ÿWPC¸ …# VUNa %¯ 0(µw@Ý4 1 @ 0JH 0T’ 0^æ 0hD 0r¬ 0| 0†š 0 1u° U,% 0dQ U,µ U>á B)DCH AM‹U*Ø0 B2v~OvÓÍ D3  0@Ó AOÆb 0D( D/l B›˜HP LaserJet 4Si/4SiMX PS 600dpiPSCRIPTÀÌÀääÀÀÌ0 (ÈhH  Z ‹6Times New Roman RegularX($¡¡ RST[UeVDWeXYeZÓ€fz!3|xf2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô  ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)< Œ 9p`(ModernP ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(Monaco< Œ 9p`(&Times New Roman% Line 7 d 7Border 1dd€-!Cþÿ << Gÿÿ< Œ 9p`(Arial &Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÔ€#ÔÔ€#ÔÓ  ÓÔ YYY ÔFILEDÔ€#XÔÌÌò òSeptember€9,€1996ÌÌCecil€Crowson,€Jr.ÌÔ€#ôÔAppellate€Court€Clerkó ó dPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'@Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑMonacoÑÑ ÑÒ  BA Op Monaco ÒÒ  BA Op Monaco Ò%%%%'ÿÿdxd("ÿÿ$££Ò  ÒÒ  Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€ÔÓ&€X„d&ÓÑ#€Xd#ÑÔ€ÔÝ  Ý›Ñ\R AØ'\ÑÑ\R AØ'\ÑÑ7€Õ XXdìdÈ7ÑÑ  Ñœò ò›à@ àIN€THE€COURT€OF€APPEALS€OF€TENNESSEEó óÌà@ àò òWESTERN€SECTION€AT€JACKSONÌà àà àà àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ÌÌóóÌÌWILLIAM€BLAND€AND€LENA€BLAND,)à àÌà àà àà àà àà àà à)à àÌà àó óPlaintiffs/Appellees,ò òà àà àà à)à àó óShelby€Law€No.€32881€T.D.Ìà àà àà àà àà àà àò ò)Ìvs.à àà àà àà àà àà à)à à€Ìà àà àà àà àà àà à)ÌALLSTATE€INSURANCE€COMPANY,€€à à)à àó óAppeal€No.€02A01„9412„CV„00273Ìò òà àà àà àà àà àà à)à àà àÌó óà àDefendant/Appellant.à àà àò òà à)à àÌòòó óÌò òóóÌ€€€ÌÌÌà@ àó óAPPEAL€FROM€THE€CIRCUIT€COURT€OF€SHELBY€COUNTY̜ـ€ÙÙ€€ÙßL€"$!;+'h|¾` Å `€€Lß›à@ àAT€MEMPHIS,€TENNESSEEÌÌÌÌà@ àTHE€HONORABLE€ROBERT€A.€LANIER,€JUDGE€€ÌòòÌÌÌFor€the€Plaintiffs/Appelleesóó:òòà àà àà àFor€the€Defendant/Appellantóó:òòÌóóÌAlan€Bryant€Chambers€à àà àà àBruce€D.€Brooke€ÌTimothy€R.€Holton€à àà àà àà àMemphis,€TennesseeÌ€Memphis,€TennesseeÌÌò òÌÌÌà@ à€€€€€€€€€€€€AFFIRMED€ÌÌÌÌÌà àà àà àà àà àà àó óHOLLY€KIRBY€LILLARD,€J.ÌÌÌÌCONCUR:ÌÌòòÌóóW.€FRANK€CRAWFORD,€P.J.,€W.S.ÌÌÌHEWITT€P.€TOMLIN,€JR.,€SR.€J.ÇÓÓà@ àò òOPINIONó óÌà àThis€is€a€suit€brought€by€William€Bland€(Bland)€against€Allstate€Insurance€CompanyÏ(Allstate)€for€breach€of€contract€for€failure€to€pay€a€claim€under€his€homeownerððs€insurance€policy.€ÏAt€trial,€the€jury€found€for€Bland€and€awarded€him€damages€under€the€insurance€contract€for€theÏloss€of€his€home€and€its€contents€due€to€a€fire.€€Allstate€argued€at€trial€that€materialÏmisrepresentations€on€the€application,€as€a€matter€of€law,€warranted€Allstateððs€decision€to€void€ÏBlandððs€policy€ò òòòab€initioó óóó.€€Allstate€appeals€the€denial€of€its€motion€for€directed€verdict€and€allegesÏerror€in€a€number€of€the€jury€instructions.€€We€affirm€the€trial€court.Ìà àBland,€a€real€estate€agent,€had€a€homeownerððs€insurance€policy€with€Liberty€MutualÏInsurance€Company€(Liberty€Mutual).€€On€June€23,€1989,€Liberty€Mutual€sent€Bland€a€letterÏinforming€him€that,€due€to€several€recent€claims,€the€policy€would€not€be€renewed€when€it€expiredÏon€July€27,€1989.€€Bland€also€received€a€letter€from€his€mortgage€company€notifying€him€that€heÏwould€have€to€obtain€a€replacement€policy€for€homeownerððs€insurance.Ìà àBland€contacted€Loyal€Featherstone€(Featherstone),€a€fellow€real€estate€agent€who€also€soldÏinsurance€for€Allstate.€€Bland€had€shared€commissions€with€Featherstone€on€several€real€estateÏtransactions€in€the€past€and€had€also€referred€potential€insurance€customers€to€Featherstone.€ÏFeatherstone€agreed€to€try€to€get€coverage€for€Bland€with€Allstate.Ìà àAt€this€point€the€partiesðð€version€of€the€facts€diverge.€€Bland€testified€that€he€talked€toÏFeatherstone€several€times€on€the€telephone,€answering€Featherstoneððs€questions.