Great American Reserve Insurance Co. v. Britton
406 S.W.2d 901
Tex.
1966
Check Treatment

*1 weight determining corpo judgments the value of arise another trial. The stock, many accordingly rate factors must be the courts re- other below versed, taken into E. consideration. See Warner v. and the is remanded to cause Co., C. Warner Minn. 33 N.W.2d district court for new trial.

721; Co., Marnik Packing v. Northwestern Ill.App. 195; 82 N.E.2d Barsan v. Savings

Pioneer & Loan Ohio St. 614; Kelley 127 N.E.2d 74 and 76 v. Corp.,

West Tremont Ave. Misc.2d 721; O’Neal, Corpora

198 N.Y.S.2d Close

tions 7.24. § present record the book On the RESERVE INSUR- GREAT AMERICAN COMPANY, Petitioner, constitutes

value of Consumers stock ANCE more than nothing a scintilla evidence company as to its reasonable worth. BRITTON, Respondent. E. Kathleen money lost substantial amount A-10815. No. organization, evidently since its losing money still Petitioner testi 1962. Supreme of Texas. its fied that assets were not worth book 27, 1966. July He was the under value. witness who stock, took to estimate the Rehearing Denied Nov. value according testimony to his was worth only ten or fifteen the dollar. His cents on respect in this could be disre fact,

garded attempt the trier of but no prove

was made to value of the actual

assets or the earnings rate of or losses

at or about the respondent time left

company’s employ. appear It does that on

an undisclosed petitioner date in 1962

bought 100 per shares of stock for $35.00

share, and some bought time in 1963 he per

another 100 shares for ten cents share. relatively high price

He claimed that the

paid in the earlier of these transactions sympathy seller, due to his for the recently, husband had died and that

whose price paid

the low in the later transaction

was attributable to the seller’s desire take

a tax summary loss. foregoing is a

all the evidence to establish the tending

value of the stock. In our it is Special

sufficient to warrant submission of 2,No.

Issue but the record devoid of

any support evidence to the conclusion that

the stock was worth much as $57.35

per jury. share as found point pre-

Petitioner’s ninth and final question probably

sents a which will not

beneficiary policy. By named in her sought cross-action Mrs. Britton to recover proceeds, statutory penalty attorney and reasonable fees in the 12% $4,000.00. sum The case was tried to jury rendered on the *3 jury’s awarding verdict Mrs. Britton the sought relief she in full. The Court of Appeals Civil 389 S.W.2d 320. affirmed. part part We affirm in and in reverse and remand.

The in issue the courts below concern- ing given by ques- answers the insured to application tions in the for has insurance gone of stage out the case at this of the appeal, will not be considered. The concerning issue good the health of the in- sured the same whether related to the time of application of making to the time delivery of of the policy and will dealt as it relates the to time of deliv- ery policy. policy The insurance provi- contains a “ * * * the policy shall not take

effect until has been delivered its own- er during the good lifetime health of * * Application the Insured for in- surance was made September Britton on Brundidge, Fountain, Churchill, Elliott & 1961, and the policy was executed and Roger Hansen, Dallas, firm, A. with above September 13, on delivered 1961. Britton petitioner. for died February on Smith, Sulphur Howard S. Springs, pertinent special The issue sub Edwards, Vernon, Woodrow H. Mount judge’s charge mitted trial to the respondent. jury and the answer thereto read as fol

lows : CALVERT, Chief Justice. you preponderance “Do find from a the evidence that Paul D. Britton was Suit was Great American Reserve in good delivery health on the date Insurance cancel a Companyto non-medical question? policy in the policy life insurance issued on the life Paul D. Britton. sought good Cancellation “Answer ‘He in was was not health’ health,’ ground good the in ‘He was in you that the insured good application health in- find. when the

surance was made or when the in ANSWER: He was health.” delivered and because the insured fraudulently given false to cer- answers properly placed issue the burden of questions tain application. proof A cross- American, on Great whether the case Britton, action was filed by Kathleen E. be considered from standpoint in seek- its surviving widow of insured cancel the or from the stand-

