any disease or ailment that affects the general soundness and healthfulness of the system seriously. That is, it means that the insured be not afflicted with a disease or bodily infirmity of a substantial nature, which affects the insured's general health, or which materially increases the risk to be assumed by the insurer." To which the jury answered: "He was in good health."
The appellants inveigh in this court against such adverse determination below at great length and upon many contentions, the major ones of which, however, are these two: (1) the certificate sued upon was void ab initio, because the insured, W. H. Casstevens, appellee's deceased husband, untruly warranted in his application for the membership certificate that he was then in good health, and that he had never suffered from, nor been told that he had, either heart-disease or high blood-pressure; (2) the insured having died within one year from two reinstatements of the certificate, or policy, after it had lapsed, and the policy having been subject to the provisions of "Group A" therein, instead of "Group S. R.", as found by the jury, the beneficiary in no event, even if the policy had been validly outstanding at all, was entitled to receive more than $225.34.
The appellee, upon the other hand, in answer, defends the judgment so rendered in her favor, and asserts it should be affirmed upon these, among other, considerations:
"First, because of the decision of Bankers Life & Loan Ass'n v. Jayroe, Tex.Com. App., 127 S.W.2d 291, the appellant under the facts of this case must be exempted from the General Insurance Statutes.
"Second, because of the provisions in the policy providing that misstatements must materially increase the risk, any misstatements in the application cannot be treated as warranties.
"Third, the amendment to the By-laws dated December 9, 1929, is invalid because not adopted by a majority of the members or approved by the Board of Insurance Commissioners.
"Fourth, the amendment to the By-laws of March 17, 1930, is invalid because not ratified by the Board of Directors nor approved by the Board of Insurance Commissioners.
"Fifth, the By-laws effective November 1, 1933, provided misstatements in the application must be made with intent to defraud and would control the provisions in the application.
"Sixth, the provisions in the policy that it would be void if the misstatement materially increased the risk, would control provisions in the by-laws dealing with that subject, which were less favorable to the insured than the provisions in the policy.
"Seventh, because there was no provision of the By-laws or action of the Board of Directors placing Mr. Casstevens'
policy in any group, club or class, the appellant had no right to limit its liability on account or his death to what one assessment on the membership of any particular group, club or class would produce.
"Eighth, the jury under the evidence was justified in finding that Mr. Casstevens was carried in Class or Group `S. R.'
"Ninth, the policy never terminated and no reinstatement was necessary because there was no evidence that the ten days' notice, required by the policy in order to terminate the policy, was ever given, either as applied to the July or August, 1934, assessments.
"Tenth, the jury under the evidence was justified in finding that Mr. Casstevens was in good health at the time he made the application."
Appellants' position on the controlling features of the whole cause is less voluminously set forth in this summation from their brief:
"It has been so frequently held by our various courts that the general laws of this state relating to old-line reserve life insurance companies have no application to local mutual aid associations and statewide life insurance companies writing life insurance upon a mutual plan, but that such of said two classes of insurance are respectively covered by separate statutory laws of the State of Texas, that additional authorities in support thereof should be wholly unnecessary. Such was the opinion of the Supreme Court in Houston Life Insurance Company v. John William Franklin Dabbs, 125 S.W.2d 1041. The provisions of the general insurance laws with respect to penalties, interest, and attorney's fees were, in the Dabbs case, held to have no application to an insurance policy such as that sued upon in this case. It was further there held that an insurance company could not change the nature of its business from that set forth in its charter and permit to do business by assuming to do business of a character which, under the law, only a general reserve life insurance company could do, or which only an accident company could write. Is there any reason why our appellate courts should not hold the same to be true with respect to the statutory law relating to policies issued upon applications by general reserve old line life insurance companies, when such law is applied to applications for, and policies of insurance issued by, a local mutual aid association which is taken over and operated by a state-wide mutual life insurance company? Certainly in the case of Modern Order of Praetorians v. Davidson, heretofore cited, Tex.Civ.App., 203 S.W. 379, it is shown that our courts will not apply the statutory law applicable to general old line legal reserve life insurance companies to a fraternal benefit association, nor to an application for insurance and an insurance policy issued by a fraternal benefit society (Articles 5043 and 5045). Is there any more reason to apply the general insurance laws of the State of Texas to a local mutual aid association policy and application for policy than there is to apply said Articles 5043 and 5045 of the general insurance law to an application for a policy in, and to a policy issued by, a fraternal benefit association? We can see none. Furthermore, our courts have repeatedly declared the law to be the same as declared at common law with respect to false statements contained in applications for insurance, unless the Legislature, by express statute applicable to that particular application and policy of insurance issued thereon, has declared the law to be other than same exists at common law. In other words, at common law, the policy of insurance issued to Casstevens is utterly void, because of the misrepresentations contained in his application therefor and the breach of his warranty that same were true. There is no statutory law in Texas having application to such an application that in any wise changes the rules of common law.
"It is wholly immaterial whether said representations were made by Casstevens unintentionally and without purpose to deceive, or were intentionally made for the purpose of defrauding the insurance company issuing such policy and the insurance company assuming the obligation of the issuer of such policy; under the undisputed evidence in this case the insured was suffering from heart-disease and high blood-pressure, (1) at the time he made said application for insurance, (2) at the time said application was received, approved, and the policy of insurance...