€€Bland€stated€thatÏhe€went€to€Featherstoneððs€office€on€August€17,€1989.€€Featherstone€was€in€a€hurry,€so€BlandÏsigned€an€application€that€was€essentially€blank.€€Bland€asserted€that€the€only€items€filled€out€on€theÏform€were€his€name€and€social€security€number€and€his€wifeððs€name€and€social€security€number.€ÏWhen€Featherstone€asked€Bland€about€his€loss€history,€Bland€said€that€he€told€Featherstone€aboutÏone€fire€loss€and€also€told€him€that€there€were€other€losses,€the€dates€of€which€he€could€notÏremember.€According€to€Bland,€Featherstone€replied€that€he€would€turn€the€information€Bland€hadÏgiven€him€over€to€the€underwriters€and€that€they€would€find€out€the€rest€of€the€information€needed.€ÍBland€admitted€that€he€never€told€Featherstone€that€Liberty€Mutual€had€not€renewed€his€policy€butÏclaimed€that€he€gave€Featherstone€Liberty€Mutualððs€name€as€previous€insurer.€€Bland€alsoÏmaintained€that€Featherstone€never€asked€him€if€he€had€ever€had€a€policy€canceled€or€not€renewed.€ÏThere€were€numerous€errors€on€the€application,€but€Bland€claimed€that€all€the€errors€on€theÏapplication€were€Featherstoneððs€and€maintained€that€he€made€no€misrepresentations€toÏFeatherstone.€€On€the€back€of€the€application,€Blandððs€initials€appear€in€a€blank€for€the€applicantððsÏinitials.€€Bland€denied€writing€his€initials€on€the€application.Ìà àAllstate€contended€that€Bland€did€not€sign€a€blank€application.€€It€argued€that€FeatherstoneÏtook€the€application€information€from€Bland€in€person€and€that€all€the€misrepresentations€on€theÏform€were€made€by€Bland€to€Featherstone.€€Allstate€asserted€that€Bland€specifically€omitted€tellingÏFeatherstone€of€the€four€other€losses€in€Blandððs€loss€history€and€omitted€telling€Featherstone€thatÏLiberty€Mutual€had€failed€to€renew€his€homeownerððs€policy.Ìà àOn€the€basis€of€the€information€in€the€application,€Allstate€issued€a€policy€to€Bland.€€OnÏDecember€14,€1989,€Blandððs€residence€caught€fire,€causing€massive€damage€to€the€structure€and€itsÏcontents.€€Ìà àIn€the€ensuing€investigation,€Allstate€learned€of€Blandððs€prior€loss€history€and€of€LibertyÏMutualððs€nonrenewal€of€Blandððs€policy€with€them.€€On€January€9,€1990,€an€Allstate€investigator,ÏElvis€Morris€(Morris),€conducted€a€taped€interview€over€the€telephone€with€Bland.€€During€thisÏinterview,€Bland€told€Morris€that€he€could€not€remember€any€other€losses€with€any€companyÏbesides€the€one€fire€loss€listed€on€the€application,€that€Featherstone€had€asked€him€about€his€lossÏhistory,€and€that€the€application€had€been€taken€in€person.€€Bland€later€explained€that€he€was€drunkÏduring€the€interview€and€not€capable€of€giving€accurate€answers.Ìà àAs€a€result€of€its€investigation,€Allstate€voided€Blandððs€policy€òòò òab€initioó óóó€and€refusedÏpayment€of€the€claim.€€Bland€sued€Allstate€for€breach€of€contract.€€At€trial,€the€trial€judge€deniedÏAllstateððs€motion€for€a€directed€verdict,€and€the€jury€returned€a€verdict€in€Blandððs€favor.Ìà àAllstate€appeals€to€this€Court€on€several€grounds.€€First,€Allstate€claims€that€its€motion€for€aÍdirected€verdict€should€have€been€granted€by€the€trial€court€because€the€admitted€misrepresentationsÏon€the€application€materially€increased€Allstateððs€risk€of€loss€and€warranted€Allstateððs€decision€toÏvoid€the€policy€ò òòòab€initioó óóó.€€Allstate€also€asserts€several€errors€in€the€trial€courtððs€instructions€to€theÏjury.€€Allstate€claims€that€the€trial€court€erred€in€instructing€the€jury€on€the€effects€of€signing€anÏapplication€in€blank€and€on€waiver€and€estoppel.