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RECEIVERS OF RAILROADS – EARNINGS SUBJECT TO CLAIMS – SUITS AGAINST RECEIVERS — JURISDICTION SALES.–The custody of a receiver is the custody of the court: Bell V. American Protective League, 163 Mass. 558; 47 Am. St. Rep. 481. A claim for damages caused by injuries in tlicted through the negligence of a receiver while he is operating a railroad is entitled to payment out of the current receipts or earnings of the road: Texas Pac. Ry. Co. v. Johnson, 76 Tex. 421; 18 Am. St. Rep. 60, and note; note to McNulta v. Lockridge, 31 Am. St. Rep. 374. A receiver is liable in his official capacity for injuries resulting from the negligent operation of the road in all cases where the company itself would be liable if it were carrying on the business in its own name; and the earnings of the road in his hands are chargeable with the amount of any damages recovered against him in a suit for negligence: See monographic note to Naglee y. Alexandria etc. Ry. Co., 5 Am. St. Rep. 315, on the liability of railroad corporations while the road is in the hands of trustees or receivers. So, if the earnings of a railway in the hands of a receiver are invested in betterments, which, without sale, are returned to the company, with its other property, at the close of the receivership, the company is liable for the satisfaction of any claim which the receiver ought to have paid out of the earnings: Texas Pac. Ry. Co. v. Johnson, 76 Tex. 421; 18 Am. St. Rep. 60. The discharge of the receiver, and return of the property to the owner, leaves the property subject to any claim or charge legally resting upon it; and this may be enforced, through approprio ate process, by any court having jurisdiction: Texas Pac. Ry. Co. V. Johnson, 76 Tex. 421; 18 Am. St. Rep. 60; which case also discusses the power of the court to fix, arbitrarily, by order, the time within which a claim must be established upon the discharge of the receiver. A state court has jurisdiction of a suit against a receiver appointed and acting on an order made by a United States court: Note to McNulta v. Lockridge, 31 Am. St. Rep. 374; and it may be brought without asking leave of the court which appointed him: Dil. lingham v. Russell, 73 Tex. 47; 15 Am. St. Rep. 753; but upon this point the authorities are divided: Note to Naglee v. Alexandria etc. Ry. Co., 5 Am. St. Rep. 316. As against the purchaser at a valid receiver's sale, no lien can be made to attach to the property which did not rest upon it at the time of the institution of the suit under which the sale was made: Texas etc. Ry. Co. v. Lewis, 81 Tex. 1; 26 Am. St. Rep. 776.
MUTUAL LIFE INSURANCE COMPANY V. SIMPSON.
[88 TEXAS, 333.) INSURANCE, LIFE-EFFECT OF FALSE ANSWERS AS TO SPECIFIC AILMENTS.-A policy of insurance is avoided by false answers of the insured as to his freedom from specific diseases, without reference to their materiality as to the risk, as answers respecting specific ailments are warranties, whether material to the risk or not.
INSURANCE, LIFE—“DISEASE"-WARRANTY AS TO SPECIFIC AILMENT.-The word "disease" may include, and is often used to designate, ailments more or less trivial; and an insurance company may, if it elects, inquire about any ailment, and take a warranty concerning it, lest it may affect the risk, although it cannot be known that it will.
INSURANCE, LIFE-FALSE ANSWER AS TO HEADACHE -INSTRUCTIONS-REVERSIBLE ERROR.-If an applicant for insurance answers that he has never been subject to "headache severe, protracted, or frequent," and there is testimony, under proper pleadings, showing the answer to be false, it is reversible error to in. struct the jury that "temporary illness of the assured in the course of every-day life, brought on by excessive exercise or overwork, is not embraced in said application," and that the answers of the assured have reference "to such diseases or ailments as indicate a vice in the constitution, or are so serious as to have some bearing on the general health,” and in the continuance of life.
Ewing & Ring, for the appellant.
335 ALEXANDER, S. A. J. This was a suit by Elizabeth K. Simpson against the plaintiff in error to recover on a life insurance policy, insuring the life of her husband, William Simpson, in the district court of Harris county, in which she recovered judgment on a trial before a jury, which was, on appeal, affirmed by the court of civil appeals; and, on application of the insurance company, a writ of error has been granted.
The insurance company defended, on the ground, among others, that there was a breach of the warranties made by the assured, on the faith of which the policy was issued, and that it was thereby avoided. The record discloses that preliminary to the insurance, and as a basis thereof, inquiry was made of the applicant for insurance, as follows: “Have you ever had any of the following diseases?” Then follow inquiries as to a variety of ailments, some of which are universally known to be fatal, or likely to affect the duration of life, such as "consumption," "spitting or coughing of blood,” “paralysis,” “apoplexy," and “disease of the heart.” There are also inquiries made as to certain other physical disabilities, not necessarily or probably coming in the category above mentioned, such as "frequent or difficult urination," "dizziness," "palpitation of the heart," "shortness of breath," "headaches—severe, protracted, or frequent.”
To the inquiry as to the last mentioned the assured answered, “No." It is conceded that the answers were warranties, and, if untrue, that the policy was avoided, without reference to their materiality as to the risk.
336 The evidence shows that for many months prior to the contract, at irregular intervals, but frequently, the assured had what is designated in the evidence as sick headache; that it was severe, accompanied by vomitings and a pain in the region of the chest, which disability continued from six to eighteen hours, but after sleep, which followed the vomitings, a normal condition existed. It also appears that all of these spells were preceded by excessive work and fatigue and loss of sleep, which are assigned by the witness, plaintiff below, as the cause thereof.
And it sufficiently appears that the assured was otherwise a man of robust health.
