Court Opinion

ID: 3983164
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:39:45.90742+00
Date Added: 2024-06-11T07:44:14.718975
License: Public Domain

On Rehearing.
The primary question involved in this appeal is the failure of the insured, her agent and beneficiary, and the agent of the Company — all represented by appellant — to disclose to the Company any adverse change in her physical condition, occurring after the application was submitted for the insurance (assuming that she was then in sound health), and before-appellant received the policy for delivery to the insured. It is in evidence that at the time appellant received the policy, the insured was on her deathbed and died within a few days after such policy was received. In Stipcich v. Metropolitan Life Ins. Co.,277 U.S. 311, 48 S. Ct. 512, 72 L. Ed. 895, (in substance), and in Shaner v. West Coast Life Ins. Co., 10 Cir., 73 F.2d 681, approved in Phipps v. American Nat. Ins. Co., Tex. Civ. App. 116 S.W.2d 800, it is said: "The simplest rudiments of fairness require an applicant for insurance to disclose to the company any adverse change in his physical condition occurring after the application is submitted and before the policy is issued and delivered. Failure to do that here rendered the policy unenforceable because in virtue of the contractual provision it did not go into effect." Appellant contends that the application for the insurance has no contractual force, not being made a part of the policy. We recognize the rule of law. The particular facts in insurance contracts of this character are largely controlling as to the principles of law applicable thereto. In this instance, there is no question that the insurance was issued on the certificate representing that the insured was an insurable risk; that the Company had no other knowledge of the risk, and did not know that at the time the policy was delivered to appellant, the insured was in a dying condition. In all fairness to his principal, appellant's duty impelled him to avoid liability in ascertaining the true condition of the insured. He was the father of the insured; made the application, designating himself as beneficiary, and forwarded it to the Company. The Company relied explicitly upon the good faith of appellant in disclosing the true facts. Under the testimony as detailed in the record and the allegations of fraud in defendant's pleadings, issues of bad faith and negligence on the part of appellant, acting for himself and the insured, were raised, rendering the insurance contract unenforceable. It did not go into effect.
Appellant's motion for rehearing is overruled. *Page 977