Court Opinion

ID: 9778129
Source: CourtListenerOpinion
Date Created: 2023-08-29 20:33:48.183692+00
Date Added: 2024-06-11T07:33:03.988817
License: Public Domain

Carleton Harris, Chief Justice, concurring. I concur with the majority and my views are pretty well expressed in a concurring opinion that I wrote in National Old Line Insurance Company v. People, 256 Ark. 137, 506 S.W. 2d 128, a case involving credit life insurance. Though I have never done this, I should like to repeat some of the language in that concurring opinion, as follows: “I have noticed from time to time, in these cases involving credit life insurance that the affirmative statement called for from the applicant is rather general in nature, (I am now in good health) and can, in many instances, be honestly answered by the applicant by ‘Yes,’ though actually he or she may not be in good health. For instance, perhaps one had open heart surgery a few months ago, or an operation on one of his carotid arteries which was partially blocked, endangering the flow of blood to the brain. He is told by his doctor that the operation was successful, and he genuinely feels that he has no further problems and is in good health. In fact, I know of an individual who underwent open heart surgery, and who is using a pacemaker. He constantly plays tennis and engages in other sports and considers himself as getting along fine, but I doubt seriously that an insurance company would consider him an acceptable risk. This man probably could honestly answer the question by stating that he is in good health, though the prospective insurer would disagree. It would appear to me that the company selling credit life insurance, in its application form, could follow the practice generally followed by insurance companies selling regular life insurance policies, and propound more specific questions ... I refer to such questions as whether one has been in the hospital any time during the last three years, consulted a physician within the last three years, ever been told he had high blood pressure, heart disease, diabetes, cancer, etc. On the basis of such answers, the company can intelligently determine whether to consider the man a good insurance risk.1 If answers are in the negative and are false, this fact should not be difficult to establish. . . . I can only say if the insurance company selling credit life insurance is willing to take the risk of asking only general questions, it will just have to also take the chance of perhaps paying benefits to the designee of an applicant who was not in good health when he applied for the policy.” As pointed out in the majority opinion, the evidence is undisputed that the agent Stokes was plainly told that Jones had a heart attack three years earlier and had been seen by his physician since that time; the health situation was discussed. Nonetheless, agent Stokes wrote the policy. I reiterate that specific questions which certainly called for specific answers would have prevented this situation. George Rose Smith, Justice, dissenting. I cannot agree with the majority’s position that this court is entitled to simply ignore the plain language of a controlling statute in order to reach what is considered to be a fair decision. Fairness is a two-way street. Presumably the insurer issued its policy in reliance on the statute and on our decisions giving effect to the statute. To change the rules of the game while play is in progress can hardly be characterized as complete fairness. The statute provides that incorrect statements in an application for life insurance prevent a recovery if they are material to the acceptance of the risk or if the insurer would not have issued the policy if the true facts had been made known as required by the application for the policy. Ark. Stat. Ann. § 66-3208 (Repl. 1966). Until today’s decision we have given effect to the statute by holding that an applicant’s false statement of good health in the application for the policy, if material, is a defense within the period of con-testability. Life & Casualty Ins. Co. of Tenn. v. Smith, 245 Ark. 934, 436 S.W. 2d 97 (1969); Dopson v. Metropolitan Life Ins. Co., 244 Ark. 659, 426 S.W. 2d 410 (1968). Those decisions, to which there was no dissent, should govern this case. If the court is to overrule its decisions, fair warning should be given. Under the statute it is immaterial that the applicant orally explained the condition of his health to the insurer’s soliciting agent. Such an agent “has no authority to agree upon the terms of the policies or to change or waive those terms, nor can his knowledge be imputed to the company he represents.” Holland v. Interstate Fire Ins. Co., 229 Ark. 491, 316 S.W. 2d 707 (1958). Here it was the company’s practice not to issue a credit life insurance policy unless the insured signed a statement of his good health in the application for the policy. The soliciting agent, who was actually an automobile salesman, had no authority to change or waive that practice. Yet the majority’s decision invests him with that authority, contrary to a long line of cases decided by this court. The judgment should be reversed and the cause dismissed. Fogleman, J., joins in this opinion.   Actually, some companies selling credit life insurance do set out questions relating to specific ailments in the application form.