The district court charged the jury to find for plaintiff, “unless . ... the assured in his application and examination, upon which the policy was issued, touching his drinking wine, spirituous and malt liquors, and to what extent, and his former habit of drinking wine, spirituous and malt liquors, answered falsely; or unless they believed that in such application, touching whether assured ever had diseases, such as headaches, severe, protructed, or frequent, and the particulars and duration of same; and as to his being in perfect health, the said assured answered falsely, in which case you will find for defendant. But you are charged that temporary illness of assured in the course of everyday life, brought on by excessive exercise or overwork, is not embraced in said application, nor is an occasional drink of spirituous, vinous, or malt liquors embraced in the said application, but the answers in said application have reference to such diseases or ailments as indicate a vice in the constitution, or are so serious as to have some bearing on the general health, and such as, according to general understanding, would be called a dis
And you are charged that the questions and answers respecting the drinking of spirituous, vinous, or malt liquors by assured, and former habits mentioned in said application, have no reference to an occasional drink taken, nor to occasional indulgences, unless such drinking was habitual.”
This charge is approved by the court of civil appeals as a correct exposition of the law of the case. There is no complaint in the application for writ of error that this charge is on the weight of the evidence.
It is not deemed necessary to set out the charges requested and refused, or the assignments of error complaining of the charge and the refusal of charges. They are sufficient to require a determination as to whether there was material error in the instructions of the court. Justice Ramsey and the writer agree that the part of the charge which instructs the jury that the answers of the assured have reference to such diseases or ailments as indicate a vice in the constitution, or are so serious as to have some bearing on the general health and in the continuance of life, was a material error, prejudicial to defendant, for which the judgment of the court of civil appeals should be reversed.
We are not unmindful of the well-recognized rules as to the construction of contracts of insurance—that forfeitures are not favored, that generally, in cases where there is doubt or ambiguity, that construction should be adopted most favorable to
the assured, the reasons for which are obvious, and need not be recounted. On the other hand, when the language of contracting parties is plain and unambiguous, and there is no reason for misunderstanding the purport thereof, effect must be given to it, enlarged or limited only by the nature of the subject to which it is applied.
Said the United States supreme court, speaking by Justice Jackson, in the case of the Imperial Insurance Co. v. Coos Co., 151 U. S. 462: "It is settled by this court that when an insurance contract is so drawn as to be ambiguous, as to require interpretation, or to be fairly susceptible of two different constructions, that construction will be adopted which is most favorable to the assured. But the rule is equally well settled that contracts of insurance, like other contracts, are to be construed according to the sense and meaning of the terms which the parties have used; and, if they are clear and unambiguous, their terms are to be taken and understood in their plain, ordinary, and popular sense.” As said by the court of appeals of New York (Mack v. Insurance Co., 106 N. Y. 560), as quoted by Judge Jackson: “It tends to bring the law itself into disrepute when, by astute and subtle distinctions, a plain case is attempted to be taken without the operation of a clear, reasonable, and material obligation of the contract.”
The charge of the court and the opinion of the court of civil appeals virtually assume that, because the inquiry is about diseases, it is necessarily and always about diseases which either indicate a vice in the constitution, or are so serious as to have some bearing on the general health and in the continuance of life; and this, notwithstanding the specific inquiries may be as to physical disabilities or ailments which, according to common understanding, are diseases, but which, nevertheless, are not understood to indicate the conditions enumerated in the charge. This seems to reverse a common rule of the construction of language. If it be true that, when an inquiry about diseases is made, it means only such as are mentioned in the charge, notwithstanding the specific inquiries are about ailments not usually indicating such conditions, the well-established distinction between warranties and representations would be useless, for then there would be a breach of warranty only when the matter warranted was both false and material to the risk.
The word “disease" may include, and is often used to designate, ailments more or less trivial. Medical science, as expounded by its experts, has not definitely determined all of the physical ailments which indicate a vice in the constitution, or have
a direct tendency to shorten life. Through abundant caution the insurance company may, if it elects, inquire about any ailment, and take a warranty concerning it, lest it might affect the risk, although it cannot be known that it will.
338 The length of this opinion precludes more than a brief reference to some of the cases cited by defendant in error, and discussed by the court below.
In the Cushman case, 70 N. Y. 73, from the opinion in which the language of the charge under discussion seems to have been copied, it is noticeable that the court says that "it must be generally true, that before an ailment can be called a disease it must be” such as is indicated in the language of the charge. The case was one upon conflicting evidence as to whether assured had ever had disease of the liver, or any serious disease, and it was decided that the defendant was not entitled to have a nonsuit entered, and that whether there were such diseases was properly submitted to the jury; and this is all that the case decides.
In the case of Trefz, 104 U. S. 197, the assured, to questions about various diseases, answered, “Never sick”; and it distinctly appears that he was never sick of any of the diseases inquired about. And notwithstanding an apparent disclaimer by the court, the case obviously was in part determined upon the fact that the assured was a foreigner, unfamiliar with the English language.
In the case of Insurance Co. v. Trust Co., 112 U. S. 250, the inquiry was about an affection of the liver; and we think it is distinguishable from an inquiry about "headaches, severe, frequent, or protracted."
To avoid misconstruction, we state that we do not think, if the disability inquired about was not inherent, but was produced by extraordinary conditions, such as those described in the record, that the answer to the question should be held untrue.
For the purpose which will appear, we state that the following further inquiries were made of the assured, which his answers follow: “Do you ever drink wines, spirits, or malt liquors? No. To what extent? Not at all. Former habit of drinking wines, spirits, or malt liquors. Not at all."
Justice Ramsey desires it stated that, in his opinion, that part of the charge which instructs the jury that an occasional drink of liquor is not embraced in the application, and the questions and answers have no reference to an occasional indulgence, unless such drinking was habitual, was material error, for which the judgment should be reversed. He holds that the questions