€€It€also€contends€that€the€trial€court€erred€inÏrefusing€to€instruct€the€jury€on€collusion€between€Featherstone€and€Bland€and€on€the€missingÏwitness€rule€in€respect€to€Featherstoneððs€absence€at€trial.€€Finally,€Allstate€argues€that€the€trial€courtÏerred€in€allowing€Bland€to€testify€as€to€what€Featherstone€told€him€during€their€conversations.€€Ìà àWe€first€consider€the€trial€courtððs€denial€of€Allstateððs€motion€for€directed€verdict.€€WhenÏdeciding€a€motion€for€directed€verdict,€both€the€trial€court€and€the€reviewing€court€on€appeal€mustÏlook€to€all€the€evidence,€take€the€strongest€legitimate€view€of€the€evidence€in€favor€of€the€opponentÏof€the€motion,€and€allow€all€reasonable€inferences€in€favor€of€that€party.€€The€court€must€discard€allÏcountervailing€evidence,€and€if€there€is€then€any€dispute€as€to€any€material€fact,€or€any€doubt€as€toÏthe€conclusions€to€be€drawn€from€the€whole€evidence,€the€motion€must€be€denied.€€òòò òTennesseeÏFarmers€Mut.€Ins.€Co.€v.€Hinsonó óóó,€651€S.W.2d€235€(Tenn.€App.€1983).€€A€directed€verdictÏcannot€be€sustained€if€there€is€material€evidence€in€the€record€which€would€support€a€verdict€for€theÏplaintiff.€€ò òòòWharton€Transport€Corp.€v.€Bridgesóóó ó,€606€S.W.2d€521€(Tenn.€1980).Ìà àAllstate€argues€that€Bland€made€material€misrepresentations€on€the€insurance€applicationÏand€that€these€misrepresentations€so€increased€Allstateððs€risk€of€loss€as€to€warrant€the€òòò òab€initioó óóóÏvoidance€of€the€policy.€€Tenn.€Code€Ann.€ðð€56„7„103€(1994)€provides:ÌÓÓà8 àNo€written€or€oral€misrepresentation€or€warranty€herein€made€in€the€negotiations€ofÏa€contract€or€policy€of€insurance,€or€in€the€application€therefor,€by€the€insured€or€inÏthe€insured's€behalf,€shall€be€deemed€material€or€defeat€or€void€the€policy€or€preventÏits€attaching,€unless€such€misrepresentation€or€warranty€is€made€with€actual€intent€toÏdeceive,€or€unless€the€matter€represented€increases€the€risk€of€loss.ÌÓÓÓÓÌÓÓT.C.A.€ðð€56„7„103€(1994).€€The€truth€or€lack€thereof€of€the€answers€to€questions€on€an€applicationÏfor€insurance€is€to€be€determined€by€the€trier€of€fact.€€ò òòòWomack€v.€Blue€Cross€&€Blue€Shieldóóó ó,€593ÍS.W.2d€294,€295€(Tenn.€1980).€€Whether€or€not€false€answers€on€an€application€increase€the€riskÏof€loss€for€the€insurance€company€remains€a€question€of€law€for€the€court€to€determine.€€ò òòòId.óóó óÌà àBland€admits€that€a€number€of€€the€answers€on€the€application€were€untrue,€and€theseÏanswers€undoubtedly€increased€Allstateððs€risk€of€loss.€€The€Tennessee€Supreme€Court€has€notedÏthat€ð ð€ðð[a]ny€misrepresentation€which€naturally€and€reasonably€influences€the€judgment€of€theÏinsurer€in€making€the€contract€is€a€misrepresentation€that€ð ðincreases€the€risk€of€lossðð€within€theÏmeaning€of€the€statute.ðð€ðð€òòò òBroyles€v.€Ford€Life€Ins.€Co.ó óóó,€594€S.W.2d€691,€693€(Tenn.€1980)Ï(quoting€òòò òLittle€v.€Washington€Natððl€Ins.€Co.ó óóó,€241€S.W.2d€838,€840€(Tenn.€App.€1951)).€€InÏaddition,€several€courts€have€held€that€misrepresentations€regarding€the€cancellation€of€priorÏinsurance€policies€or€of€the€refusal€of€an€insurer€to€renew€a€policy€constitute€an€increased€risk€ofÏloss€to€the€insurer.€€òòò òMedley€v.€Cimmaron€Ins.€Co.ó óóó,€514€S.W.2d€426,€428€(Tenn.€1974)Ï(automobile€policy);€òòò òGiles€v.€Allstate€Ins.€Co.ó óóó,€871€S.W.2d€154,€156€(Tenn.€App.€1993)Ï(homeownerððs€policy);€òòò òMilligan€v.€MFA€Mut.€Ins.€Co.ó óóó,€497€S.W.2d€736,€739€(Tenn.€App.Ï1973)€(automobile€policy).€€The€misrepresentations€regarding€Blandððs€loss€history€and€LibertyÏMutualððs€nonrenewal€increased€the€risk€of€loss€to€Allstate.