point seeking of Mrs. Britton in a recov- delivered. evidence is set out in detail ery policy proceeds. opinion Ap- Trevino v. of the Court 500, peals. American Tex. National Ins. notice this We need not further as it does not control decision the issue as have stated it. we There is much discussion Great American The evidence which Appeals and of the Court of Civil asserts establishes a matter of law that briefs of as to whether parties Britton health consists was not in support jury’s answer to the issue has deposition testimony Dr. S. probative That is not John evidence of force. Bagwell; of a medical hospital record question. Ameri It would avail by Dr. C. D. history diagnosis made nothing jury’s to set answer aside can McMillan; testimony of Dr. Lester Hod- dis to the issue: it still not have would ges, family and Brit- physician; Britton’s obtaining finding charged its burden *4 ton’s death certificate. preponderance from a of the evidence that health, finding good Britton was in a not1 May Bagwell Dr. Britton on examined right to its cancel to its to and essential 1, 1959, years and four months some two defense to the cross-action if the issue is Britton before delivered. the was one of fact. 38 T.L.R. he went to because was Bagwell see Dr. opin There is also much discussion pres- having gas a tremendous amount Appeals ion of and in the Court of Civil pains May, sure and in his In chest. be weight the briefs as to to the relative see Hodges Dr. recommended that Britton given lay testimony apparent good to the having Dr. McMillan because “he diffi- was health, diagnosis, of Britton and a medical stomach, culty his he was burn- with and prior made of deliv sometime to the date symptoms an and ulcer.” [had] ery policy, he afflicted that was with McMillan hospitalized by Britton was Dr. bodily infirmity a as an disease known 18, 1962, May years from 15 May to three gina pectoris. That issue the ultimate Bagwell and by after the examination Dr. in lay the and diagnoses case. Medical pol- eight some after the insurance months important bearing, have an icy was delivered. effect, controlling even on the issue “good particular health” circum under the history of gave a Britton both doctors ques given case, stances a but the true his arms. pain radiated into chest which type tion be decided in of this in cases history the Bagwell by Dr. was convinced which a favor the insurer fails to obtain him, which given physical examination jury finding able the evidence whether any to not show was “considered definite conclusively, according establishes to rec x-rays were “consid- abnormality," which ognized legal standards, insured normal," ered to be and an electrocardio- question good was was health. This gram showing “considered to features properly by American’s mo raised Great had “heart abnormal” that Britton probably tion for conclu verdict at the instructed “angina diagnosed trouble” which he properly pre and the evidence was arteriosclerosis,” pectoris, probably due to by point served of error its first nitroglycerin prescribed and for he which Appeals. Court of the issue With McMillan pain. tablets for relief of Dr. focus, proper brought before us into thus him, history given concluded proceed we to its decision. physical “failed examination which lay testimony abnormality," any to disclose significant

There is considerable appeared “changes indicating that the insured tests revealed consis- record which n be in tent hypertrophy” with left ventricular health when throughout Emphasis ours unless otherwise indicated. “positive changes coronary indicative of not in health must tested these sclerosis” that Britton had ulcer a duodenal standards. origin, recent chronic gastritis Bagwell’s testimony

“Coronary Dr. insufficiency.” Athough best, equivocal at highly Britton was found dead bed his testimony as may treat purposes we morning February 1963. The Britton conclusively establishing certificate, death signed by Hodges, Dr. diag Bagwell trouble,” Dr. which “heart gave the immediate “myo- cause of death as Dr. which but pectoris” “angina nosed cardial infarction.” insuffi “coronary diagnosed as McMillan ques this met next are ciency.” We Great American does not contend that trouble,” “heart did the seriously tion : How Britton had the ulcer, duodenal found “coronary insuffi pectoris,” or “angina Dr. McMillan, the policy when deliv- soundness general ciency” affect ered, or gastritis that chronic avoid would generally, system Britton’s healthfulness policy. We attention, narrow our there- they increase did materially and how fore, to the evidence relating Britton’s mat These American? risk of heart condition. medical witnesses expert which ters about testify, but competent to would be policy requirement An insurance any bearing having competent evidence applicant “good that an insurance be in consider we question which on the “perfect health” does not mean health.” “is angina *5 that Hodges of Dr. did, it policies If all with result could be canceled type of disease.” continuing a provision period. health contestable It is for this good hold the is that to of matter reason a that certain as the courts have evolved breached policy was of notice judicial measuring standards for “good health.” to take would have law we ail The term of the usually of more defined as a state or of one that the nature any bodily health free affect seriously in disease or such as to ments was mate firmity or to of a substantial nature af of Britton’s health which soundness fects risk. These general soundness healthful American’s and increase Great rially except ness of system in extreme seriously matters, materially or and are relative increases determination the risk the in by jury assumed should left cases Sovereign surer. See Camp, on trial. v. W.O.W. introduced from evidence Derrick, 982, Tex.Civ.App., 64 S.W.2d (1933), refused; 983 writ National Vann v. a broad term “Heart trouble” Life & Co., Tex.Com.App., Accident Ins. one encompasses more than and no doubt 347, 24 (1930); S.W.2d pectoris” Sure “Angina 349 Southern type specific ailment. of ty Co. Benton, v. Tex.Com.App., Inter by 280 S.W. Third New is defined Webster’s (1926); 551 Hines City v. Kansas Life disease charac Dictionary as “a national Ins. Tex.Civ.App., 688, 260 paroxysmal 690 of substernal by S.W. attacks terized (1924), dism.; writ National Life Acci is usu. associ & duration pain short that of dent Moses, Co. v. Tex.Civ.App., fear apprehension 257 S.W. of or with a sense ated (1923), hist.; 289 no death, writ Couch on In effort precipitated impending of surance, sec. 885a. We emotion, have also held that quickly rest relieved good a provision health Although is breached if the nitroglycerin.” administration of applicant suffering testified, “is be, Hodges from a kind a may serious angina as Dr. illness, of which disease, continues and not eventually continuing evidence does causes his death.” during Texas Ins. Prudential tell whether its continuance us Co. Dillard, v. 15, 158 Tex. on 307 effect progressively S.W.2d a more serious has (1957). 247 progression. of In rapidity conclusiveness health or the of its Great proof American’s that Casualty Britton was & Life Co. v. Guerin American

