Washington Fidelity Nat. Ins. Co. v. Smith, 4608.

• Decision Date: 31 January 1935
• Docket Number: No. 4608.,4608.
• Parties: WASHINGTON FIDELITY NAT. INS. CO. v. SMITH.
• Court: Texas Court of Appeals

80 S.W.2d 413

WASHINGTON FIDELITY NAT. INS. CO. v. SMITH.

No. 4608.

Court of Civil Appeals of Texas. Texarkana.

January 31, 1935.

Rehearing Denied February 7, 1935.

Appeal from Titus County Court; A. J. Luna, Judge.

Action by Beulah Smith against the Washington Fidelity National Insurance Company. From a judgment in favor of plaintiff, defendant appeals.

Affirmed.

J. A. Ward, of Mt. Pleasant, for appellant.

Sam Williams, of Mt. Pleasant, for appellee.

HALL, Justice.

On February 15, 1930, appellee made application to the appellant for policy of health and accident insurance. This application was made through Mr. E. V. Thorpe of Dallas, Tex., general agent of appellant, and Mr. W. H. Seay, local agent of appellant. On February 21, 1930, the appellant delivered its policy of insurance to appellee whereby it agreed to compensate the appellee for sickness or accident which incapacitated her from performing her duties and compelled her to "remain within the house."

Appellee was taken ill with appendicitis on July 20, 1932, and was carried to the home of her brother, Dr. A. A. Smith, in Talco, Tex., where she remained until the 16th day of August, 1932, when she was removed by Dr. Smith to the Sanitarium of Paris at Paris, Tex. An operation was performed on her at Paris on August 17, 1932, and she remained continuously in said sanitarium until September 4, 1932, when she was again taken to the home of Dr. Smith at Talco, where she remained for about a week. She was then carried to her home, that is, the home of her mother, in the same town where she had been living prior to her illness. She remained in her mother's home until the 19th of September, when she began to teach school. During the time she was at her brother's home and at her mother's home she visited the surface toilet as it became necessary. On some occasions she was assisted to said toilet and at others she went alone. On two occasions she went from her home a short distance to town in a coupé. On each of these occasions she was accompanied by her brother, Dr. Smith.

Proper proofs were made by appellee to appellant of her sickness, and some time later it forwarded to her a check for a lesser amount than she claimed, which check was refused. The attorney for appellee gave the required statutory notice to appellant demanding payment in full for said sickness, said amount demanded being $248.36, which was for total disability from July 20, 1932, to September 19, 1932, and the extra amount due under the policy for the time she remained in the Sanitarium of Paris, which amount was refused, and this lawsuit resulted. Appellee brought her suit for the principal sum of $248.36, together with $100 attorney's fee, and 12 per cent. penalty.

The appellant answered denying liability alleging that appellee had made false answers to questions Nos. 11 and 13 in her application for insurance, which false answers were material to the risk of insurance, alleging further that by express terms the application was made a part of the insurance contract.

Question No. 11 in said application is as follows: "Has any application for health, accident or life insurance ever made by you been declined, or any policy of insurance cancelled or renewal of any kind refused by any company, association, or society?" Answer: "No."

Question No. 13 is as follows: "Have you been disabled by either accident, or illness or received medical or surgical attention during the last ten years? If so, when, for what and duration." Answer: "In January, 1929, for flu lasting two weeks. In January, 1929, for cold settled in ear, lasting three weeks. Was drained, fully recovered."

Appellee answered appellant's contentions by alleging that she gave to the general agent of appellant, Mr. Thorpe, who wrote the answers to the questions in the application, the correct answer to question No. 11, stating that in 1926 she had had a controversy with another insurance company about a claim which resulted in her calling on the company to cancel the policy and return to her the unearned premium. She alleged further that she correctly answered question No. 13 by stating that in 1926 she had had diarrhea and that the appellant's general agent, Mr. Thorpe, in the presence of her brother, Dr. Smith, and Mr. W. H. Seay, appellant's local agent, stated that the answers to said questions were immaterial.

A trial was had to a jury, and upon special issues answered favorably to appellee, the trial judge awarded judgment for appellee in the principal sum of $248.36, $75 attorney's fee, and 12 per cent. of said claim, or $29.80 penalty, a total of $353.16 with 6 per cent. interest.

In the first and third assignments of error appellant strenuously insists that the trial court erred in permitting the appellee and Dr. Smith to testify that at the time the application was executed she told General Agent Thorpe in the presence of Local Agent Seay that she had had a disagreement with a certain health and accident insurance company over a claim and had requested that her policy with that company be canceled; and, further, in answer to another question that she, in the presence of Dr. Smith and Local Agent Seay, told General Agent Thorpe that in 1926 she had suffered for a short time with diarrhea. Objection was made that this testimony varied the terms of the written contract of insurance, and was therefore inadmissible. Article 5045 of the Revised Statutes of Texas states: "No recovery upon any life, accident or health insurance policy shall ever be defeated because of any misrepresentation in the application which is of an immaterial fact and which does not affect the risks assumed." In the case of Commercial Casualty Ins. Co. v. Hamrick (Tex. Civ. App.) 60 S.W.(2d) 247, 250, Judge Looney, speaking for the court, with reference to incorrect answers in an application for insurance, makes the following observation: "However, the evidence shows that Mr. Lankford was, not only a soliciting, but, in fact, was a general agent; that, in taking plaintiff's application for and delivering the policy, Lankford's counter signature as an `authorized representative' of defendant, was the final and effective act that consummated the insurance contract, and, when delivery of the policy was made, Lankford acted with full knowledge of the history of plaintiff's prior injury, and of the then condition of his leg and health; hence, Lankford's knowledge of these facts will be imputed to the defendant. Plaintiff answered, truthfully, all questions propounded by Lankford, and besides, at that time, Lankford personally examined plaintiff's leg, and, if the application fails, in any respect, to disclose a material fact, or contains misstatements with reference to any material matter, the fault or dereliction is that of the agent and not of plai...