€€This€fact€must€be€considered€in€light€of€ÏBlandððs€claim€that€he€signed€the€application€in€blank€and€that€the€misrepresentations€on€it€wereÏsolely€the€fault€of€Allstateððs€agent,€Featherstone.Ìà àBland€argues€that€Tenn.€Code€Ann.€ðð€56„7„103€only€applies€to€misrepresentations€made€byÏthe€applicant,€not€mistakes€or€misrepresentations€on€the€part€of€the€agent€who€takes€the€application,Ïunless€the€applicant€certifies€the€misrepresentations€when€he€signs€the€application,€acts€in€collusionÏwith€the€agent,€or€knows€or€has€reason€to€know€that€the€agent€will€not€divulge€the€true€facts€to€hisÏcompany.€€Thus,€an€applicant€who€innocently€signs€an€application€in€blank,€trusting€the€agent€toÏfill€in€the€correct€information,€is€not€responsible€for€misrepresentations€made€by€the€agent,€even€ifÏthose€misrepresentations€increase€the€risk€of€loss€on€the€policy€for€the€insurance€company.€Ìà àTwo€Tennessee€decisions€present€somewhat€similar€facts.€€In€òòò òHurley€v.€TennesseeÍFarmers€Mutual€Insurance€Co.ó óóó,€922€S.W.2d€887€(Tenn.€App.€1995),€the€plaintiff€had€aÏhomeownerððs€policy€and€had€previously€had€an€automobile€policy€with€the€defendant€insuranceÏcompany.€€ò òòòIdó óóó.€at€890.€€The€plaintiff€applied€with€the€defendant€for€automobile€insurance.€€òòò òId.ó óóó€atÏ889„90.€€After€the€new€automobile€policy€went€into€effect,€the€covered€automobile€was€stolen.€€òòò òId.ó óóóÏat€890.€The€insurance€company€then€discovered€that€the€application€contained€misrepresentationsÏwhich€increased€the€risk€of€loss€to€the€company,€thereby€warranting€denial€of€the€claim.€€òòò òId.ó óóó€€TheÏplaintiff€asserted€that€he€had€signed€the€policy€while€it€was€blank€and€had€never€been€asked€any€ofÏthe€questions€on€the€application.€€òòò òId.ó óóó€€The€plaintiff€prevailed€at€trial,€and€on€appeal€the€defendantÏclaimed€it€should€have€been€granted€a€directed€verdict€based€upon€the€material€misrepresentations€inÏthe€application.€€òòò òId.ó óóó€at€889.€€The€defendant€conceded€that€ð ðif€the€application€was€signed€in€blankÏthen€there€were€no€material€misrepresentations€made€by€plaintiff€which€would€void€the€policy.ðð€€òòò òId.ó óóóÏat€891.€€This€Court€determined€that€there€was€a€material€issue€of€fact€as€to€whether€the€applicationÏhad€been€signed€in€blank€and€that€a€directed€verdict€was€therefore€inappropriate.€€òòò òId.ó óóó€at€891„92.€ÏHowever,€there€was€no€discussion€of€the€legal€effect€of€an€applicant€signing€an€insuranceÏapplication€in€blank.Ìà àIn€òòò òTransamerica€Insurance€Co.€v.€Koonceó óóó,€No.€116,€1986€WL€5246€(Tenn.€App.€MayÏ6,€1986),€the€insurance€companyððs€agent,€in€his€own€handwriting,€filled€out€an€application€forÏhomeownerððs€insurance€based€on€information€given€him€by€the€applicant.€€òòò òId.ó óóó€at€*1.€€He€then€hadÏthe€applicant€sign€both€the€handwritten€application€and€a€blank€application.€€òòò òId.ó óóó€€Both€applicationsÏwere€sent€to€a€branch€office,€where€another€agent€typed€in€the€answers€on€the€blank€signed€form,Ïbased€on€the€handwritten€form€and€on€additional€information€obtained€over€the€telephone€from€theÏapplicant.€€òòò òId.ó óóó€€This€agent€then€sent€the€typed€application€to€the€insurance€company,€and€theÏcompany€issued€a€policy€to€the€applicant.€€òòò òId.ó óóó€€After€the€covered€house€was€destroyed€by€fire,€theÏcompany€discovered€that€the€typed€application€contained€misrepresentations.€€There€were€materialÏvariations€between€the€handwritten€form€and€the€typed€one.€€òòò òId.ó óóó€€€The€insurance€company€filed€forÍdeclaratory€judgment€to€determine,€among€other€things,€who€was€responsible€for€theÏmisrepresentations€on€the€application.€€òòò òId.ó óóó€at€*2.