Fields v. Universal Life & Acc. Ins. Co.

Decision Date15 February 1968
Docket NumberNo. 15059,15059
Citation424 S.W.2d 704
PartiesGeneva FIELDS, d/b/a Fields Funeral Home, Appellant, v. UNIVERSAL LIFE AND ACCIDENT INSURANCE COMPANY, Appellee. . Houston (1st Dist.)
CourtTexas Court of Appeals

Herschel B. Cashin, of La Marque, for appellant.

Dibrell, Dibrell & Greer, G. William Rider, of Galveston, for appellee.

COLEMAN, Justice.

ON REMAND FROM SUPREME COURT

This is a suit to cancel an insurance policy. The question to be determined is whether such a suit filed by an insurance company within two years after the policy was issued amounted to a contest within the meaning of the incontestable clause contained in the insurance policy where citation was issued promptly, but was not served until after two years had elapsed from the date of the policy .

The policy was issued on May 22, 1961. The insured died April 16, 1963. A claim for benefits under the policy dated April 20, 1963, was presented to the Company signed by the beneficiary, Willie Taylor, in which his address was shown as 3309 De Soto Street, Houston, Texas. On May 18, 1963, the Insurance Company received an instrument signed by Willie Taylor authorizing and directing it to pay from the proceeds of the policy in question, and another policy, the sum of $713.00 to Fields Funeral Home. This instrument was signed and acknowledged before a notary public in Galveston County, Texas.

This suit was filed at 4:25 o'clock p.m., May 21, 1963, in a County Court of Dallas County, Texas. It named both Willie Taylor and Fields Funeral Home defendants. Citations were prepared in the office of the Dallas County Clerk, and transmitted by mail to appellee's attorney in Dallas, who received them on May 22 or 23, 1963. They were mailed to the Sheriffs of Harris and Galveston Counties, and were received May, 24, 1963, two days after the second anniversary date of the policy. Because of improper service, the citation directed to Willie Fields, d/b/a Fields Funeral Home, was quashed pursuant to motion filed June 12, 1963, by an order reciting he 'shall be deemed to have entered his appearance at 10:00 a.m. on the Monday next after the expiration of twenty days following the date of this order * * *' This date fell on August 5, 1963.

Willie Taylor was not found in Harris County and the citation was returned. He was later located in Galveston County and the citation was served subsequent to June 5, 1963.

On plea of privilege, this cause was transferred to the County Court at Law No. 2, Galveston County, Texas. The case was tried to a jury, but at the conclusion of the evidence the trial court withdrew the case from the jury and rendered judgment for the plaintiff Insurance Company.

The policy of insurance in question provides: '* * * this Policy shall be incontestable after two years from its date * * *.'

Article 3.44 of the Insurance Code of Texas, V.A.T.S., provides, in part:

'No policy of life insurance shall be issued or delivered in this State * * * unless the same shall contain provisions substantially as follows:

'(3) That the policy * * * shall be incontestable not later than two years from its date, except for non-payment of premiums; * * *.'

In Trevino v. American Nat. Ins. Co., 168 S.W.2d 656 (Tex.Com.App. 1943, opinion adopted), the Court said:

'The language of the incontestable clause and of the statute (Sec. 3, Art. 4732) in the use of the words 'contested' and 'incontestable' contemplates and intends to require the institution within the specified period of a proceeding in court to cancel the policy on account of original invalidity or the filing, within that period in a suit brought on the policy, of an answer setting up a ground of original invalidity to defeat recovery. American Nat. Ins. Co. v. Welsh, Tex.Com.App., 22 S.W.2d 1063, Tex.Civ.App., 3 S.W.2d 946; Southern Surety Co. v. Benton, Tex .Com.App., 280 S.W. 551; Humpston v. State Mutual Life Assur. Co., (of Worcester, Mass.,), 148 Tenn. 439, 256 S.W. 438, 31 A.L.R. 78; Mutual Reserve Fund Life Ass'n v. Austin, 1 Cir., 142 F. 398, 73 C.C .A. 498, 6 L.R.A.,N.S., 1064.'

In Patton v. American Home Mut. Life Ins. Co., 143 Tex. 373, 185 S .W.2d 420 (1945), the Supreme Court quoted the excerpt from the opinion in Trevino v. American Nat. Ins. Co. appearing above, and said:

'It is our opinion that insurer's defense of fraud was not authorized by Article 5049 and that such a defense was precluded by the incontestable clause of the policy for the reason that the same was not presented in court within the stipulated period of two years .'

In Patton the court equated the words 'presented in court' with 'filing in a suit brought on the policy'. When an answer is filed in a pending suit, it is clear that a 'contest' has begun. It is somewhat less clear that a 'contest' is begun merely by filing a suit.