ger, Tex.Civ.App., Mayberry, 162 Tex. 347 S.W.2d S.W.2d (1947), hist., (1961), Life no the court noted that and Great National Ins. Co. writ Hulme, progresa, the “details nature and 134 Tex. 136 S.W.2d 602 of the subjects (1940). dealt with Dillard. In of the disease of cancer are We have judicial knowledge.” within two Mayberry of either common or the insured child died days policy, med- delivery Neither we know the the na of of the and the details of pectoris progress angina ture from ical evidence that of de- was at time livery physical judicial knowledge. common or In this condition of the thereof connection, fifty- Mc child it had it is to be noted that Dr. was such fifty diagnosis, years Millan’s final made chance of survival. is no such three There there diagnosis by Bagwell eight after evidence in this case. In Hulme Dr. policy, jury findings supporting were the conclu- delivery months after Webster’s, “Coronary insufficiency.” health. su that the insured was not pra, Appeals, “coronary insufficiency” defines “coronary insufficiency relatively mild degree.” policies judicial Avoiding insurance knowledge the “substantial” character of Dillard, supra, In the evidence was certain “serious” effect diseases and their applicant epilepsy conclusive dangerous encroachment into on health is a policy its most serious form when the It is expert opinion. an medical area of delivered, and that the affliction was proof require proof; safer at proof cause of death. we con On that issue. trial court level well settle the cluded that the insurer had established complains American of that also provision breach a mat health portion judgment which court’s trial ter law. not rule this case. Dillard does $4,000.00 recovery as attor- awarded a pointed out, As the evidence here does ney It that no demand fees. asserts infirmity conclusively establish a serious proceeds payment was made Moreover, when the was delivered. filing therefor and that before the of suit angina death from pectoris is not conclu *6 proof of the there no of reasonableness is sively Webster’s, supra, established. de sought sum and recovered as fees. “myocardial fines infarction” “infarction as myocardium, of typically resulting the attorney giv- fees is right The to recover coronary occlusion,” “coronary defines and Texas by 3.62 the en and limited Article of partial complete occlusion” as “the or block Code, V.A.T.S., which reads Insurance coronary (as by of a artery a thrombus pertinent part as follows: by spasm artery).” or sclerosis of the a loss occurs and “In all cases where suspect strongly We believe or * * * company shall life insurance the myocardial death infarc Britton’s from a days thirty pay fail the same within to by artery tion was caused sclerosis of an company therefor, after demand such thrombus, by rather than but we do pay the holder such shall be liable to know it to and no evidence offered policy, of the in addition to the amount prove it. We hold that the evidence does damages loss, on per cent (12%) twelve conclusively, according establish to le together with the of such loss amount gal standards, in good that Britton was not attorney prosecu- for the reasonable fees policy health when delivered. the ** * tion and of such loss. collection Great for instructed American’s motion take fees fixing The such shall properly verdict was overruled. in- to the all benefits into consideration the prosecution of sured incident the principal by The Amer- to cases cited Dillard, suit, on account accrued and to accrue contrary ican for a conclusion policy.” supra; such Lincoln Life Ins. Co. Income

