Opinion ID: 2463262
Heading Depth: 1
Heading Rank: 2

Heading: waiver of good health clause

Text: Policy A and Policy C contain identical good health clauses, which read as follows: This Policy shall become effective on the Policy Date if the Insured is then alive and in good health, but not otherwise. The parties stipulated that Ozell Washington, the insured, was not in good health within the meaning of the terms of these two policies on their effective dates. A. W. Washington, the beneficiary, urges, however, that the good health clauses were waived as a matter of law in that Reliable's agents knew that Ozell was not in good health at the time the applications were procured. [3] Waiver was an affirmative defense upon which Washington had the burden of proof. Texas Prudential Insurance Company v. Dillard, 158 Tex. 15, 307 S.W.2d 242 (1957). No special issues were requested or submitted to the jury on this point. As stated above, a party generally waives an issue upon which he relies by failure to request its submission. Tex.R.Civ.P. 279. Washington correctly states that no issue would be necessary if waiver were established as a matter of law. Texas Prudential Insurance Company v. Dillard, supra . The court of civil appeals held that the evidence did not establish waiver as a matter of law. Consequently, Washington was denied recovery on Policies A and C because of the violations of the good health clauses in those policies. We must examine the evidence concerning Policies A and C in light of this holding. Policy A. Agent Armstrong obtained the application for this policy at the home of A. W. Washington, with whom Ozell was living at the time. Armstrong testified that he had known Ozell for five or six years and that he did not know she was ill. On the day in question, she appeared to him to be in good health. Even A. W. Washington testified that on that day she looked pretty good and was feeling Okay. This testimony fails to establish as a matter of law that Agent Armstrong knew Ozell was not in good health and that he waived the good health provision of the policy. The court of civil appeals therefore correctly held that recovery on this policy was barred. See Texas Prudential Insurance Company v. Dillard, supra . Policy C. This policy presents a somewhat different situation. Agent Jones obtained the application for this policy at the home of Viola Smith, Ozell's sister. Three people were present when Ozell signed the application: Agent Jones, Ozell, and Viola Smith. Agent Jones did not testify and there is nothing in the record to indicate or explain his unavailability. Mrs. Smith testified that Ozell looked horrible, like a skeleton, and durn near dead. She stated that Ozell could not sit erect, could not get out of her chair, had difficulty talking and breathing, and that everybody who visited commented about her swollen legs. Most importantly, Mrs. Smith testified that she warned Ozell that the insurance company would not accept her because of her poor health. Q Well, I understand from your testimony that you do remember your saying that this insurance won't pay because you are in bad health? A Sure did. That was what I said. I said that. Q All right. And what did the agent say to you and to Ozell when you said that? A He said, `Oh, yes, they will pay, they will pay. It is good. They will pay.' And I never did believe it, and I spoke it. On this point, Mrs. Smith was adamant and unswerving, returning to it several times during her testimony. [4] Nevertheless, the court of civil appeals held that Mrs. Smith was [a]t best ... an interested witness and that as such her testimony did not establish waiver as a matter of law. [5] 570 S.W.2d 24 at 27. This court has only recently had occasion to consider in a slightly different context the rules concerning the finality to be given to testimony of an interested witness. In Collora v. Navarro, 574 S.W.2d 65 (Tex. 1978), this court stated the general rule to be that evidence given by an interested witness raises an issue of credibility upon which the jury must pass. It was also recognized that an exception to this general rule may arise when the testimony is clear, direct, and positive, is free from internal inconsistencies or contradictions, and is uncontradicted by other testimony or circumstances `in short, when there is nothing to cause any reasonable suspicion as to its truth.' 574 S.W.2d 65 at 69. The opinion further explained: This exception is most appropriate when the opposing party has the means and opportunity of disproving the testimony or testing the credibility of the witness, but fails to avail himself of it. On the other hand, ... `the basis for recognizing an exception is weakened somewhat when the testimony is such that it could not readily be contradicted if untrue.' [Citations omitted.] 574 S.W.2d 65 at 69. An application of these rules to the facts of the instant case leads to the conclusion that the testimony of Mrs. Smith established as a matter of law that Reliable waived the good health provision of Policy C. Again we note that Reliable does not question the authority of its agents to waive this provision of the policy. Her testimony was clear, direct, positive, and uncontradicted. Reliable had the means to disprove her testimony by calling Agent Jones as a witness or by introducing his testimony through deposition. For whatever reason, Reliable did not utilize these options. Under these circumstances, we hold that the exception to the general rule applies and the testimony of Mrs. Smith established waiver as a matter of law. On this policy, therefore, the judgment of the court of civil appeals must be reversed.