€€The€trial€court€found€that€the€company€ð ðwasÏaware€that€the€material€misrepresentations€contained€in€the€typed€application€upon€which€the€policyÏwas€issued€were€made€by€agents€of€the€plaintiff€and€that€these€misrepresentations€could€in€no€wayÏbe€chargeable€to€the€insured.ðð€€òòò òId.ó óóó€€The€trial€court€entered€a€decree€against€the€insurance€company,Ïordering€recovery€by€the€insured€pursuant€to€the€policy.€€On€appeal,€the€insurance€company€did€notÏseek€review€of€the€trial€courtððs€finding€regarding€the€legal€effect€of€the€misrepresentations€on€theÏapplication.€€ò òòòId.ó óóó€Ìà àOf€course,€the€knowledge€of€an€agent€is€imputed€to€his€principal.€€òòò òGriffith€Motors,€Inc.€v.ÏParkeró óóó,€633€S.W.2d€319,€322€(Tenn.€App.€1982);€òòò òAmerican€General€Life€Ins.€Co.€v.€Gilbertó óóó,Ï595€S.W.2d€83,€87€(Tenn.€App.€1979).€€In€addition,€ð ðan€agent€acting€within€the€general€scope€ofÏhis€apparent€authority,€though€exceeding€his€authority,€binds€his€principal.ðð€€òòò òIndustrial€Life€&ÏHealth€Ins.€Co.€v.€Trinkleó óóó,€206€S.W.2d€414,€415€(Tenn.€1947).€€Applying€this€principle,€ifÏBland€answered€the€questions€truthfully€which€were€asked€by€Featherstone,€anyÏmisrepresentations€which€Featherstone€made€are€Allstateððs€responsibility.€€Ìà àAllstate€notes€that€there€are€exceptions€to€the€imputed€knowledge€rule.€€The€knowledge€ofÏthe€agent€is€not€imputed€to€his€principal€when€the€agent€acts€in€his€own€interest€or€when€the€interestÏof€the€agent€is€adverse€to€that€of€the€principal,€making€it€disadvantageous€for€the€agent€to€discloseÏthe€information€to€the€principal.€€òòò òCorim,€Inc.€v.€Sam€Blair€Co.ó óóó,€721€S.W.2d€256,€259€(Tenn.ÏApp.€1986);€òòò òGriffith€Motors,€Inc.€v.€Parkeró óóó,€633€S.W.2d€319,€322€(Tenn.€App.€1982).€€ThisÏexception€does€not€apply,€however,€in€those€instances€in€which€the€agent€is€acting€as€the€soleÏrepresentative€of€the€principal€in€the€transaction€in€question.€€òòò òGriffith€Motorsó óóó,€633€S.W.2d€at€322;Ïòòò òState€v.€Candleró óóó,€728€S.W.2d€756,€759€(Tenn.€Crim.€App.€1986).€€The€record€does€not€clearlyÏestablish€that€Featherstone€was€acting€in€his€own€interest,€an€interest€adverse€to€that€of€Allstate.€ÏNevertheless,€even€if€he€were,€he€was€clearly€acting€as€Allstateððs€sole€representative.€€There€is€noÍevidence€that€Bland€had€dealings€with€any€other€Allstate€officer€but€Featherstone,€who€wasÏinvested€with€Allstateððs€authority€to€act€as€its€legal€representative.€€Ìà àAllstate€also€argues€that€the€imputed€knowledge€rule€does€not€apply€when€a€third€party,Ïsuch€as€an€applicant€for€insurance,€seeks€to€defraud€the€principal:ÌÓÓà8 àThe€rule€imputing€an€agentððs€knowledge€to€the€principal€is€designed€to€protect€onlyÏthose€who€exercise€good€faith€and€is€not€intended€to€serve€as€a€shield€for€unfairÏdealing€by€the€third€person.€€The€rule€may€not€be€invoked€where€third€persons€useÏthe€agent€to€further€their€own€frauds€upon€the€principal,€or€where€the€third€personÏdid€not€intend€or€expect€that€the€agent€would€communicate€the€facts€or€the€truth€toÏthe€principal€as€where€the€third€person€colludes€with€the€agent€in€acting€adversely€toÏthe€principal.ÌÌÓÓòòò òCandleró óóó,€728€S.W.2d€at€759€(citing€òòò òDeFord€v.€National€Life€&€Accident€Ins.€Co.ó óóó,€182€Tenn.Ï255,€185€S.W.2d€617€(1945)).€€In€this€case,€however,€there€is€no€evidence€demonstratingÏcollusion€between€Bland€and€Featherstone€and€no€evidence€that€Bland€intended€to€defraud€Allstate.€ÏThere€is€ample€proof€from€which€the€jury€could€find€that€Bland€gave€Featherstone€the€informationÏhe€could€remember€and€told€Featherstone€where€he€could€discover€the€rest.€€There€is€no€evidenceÏthat€Bland€knew€that€Featherstone€would€not€communicate€the€truth€to€Allstate.