907 Making payment of 206 Woodyard, Tex.Civ.App., demand for S.W.2d 93 policy proceeds ordinarily prerequisite hist.; is to no American Income (1947), writ recovery attorney Davis, Tex.Civ.App., the the fees under 334 Life Ins. Co. v. statute; hist.; penal nature and because of the 486 American (1960), no writ S.W.2d Points, Tex.Civ.App., that the assessment we have held Co. v. 131 Nat. Ins. requirement dism., by filing judgment is not met suit. (1939), the 983 S.W.2d writ Wann, Metropolitan Life Ins. 130 holdings Co. v. are in correct. Those conflict 400, Trevino, 470, Tex. 1301 S.W.2d 115 A.L.R. own in and our Johnson Ford, (1937); Mutual Life Ins. supra, disapproved. Co. v. and are Some However, Tex. 131 S.W. 406 our decisions (1910). cited were decided after cases Trevino, when the insurer files suit cancel the to no doubt were Johnson and policy plain- for proceeds part responsible before the is suit for failure of the filed, liability the we hold the proof entire tiff make to of reasonableness. insurer, both and under

statute, issue, Liability American put right is of Great and the require policy proceeds, statutory penal pre insurer for the demand to costs, fees, requisite ty attorney liability other than the to fees is attorney correctly judgment. is fixed in the purpose provi present waived. The of the demand attorney The is a give op to claim fees severable the insurer a reasonable claim, Rules portunity investigate pay and under Rule Texas to claim proceeds Procedure, of Civil we are authorized to before suit is filed. When judgment sever the claim insurer and reverse policy, files suit to cancel the only, statutory which we do. purpose Plaintiff would not be served attorney requiring clearly entitled to recover fees in a demand before a counterclaim some amount. exercise Accordingly, we cross-action is filed. authority Rule Texas conferred plaintiff proof offered no Procedure, Rules and remand the any kind of the reasonableness of the attor cause to court for severed the trial a new ney sought fees have recovered. We trial. remainder of held that attor reasonableness of “[t]he affirmed. ney’s question fees in an insurance is a case sup fact be determined and must GRIFFIN, NORVELL and HAMIL- ported by competent evidence and TON, JJ., dissenting. jury.” submitted to a v. Universal Johnson Co., Life & Accident Ins. Tex. Tre DISSENTING OPINION also vino v. American National Ins. *7 NORVELL, 500, 656, Tex. 168 Mer Justice. (1943). 660 S.W.2d cury Mata, Tex.Civ.App., Life Ins. v.Co. general rule, cause, diagnosis, As a ref., 310 (1958), 130 S.W.2d writ does progress and treatment of disease are mat contrary. hold to the must rely upon opin ters in which we must recovery be reversed in far it so as awards However, experts. ions of medical this rule $4,000.00 attorney fees. I application. not universal its think it holdings

There can be said as a of common some Court matter Appeals’ suffering opinions knowledge that one with some that the reasonable- smallpox, attorney jury question ness fees is not a well-known acute disease such judge’s diphtheria typhoid but is is not a matter entrusted to the trial fever discretion; further, judge Company that the health. In Travis Life Insurance trial Rodriguez, 326 adjudicate judicial (Tex.Civ. v. reasonableness on S.W.2d e., 182, knowledge App.1959, of evi- writ 160 Tex. without the benefit ref’d. n. r. 434), Co. v. 328 it dence. See Franklin Life Ins. S.W.2d was held as matter knowledge person of common that a suffer- Thomas Edward BANNON from health. leukemia is not see, epilepsy type, As to the most serious v. Dillard, Texas Insurance v. Prudential Co. STATE. 15, 242 (1957). Tex. 307 S.W.2d Other Jack Carroll SMITH

examples of both acute and diseases chronic range knowl- coming within the of common STATE. edge might given. be Cf. Lincoln Income 492, Mayberry, Life Ins. Co. v. Tex. 38576. Nos. Appeals of Texas. Criminal my opinion, In case evidence in this 1965. Dec. conclusively shows that at the time Rehearing Denied Feb. 1966. delivery upon, Paul D. sued pectoris suffering angina Britton was Rehearing Motion for Denied Second due to arteriosclerosis and that his chest March 1966. pains times that it was at were so severe Denied Oct. Certiorari necessary nitroglycerin for him to take tab- See 87 S.Ct. 38. coronary lets in order to dilate the arteries easily so that blood more could flow supply oxygen

and thus to the heart muscle.

Admittedly, “good used the term health” as policies

in life as that issued to Mr. such one, my opinion,

Britton is a relative but in knowledge

it is a matter of common

any person suffering angina to the necessary power-

extent to take a drug

ful in order to dilate the blood vessels

cannot said “good to be in health”. The Dictionary

Oxford Universal defines the “angina” as,

term “angina pectoris” “A

dangerous disease, marked sudden and pain part chest,

severe the lower also, suffocation; feeling

with a called heart-stroke,

breast-pang, spasm

chest.” perusal

A judicial of the discussion of Ray,

notice contained in McCormick and (2d

Texas Law Ed.) of Evidence 151 to §§

211, inclusive, field that the demonstrates expanding judi- one and an I think safely

cial notice device exercised present case. McCormick and

Ray, supra, 197. I would reverse §

judgments and render of the lower Courts petitioner. Accordingly, for the respectfully

I dissent. HAMILTON, JJ., join

GRIFFIN and

in this dissent.