In Travelers Insurance Company v. Brown, 402 S.W.2d 500 (Tex.Sup.1966), a suit was brought on a 'voluntary Compensation Endorsement' to a policy of insurance. This endorsement provided benefits similar to those available under the Workmen's Compensation Act to injured employees. It contained a provision that if 'any person shall commence any proceeding at law, in equity or in admiralty except for such payment, seeking damages from the insured * * * the Company's liability * * * is thereupon terminated.' The plaintiff, unaware of the compensation endorsement, filed a suit for damages and, later, a claim for compensation benefits. Prior to the trial of this case, the damage suit was dismissed. In this opinion the Court said:

'The meaning ascribed to 'commence' by the dictionary is not the only reasonable meaning of the word when it is used to refer to the beginning of a legal proceeding. It has different meanings in different jurisdictions, and even different meanings in different legal proceedings in the same jurisdiction. See 1 Am.Jur.2d 646--650, Actions, §§ 126--130; 1 C.J.S. Actions § 129, pp. 1396--1404; 7A Words and Phrases, pp. 397--438; 1 Tex.Jur.2d 545--548, § 39. By way of example that the dictionary meaning is not the only meaning the Supreme Court of the United States held in Herb v. Pitcairn, 325 U.S. 77, 65 S.Ct. 954, 89 L.Ed. 1483, 1487--1488 (1944), that a suit was 'commenced within the limitation provision of the Federal Employers' Liability Act 'when instituted By service of process issued out of a state court.'

'decisions of courts of other jurisdictions may be put aside. In spite of the wording of Art. 1971, Vernon's Texas Civil Statutes, which was repealed when incorporated in Rule 22, this Court has often held that the commencement of a suit or action requires something more than the mere filing of a petition. In Russell v. Taylor, 121 Tex. 450, 49 S.W.2d 733, 737 (1932), we recognized that 'the mere physical filing of a petition' without 'a bona fide intention * * * to obtain service and prosecute the suit' was not sufficient to abate a second suit involving the same parties and issues. See also V. D. Anderson Co. v. Young, 128 Tex. 631, 101 S.W .2d 798, 800 (1937). We held in Owen v. City of Eastland, 124 Tex. 419, 78 S.W.2d 178, 179 (1935), that the mere filing of a petition 'is not all that is required to 'commerce' a suit within the meaning of Art. 5529 which requires that certain suits 'be brought within four years next after the right to bring the same shall have accrued.' See also Ricker v. Shoemaker, 81 Tex. 22, 16 S.W. 645 (1891). In August Kern Barber Supply Co. v. Freeze, 96 Tex. 513, 74 S.W. 303, 305 (1903), we recognized that '(t)he issuance of citation in a justice's court is the commencement of the suit,' but we held that '(t)he issuance of process which cannot possibly bring the defendant before the court cannot be considered the commencement of a suit.' These cases are not cited as controlling authority in the instant case but as illustrating that the mere filing of a petition does not always fulfill even statutory requirements for 'commencement' of a suit.'

The policy behind the requirement that insurance policies must contain incontestability clauses was stated by Chief Justice Cardozo of the Court of Appeals of New York in these words:

'Repudiation is, indeed, an act too uncertain, one resting too often in biased recollection, to be accepted as the equivalent of ordered battle in the courts. The value of a clause declaring a policy incontestable lies to no slight degree in...

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3 cases
  • Cardenas v. United of Omaha Life Ins. Co.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • September 30, 2013
    ...is not inconsistent with the rationale behind incontestability clauses. See Fields v. Universal Life & Accident Ins. Co., 424 S.W.2d 704, 707 (Tex.Civ.App.–Houston [1st Dist.] 1968, writ dism'd w.o.j.); 29 Appleman § 178.03[A]. We find unpersuasive any argument that the legislature intended......
  • Cardenas v. United of Omaha Life Ins. Co.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • September 30, 2013
    ...this result is not inconsistent with the rationale behind incontestability clauses. See Fields v. Universal Life & Accident Ins. Co., 424 S.W.2d 704, 707 (Tex. Civ. App.—Houston [1st Dist.] 1968, writ dism'd w.o.j.); 29 Appleman § 178.03[A]. We find unpersuasive any argument that the legisl......
  • Cardenas v. United of Omaha Life Ins. Co., 12-51295
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • October 23, 2013
    ...is not inconsistent with the rationale behind incontestability clauses. See Fields v. Universal Life & Accident Ins. Co., 424 S.W.2d 704, 707 (Tex. Civ. App.—Houston [1st Dist.] 1968, writ dism'd w.o.j.); 29 Appleman § 178.03[A]. We find unpersuasive any argument that the legislature intend......

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