€Ìà àTennessee€case€law€provides€only€limited€guidance€on€the€legal€effect€of€signing€anÏapplication€in€blank.€€In€òòò òHale€v.€Sovereign€Camp€Woodmen€of€the€Worldó óóó,€143€Tenn.€555,€226ÏS.W.€1045€(1920),€an€insurance€applicant€truthfully€filled€out€the€first€page€of€an€application€andÏtruthfully€answered€questions€posed€him€by€the€insurance€companyððs€physician.€€òòò òId.ó óóó€at€558,€560„61.€€The€physician€recorded€these€answers€on€the€second€page€of€the€application,€and€both€he€and€Ïthe€applicant€signed€this€page.€€òòò òId.ó óóó€at€560.€€A€third€page€was€filled€out€by€the€physician€based€uponÏa€physical€examination€of€the€applicant€and€was€signed€only€by€the€physician.€€òòò òId.ó óóó€at€558,€560.€ÏWhen€the€application€reached€the€insurance€company,€though,€there€was€false€information€on€bothÏthe€second€and€third€page,€and€the€signatures€on€both€those€pages€turned€out€to€be€forgeries.€€òòò òId.ó óóó€atÏ558„59.€€After€the€applicantððs€death,€the€company€refused€to€honor€the€policy€based€on€theÏmisrepresentations€contained€in€the€application.€€òòò òId.ó óóó€at€557.€€The€Court€determined€that€the€pagesÍoriginally€filled€out€by€the€physician€had€been€bogus€pages€and€that€someone€whom€the€CourtÏcould€not€identify€had€fraudulently€filled€out€the€original€second€and€third€pages,€forged€theÏsignatures€thereon,€and€sent€the€application€to€the€company.€€òòò òId.ó óóó€at€561,€563.Ìà àThe€òòò òHaleó óóó€Court€first€noted€that€the€knowledge€of€an€agent€is€imputed€to€his€principal€andÏthat€this€rule€applies€to€insurance€contracts.€€òòò òId.ó óóó€at€561„62.€€The€Court€then€pointed€out€that€aÏphysician€is€an€agent€of€the€insurance€company€for€whom€he€works€when€he€conducts€a€medicalÏexamination€and€fills€out€an€application.€€òòò òId.ó óóó€at€562„63.€€The€knowledge€of€the€physician€gainedÏwithin€his€limited€scope€of€authority€is€imputed€to€his€principal,€even€when€the€physician,€afterÏhaving€been€told€the€truth€by€the€applicant,€inserts€false€statements€in€the€application.€€òòò òId.ó óóó€€TheÏCourt€did€not€believe€that€the€physician€had€been€responsible€for€the€fraudulent€answers€and€forgedÏsignatures.€€Nevertheless,€it€found€that€either€the€clerk€who€sent€the€falsified€application€to€theÏcompany€was€negligent€in€so€doing€or€the€physician€had€been€negligent€in€forwarding€a€falsifiedÏapplication€to€the€clerk.€€òòò òId.ó óóó€at€563„66.Ìà àThe€defendant€insurance€company€in€ò òòòHale€ó óóócontended€that€the€applicant€had€warranted€theÏtruth€of€the€representations€on€the€second€page€by€signing€statements€on€the€first€page€that€heÏattested€to€the€truth€of€the€information€on€both€the€first€and€second€pages.€€òòò òId.ó óóó€at€566„67.€€TheÏCourt€found€that€it€had€been€the€physicianððs€duty€to€procure€the€signature€of€the€applicant€on€theÏsecond€page€of€the€application€and€that€the€applicant€had€been€entitled€to€believe€that€the€pageÏpresented€him€for€his€signature€was€òòò òbona€fideó óóó,€not€a€bogus€copy.€€òòò òId.ó óóó€at€567.€€The€CourtÏconcluded:ÌÓÓà8 àThe€defendant€cannot€in€good€conscience€rely€on€a€mistake€of€the€deceased€inducedÏby€its€own€agent€within€the€scope€of€his€authority.€€There€are€numerous€cases€in€theÏbooks€where€the€deceased€has€been€held€not€bound€by€false€statements€contained€inÏan€application€which€he€signed€prior€to€its€completion,€and€which€application€wasÏfilled€out€with€fraudulent€matter€thereafter€by€the€local€agent€of€the€assurer.€€ÌÌÓÓòòò òId.ó óóó€at€567.€€So€while€ò òòòHaleó óóó€does€not€present€facts€identical€to€those€in€this€case,€it€suggests€thatÏAllstate€is€responsible€for€Featherstoneððs€misrepresentation€on€Blandððs€application.