Wright v. Federal Life Ins. Co.

• Decision Date: 21 February 1923
• Docket Number: (No. 387-3667.)
• Citation: 248 S.W. 325
• Parties: WRIGHT v. FEDERAL LIFE INS. CO.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Supreme Court

248 S.W. 325

WRIGHT v. FEDERAL LIFE INS. CO.^*

(No. 387-3667.)

Commission of Appeals of Texas, Section A.

February 21, 1923.

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

Action by Mrs. E. Leo Wright against the Federal Life Insurance Company. Judgment for plaintiff was reversed and rendered for a limited sum by the Court of Civil Appeals (230 S. W. 795), and plaintiff brings error. Affirmed.

Carden, Starling, Carden, Hemphill & Wallace, of Dallas, for plaintiff in error.

Cockrell, Gray, McBride & O'Donnell, of Dallas, for defendant in error.

GALLAGHER, P. J.

Mrs. E. Leo Wright sued the Federal Life Insurance Company on a policy of insurance on the life of her deceased husband, Robert W. Wright, in which policy she was beneficiary. The parties are designated as in the trial court. Among other defenses defendant pleaded that at the time the insured signed the application for said insurance, at the time he paid the premiums therefor, and at the time the policy was delivered to him he was afflicted with consumption, or tuberculosis of the lungs; that in answer to questions propounded to him in said application he stated in substance that he was in good health, that he had never had consumption or any serious illness, that in the last five years he had consulted one physician, and that consultation was the week before, for a cold in the head; that all such answers were false, and fraudulently made for the purpose of securing the policy sued on. Defendant also pleaded that said application contained, among other provisions, the following:

"I agree that each and all of the statements and answers contained in this application, consisting of parts I and II, are full, true and complete in every respect, and are offered to said company as a consideration for a contract of insurance, which shall not take effect until the policy shall have been actually delivered to me and the first premium shall have been actually paid during my life and while I am in good health."

Defendant also pleaded that, by reason of the facts set out in its answer, no valid contract of insurance was ever effected, and tendered into court the premium paid by the insured.

Plaintiff, in a supplemental petition filed in reply thereto, admitted that insured had consumption at the time he signed said application, but alleged that he was ignorant of such fact, and made the answers complained of in good faith, and that he was in the same condition of health at the time the policy was delivered as when he signed such application.

There was a trial before a jury. In response to special issues the jury found that the insured at the time he signed the application did not know that he had consumption or tuberculosis of the lungs, and that his statement in said application that he had consulted a physician for "cold in the head" was not made willfully, nor with intent to deceive. Upon these findings the court entered judgment for plaintiff. The case was carried to the Court of Civil Appeals, and that court reversed the judgment of the trial court and rendered judgment for plaintiff for the premium paid, and for that sum only. 230 S. W. 795. Plaintiff applied to the Supreme Court for writ of error, alleging that the decision of the Court of Civil Appeals was in conflict with various decisions of that court and other courts, and especially with a prior decision of that court in the case of Insurance Co. v. Rowell (Tex. Civ. App.) 175 S. W. 170. The Supreme Court granted the writ applied for on the ground of conflicts in decisions.

The application was made on the 25th day of September, 1915; the policy was issued on the 9th day of October following, and subsequently delivered to the insured, but the time and circumstances of the delivery are not shown. The application contained the provision above quoted. The policy contained a provision that it, together with the application, constituted the entire contract, and that the statements of the insured in the absence of fraud should be deemed representations, and not warranties. It was by its terms incontestable after two years, except for nonpayment of premiums. A photographic copy of the application was attached thereto. The proof showed that in July, 1915, the insured was under the care of a physician, and at the request of such physician furnished a specimen of his sputum for examination by a specialist; that such examination disclosed the presence of tubercular baccilli therein; that insured was so advised by his physician, and further advised that he had consumption, or tuberculosis of the lungs, and that he continued under the treatment of such physician until after his application for the policy sued on. The proof further showed that he was in an advanced second stage of this disease at the time of said application, and that he continuously grew worse, and died therefrom on July 8, 1916.

The Court of Civil Appeals held that the evidence showed with such certainty that reasonable minds could not differ in the conclusion that the insured did know at the time the policy sued on was delivered to him that he had tuberculosis of the lungs. Said court further held from the admissions of plaintiff in her pleadings and from the uncontradicted evidence in the case that the insured had tuberculosis of the lungs when said policy was actually delivered to him; that by reason of said fact and the stipulation in the application above quoted said policy never took effect nor became a binding obligation against defendant. This holding is assigned as error in the application.

A stipulation in an application for a policy of life insurance, which is made a part of the policy subsequently issued thereon, that such policy shall not take effect unless the same is actually delivered to the insured, during his life, and while he is in good health, is except as restrained or forbidden by some statute, valid and enforceable. If the insured is at the time of the delivery of such policy actually afflicted with a disease which continues and ultimately causes his death, according to the weight of authority, it is immaterial whether such condition existed at the date of his application or arose between that date and the delivery of the policy, or whether the insured knew his condition in that respect or not. In such cases such condition of health on the part of the insured at the time of the actual delivery of the policy is a defense to an action thereon, unless a valid waiver of such stipulation is shown. 14 R. C. L. p. 900, § 78; Mutual Life Ins. Co. v. Willey, 133 Md. 665, 106 Atl. 163; Murphy v. Metropolitan Life Ins. Co., 106 Minn. 112, 113, 118 N. W. 355; Metropolitan Life Ins. Co. v. Betz, 44 Tex. Civ. App. 557, 99 S. W. 1140; Security Mutual Life Ins. Co. v. Calvert, 39 Tex. Civ. App. 382, 87 S. W. 889; American Nat. Ins. Co. v. Anderson (Tex. Civ. App.) 179 S. W. 66, 67; Logan v. New York Life Ins. Co., 107 Wash. 253, 181 Pac. 906; Gallant v. Metropolitan Life Ins. Co., 167 Mass. 79, 44 N. E. 1073; Barker v. Metropolitan Life Ins. Co., 188 Mass. 542, 74 N. E. 945; Gallop v....