Court Opinion

ID: 9830901
Source: CourtListenerOpinion
Date Created: 2023-09-01 20:36:36.842782+00
Date Added: 2024-06-11T07:43:28.216382
License: Public Domain

On Motion for Rehearing.
[4] As will be noted in our opinion on original hearing, we cited in support of the judgment in favor of the insured articles 4947 and 4948 of Vernon’s Sayles’ Texas Civil Statutes, which were quoted. Our attention is now called to the stipulation contained in the policy as follows:
“This policy is incontestable after one year from its date except for nonpayment of premiums.”
And also to article 4951 of Vernon’s Sayles’ Texas Civil Statutes, which 'Contains the following:
“The provisions of the foregoing articles shall not apply to policies of life insurance in which there is a clause making such policy indisputable after two years or less, provided premiums are duly paid.”
This provision was not cited in the briefs and, upon a former consideration of the assignments, escaped our notice. Appellant also cites the recent decision by our Supreme Court in Blackstone v. Kansas City Life Insurance Co., 174 S. W. 821. In that case it was held that articles 4947 to 4951 of our statutes had no application to the two policies involved in that suit, both of which were issued June 23, 1909. The applications by the insured for those policies contained provisions warranting the truth of statements made by him in answer to questions propounded, and upon which statements the policies were issued. The Court of Appeals held that certain statements by the insured contained in the application were untrue; and that the policies did not support a recovery by reason of such warranties. The Supreme Court concurred with the Court of Appeals in holding that such statements should be held to be warranties, and that plaintiff’s right to recover should be tested accordingly, but further held that the statements claimed to be untrue were not untrue when strictly construed, and upon that holding affirmed the judgment of the trial court in favor of the insured against the insurance company.
By the acts of 1909 our insurance law was amended. See Acts 1909, c. 108, p. 192. Articles 4741 and 4959, 3 Vernon’s Sayles’ Tex. Civil Statutes, are two sections of that act; the former being section 22 and the latter section 68. By article 4741 it is provided that:
“No policy of life insurance company shall be issued or delivered in this state, or be issued by a life insurance company organized under the laws of this state, unless the same shall contain provisions substantially as follows. * * *
“3. A provision that the policy, or policy and application, shall constitute the entire contract between the parties and shall be incontestable not later than two years from its date, except for nonpayment of premiums; and which provision may or may not, at the option of the company,_ contain an exception for violations of the conditions of the policy relating to naval and military services in time of war.
“4. A provision that all statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties.”
Article 4959 reads:
“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.”
The beginning portion of section 22 of the act of 1909 reads:
“No policy of life insurance shall be issued or delivered after December 81st, 1909," etc.
Article 4741 omits the words “after December 31st, 1909.” Doubtless the omission of those words in Revised Statutes 1911 was by reason of the fact that the date thus omitted had already passed at the time of the adoption of the codification of the statutes in the year 1911. The same words are contained in section 23, which are likewise omitted in article 4742 of our present statutes, doubtless for the same reason. The regular session of the Thirty-First Legislature, at which the acts of 1909 was passed, adjourned March 13, 1909, and that act took effect 90 days after that date, which would be June 13, 1909. As noted already, the policies in the case of Blackstone v. Kansas City Life Ins. Co., supra, were issued June 23, 1909. Hence they were not required to contain the provisions of article 4741. The provision in the act of 1909 that the requirements of article 4741 should apply only to policies issued after December 31,1909, clearly indicates an intention of the Legislature that the articles of the statutes (4947 to 4951) which were passed in the year 1903 should be applicable to policies issued prior to December 31, 1909, and while those statutes were in force; but that the provisions of the act of 1909 should have a controlling effect upon all policies issued after that date.
[5] The policy in controversy contains the following provision:
“This policy contains the entire contract between the parties and all statements made by *649the insured shall, in the absence of fraud, be deemed representations and not warranties. * * * a
Aside from the provisions of article 4959, the stipulation in the policy just quoted shows a specific agreement by the company that the statements by the insured should not be deemed warranties, but should be deemed representations only. That provision is clearly in conflict with the further stipulation and agreement contained in the application for the policy signed by the insured, attached to the policy, and which is invoked by the appellant here, reading:
“And X do further declare and agree that each and every of said answers, statements and representations made by me as aforesaid is and are material to this application and any action taken thereon by said the Guarantee Life Insurance Company, and I warrant and declare each and every of said answers, statements and representations to be full, complete and true; and that if either or any of said statements, answers or representations be not full and complete, or if either or any of them be untrue in any respect, then and in such case any policy issued thereon shall be null and void from the beginning, except as shall be otherwise expressly provided in this policy, * * * and I hereby further agree that this application and everything therein contained shall be and constitute a part of any policy issued thereupon.”
It is too well settled to need the citation of authorities that independent of articles 4741 and 4959, if a contract of insurance is ambiguous, that construction will be adopted which is most favorable to the insured, and, even though the application for the policy in the present suit should be considered as a part of the contract of insurance, the contractual terms thereof at variance with those of the policy, to the effect that the statements made by the insured shall be deemed representations and not warranties, would be rejected under that rule. Reppond v. Nat. Life Ins. Co., 100 Tex. 519, 101 S. W. 786, 15 Ann. Cas. 618, 11 L. R. A. (N. S.) 981; Del. Ins. Co. v. Harris, 26 Tex. Civ. App. 537, 64 S. W. 867; 25 Cyc. 805.
The act of 1909 contains no limitation of articles 4741 and 4959, quoted above. Those articles apply to all policies issued after December 31, 1909, including the one in controversy in this suit, and such policies are not affected by the provisions in article 4951, quoted above.
Appellant has cited Phœnix Mut. Life Ins. Co. v. Raddin, 120 U. S. 183, 7 Sup. Ct. 500, 30 L. Ed. 646, and Jeffries v. Economical Mut. Life Ins. Co., 89 U. S. (22 Wall.) 47, 22 L. Ed. 836, holding that an agreement between the insurer and insured that statements made by the insured for the purpose of procuring the policy are material to the risk is enforceable, and upon those authorities insists that effect should be given stipulation contained in the application for insurance, reading:
“And I do further declare and agree that each and every of said answers, statements and representations made by me as aforesaid is and are material to this application and any action taken thereon by said the Guarantee Life Insurance Company.”
In other words, appellant insists, in effect, that, in view of that stipulation, that insured was in no position to claim that the alleged misrepresentations were immaterial to the risk assumed by the company. “No technical words or form of expression are necessary to constitute a warranty.” Banking Co. v. Stone, 49 Tex. 4. The stipulation last quoted, especially in connection with the further agreement that, if any of the representations be untrue, then the policy shall be null and void, constituted a warranty of the truth of the representations, independent of the further more specific warranty of their truth in the use of the word “warrant” in connection therewith. Bills v. Hibernia Ins. Co., 87 Tex. 547, 29 S. W. 1063, 29 L. R. A. (N. S.) 706, 47 Am. St. Rep. 121; Washington Fire Ins. Co. v. Cobb (Civ. App.) 163 S. W. 608. To give effect to that stipulation in the application would be to ignore and override the stipulation in the policy favorable to the insured, in effect, that all such statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties, which would be contrary to the rule of construction of contracts of insurance and contrary also to the plain provisions of articles 4741 and 4959. Furthermore, it will be noted that the entire agreement contained in the application is qualified by its concluding language: “Except as shall be otherwise provided in this policy.”
The motion for rehearing is overruled.