€€€Ìà àOther€Tennessee€cases€provide€helpful€background€but€are€factually€distinguishable.€€InÏòòò òBerryhill€v.€Mutual€Ben.€Health€&€Accident€Assððnó óóó,€262€S.W.2d€878€(Tenn.€App.€1953),€theÏCourt€upheld€a€verdict€for€an€insurance€applicant€where€he€had€answered€the€insurance€agentððsÏquestions€truthfully,€the€agent€wrote€wrong€answers€on€the€application€without€the€applicantððsÏknowledge,€there€was€no€evidence€of€fraud€or€of€collusion€with€the€agent,€and€there€wasÏconflicting€evidence.€€The€jury€found€for€the€applicant.€€òòò òId.ó óóó€at€880.€€The€opinion€does€not€state€theÏpoint€at€which€the€applicant€signed€the€application.€Ìà àCases€in€which€courts€have€refused€to€enforce€the€insurance€policy€based€onÏmisrepresentations€in€the€application€are€also€factually€distinguishable€from€the€present€case.€€SomeÏof€the€cases€involve€situations€where€the€applicant€told€the€truth€to€the€agent,€the€agent€then€filledÏout€the€application€with€false€answers,€and€the€applicant€signed€the€application€containing€theÏmisrepresentations€without€reading€it.€€òòò òBeasley€v.€Metropolitan€Life€Ins.€Co.ó óóó,€190€Tenn.€227,€229ÏS.W.2d€146€(1950);€òòò òGiles€v.€Allstate€Ins.€Co.ó óóó,€871€S.W.2d€154€(Tenn.€App.€1993);€òòò òMontgomeryÏv.€Reserve€Life€Ins.€Co.ó óóó,€585€S.W.2d€620€(Tenn.€App.€1979);€òòò òHardin€v.€Combined€Ins.€Co.€ofÏAm.ó óóó,€528€S.W.2d€31€(Tenn.€App.€1975).€€Others€involve€situations€in€which€theÏmisrepresentation€originated€with€the€insurance€agent€but€the€applicant€failed€to€correct€theÏinformation,€allowed€the€agent€to€record€the€misrepresentation,€or€failed€to€inform€the€insuranceÏcompany€after€becoming€aware€of€the€error.€€òòò òTegethoff€v.€Metropolitan€Life€Ins.€Co.ó óóó,€424ÏS.W.2d€565€(Tenn.€App.€1966);€òòò òNational€Life€&€Accident€Ins.€Co.€v.€Atwoodó óóó,€194€S.W.2d€350Ï(Tenn.€App.€1946).€€Some€cases€present€situations€where€the€applicant€had€reason€to€know€that€theÏinsurance€agent€was€not€disclosing€the€full€facts€to€his€company,€thereby€acquiescing€in€the€fraud.€Ïòòò òDeFord€v.€National€Life€&€Accident€Ins.€Co.ó óóó,€182€Tenn.€255,€185€S.W.2d€617€(1945);€òòò òTharp€v.ÏWoodmen€of€the€World€Life€Ins.€Socððyó óóó,€768€S.W.2d€701€(Tenn.€App.€1989);€òòò òAmerican€Gen.ÏLife€Ins.€Co.€v.€Gilbertó óóó,€595€S.W.2d€83€(Tenn.€App.€1979).€€In€still€other€cases,€the€applicant,Ïeither€with€or€without€intent€to€deceive,€gave€false€answers€to€the€agent€which€materially€increasedÍthe€companyððs€risk€of€loss.€€òòò òMilligan€v.€MFA€Mut.€Ins.€Co.ó óóó,€497€S.W.2d€736€(Tenn.€App.Ï1973);€òòò òJefferson€Standard€Life€Ins.€Co.€v.€Webbó óóó,€406€S.W.2d€738€(Tenn.€App.€1966).€€Finally,Ïin€some€cases€the€applicant€withheld€information,€either€knowingly€or€unknowingly,€whichÏincreased€the€risk€of€loss.€€òòò òBroyles€v.€Ford€Life€Ins.€Co.ó óóó,€594€S.W.2d€691€(Tenn.€1980);€òòò òClinganÏv.€Vulcan€Life€Ins.€Co.ó óóó,€694€S.W.2d€327€(Tenn.€App.€1985).Ìà àAt€least€one€treatise€on€insurance€law€provides€support€for€Blandððs€position€on€signing€anÏapplication€in€blank.€€òòò òCouch€on€Insurance€2dó óóó€states€that€ð ð[i]f€an€applicant€merely€signs€anÏapplication€in€blank,€an€insurance€agent€may€bind€his€company€by€filling€out€the€blanks€upon€hisÏown€motion,€and€without€authority€or€direction.ðð€€4€George€J.€Couch,€et€al.,€òòò òCouch€on€InsuranceÏ2dó óóó€ðð€26A:3€(rev.€vol.€1984).€€Under€this€principle,€Allstate€would€be€bound€by€FeatherstoneððsÏactions€in€filling€out€the€application€Bland€signed€in€blank.Ìà àIn€this€case,€there€was€sufficient€evidence€from€which€the€jury€could€reasonably€find€thatÏthe€applicant€Bland€signed€the€insurance€application€in€blank€and€that€the€agent€Featherstone€filledÏout€the€application€containing€the€erroneous€information€and€omitting€other€significant€information.€ÏThere€was€not€sufficient€evidence€from€which€the€jury€could€find€collusion€between€Bland€andÏFeatherstone.Ìà àAfter€reviewing€the€case€law€and€other€authority,€under€the€circumstances€presented€here,€Ïwe€conclude€that€the€insurance€policy€cannot€be€voided€based€on€falsehoods€or€errors€in€theÏapplication,€even€though€they€materially€increase€the€risk€of€loss.€€The€trial€court€is€affirmed€on€thisÏissue.Ìà àAllstate€asserts€a€number€of€errors€in€the€trial€courtððs€instructions€to€the€jury.€€It€argues€thatÏthe€trial€court€erred€in€giving€Blandððs€requested€instruction€on€estoppel€because€Bland€did€notÏaffirmatively€plead€estoppel€in€his€complaint.€€While€estoppel€is€a€defense€that€must€beÏaffirmatively€plead€in€a€defensive€pleading,€under€Rule€8.03€of€the€Tennessee€Rules€of€CivilÏProcedure,€there€is€no€such€requirement€for€a€complaint.€€We€find€no€error€in€the€trial€courtððsÍdecision€to€include€this€instruction.€€Ìà àAllstate€also€contends€that€the€trial€court€erred€in€omitting€Allstateððs€requested€instructionsÏon€collusion€and€the€missing€witness€rule.€€On€collusion,€Allstate€argues€that€the€businessÏrelationship€between€Bland€and€Featherstone€was€sufficient€evidence€of€collusion€between€them€toÏrequire€the€trial€court€to€instruct€the€jury€on€the€issue€of€collusion€or€fraud€by€an€agent.€€ThisÏevidence€was€not€sufficient€for€the€jury€to€find€collusion€or€fraud,€and€we€find€no€error€in€the€trialÏcourtððs€omission€of€this€instruction.€Ìà àAllstate€asserts€further€that€the€trial€court€erred€in€refusing€to€give€the€jury€TennesseeÏPattern€Jury€Instruction„„Civil€2.03€that€the€jury€could€infer€from€Featherstoneððs€absence€that€hisÏtestimony€would€have€been€adverse€to€Bland.€€Allstate€bases€this€argument€on€the€fact€thatÏFeatherstone€continued€to€reside€in€Shelby€County,€continued€to€have€a€business€relationship€withÏBland,€executed€an€affidavit€for€Blandððs€attorney,€and€was€no€longer€employed€by€Allstate.€Ìà àThe€missing€witness€rule,€however,€is€inapplicable€where€the€witness€was€equally€availableÏto€both€parties€and€it€seems€no€more€likely€that€his€testimony€would€favor€the€plaintiff€than€theÏdefendant.€€ò òòòWaller€v.€Skeletonó óóó,€31€Tenn.€App.€103,€118,€212€S.W.2d€690,€697€(1948).€€In€thisÏcase,€there€is€no€evidence€that€Featherstone€was€not€equally€available€to€both€parties.€ÏFeatherstoneððs€testimony€could€have€benefitted€Allstate€had€he€testified€that€he€got€the€informationÏon€the€application€from€Bland,€as€Allstate€alleged.€€We€find€no€error€in€the€trial€courtððs€refusal€ofÏthis€jury€instruction.€€Ìà àFinally,€Allstate€argues€that€trial€court€erred€in€allowing€Bland€to€testify€aboutÏFeatherstone's€hearsay€statements.€€Even€if€Featherstoneððs€statements€were€offered€for€the€truth€ofÏthe€matter€asserted,€the€statements€are€permissible€under€the€party€opponent€exception€in€TennesseeÏRule€803(1.2)(D).€€We€find€no€error€in€the€trial€court€admitting€this€testimony.Ì€à àThe€decision€of€the€trial€court€is€affirmed€on€all€issues.€€Costs€of€appeal€are€assessedÏagainst€appellant€Allstate,€for€which€execution€may€issue€if€necessary.ÌÌÓÓÌà àà àà àà àà àà àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ìà àà àà àà àà àà àò òóóHOLLY€KIRBY€LILLARD,€J.ÌÌCONCUR:ÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ÌóóW.€FRANK€CRAWFORD,€P.€J.,€W.S.ÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌHEWITT€P.€TOMLIN,€JR.,€SR.€J.ó ó