Lowry v. Ætna Life Ins. Co.

• Decision Date: 24 September 1938
• Docket Number: No. 12368.,12368.
• Citation: 120 S.W.2d 505
• Parties: LOWRY v. ÆTNA LIFE INS. CO. et al.
• Court: Texas Court of Appeals

120 S.W.2d 505

LOWRY v. ÆTNA LIFE INS. CO. et al.

No. 12368.

Court of Civil Appeals of Texas. Dallas.

September 24, 1938.

Rehearing Denied October 22, 1938.

Appeal from District Court, Dallas County; Paine L. Bush, Judge.

Suit by Oren M. Lowry against the Ætna Life Insurance Company and others to recover on an accident insurance policy. Judgment for defendants, and the plaintiff appeals.

Judgment affirmed.

E. G. Senter and Sarah Cory Menezes, both of Dallas, for appellant.

Lawther & Cramer, of Dallas, for appellees.

YOUNG, Justice.

Oren M. Lowry sued Ætna Life Insurance Company, W. G. Harris and George V. Peak, Jr., to recover $30,000—interest, penalty and attorney fees—on an accident insurance policy issued by the company, insuring Robert C. Lowry; the plaintiff-brother of assured being named as beneficiary. W. G. Harris was general agent for the company in Dallas and Northeast Texas, through whose agency the policy in suit was issued, the same having been solicited by defendant Peak, who was authorized to solicit insurance, collect premiums, deliver renewal receipts, etc. On November 4, 1929, the insured was killed while en route from the City of Mexico to the City of Torreon in an aeroplane that crashed against a mountain 20 minutes out the City of Mexico. After some negotiations the company denied liability, on the sole ground that the policy lapsed September 15, 1929, for non-payment of the annual premium of $100. At the conclusion of the evidence, the court instructed a verdict for defendant Harris, but as to the other defendants the case was submitted to a jury on special issues and, based upon their answers, judgment was rendered for the defendants, from which this appeal was prosecuted.

In the course of the trial below, counsel for defendants correctly stated that, "The only question here is whether the policy was in force at the time he (insured) died; and then if he died under circumstances that would relieve the company of liability". It is conceded that the policy was in force up to and including September 14, 1929, the annual premium of $100 having previously (on November 28, 1928) been paid. Based upon these undisputed facts, plaintiff first contends that the policy was alive and in full force on November 4, 1929, the date of the accident—that is, that the payment of the annual premium (November 28, 1929) and its acceptance by the company, purchased insurance for twelve months from that date, therefore that the court erred in overruling his motion for judgment. The defendant contends that, plaintiff's pleading failed to present this issue, therefore, that the proposition urged should be overruled. Plaintiff's petition is quite lengthy and, we think, abundant allegations may be found upon which this contention may be predicated. Allegations are to the effect that, defendant's general agent and those under him were fully authorized to collect premiums, irrespective of the date of their maturities, and to reinstate policies and to maintain the contract in force, and it is alleged generally, that both the plaintiff and the insured had complied with all the provisions of the policy and that the death of the insured was not within the terms of any exception or qualification of the policy, excusing the defendant from the payment of all or any part of the stipulated indemnity.

The following provisions of the policy are pertinent to this inquiry that: "The principal sum of this policy is Thirty Thousand Dollars. The premium for term of this policy is One Hundred Dollars. The date of this policy is September 14th, 1927. This policy is issued for a term of Twelve (12) months to commence on the day this policy is dated, beginning and ending at twelve o'clock noon, standard time of the place where the insured resides, but it may be renewed with the consent of the company by the payment of the premium in advance at the Company's premium rate in force at the time of renewals". The policy also contained a provision for reinstatement, as follows: "If default be made in the payment of the agreed premium for this policy, the subsequent acceptance of a premium by the Company or by any of its duly authorized agents shall reinstate the policy, but only to recover loss resulting from accidental injury thereafter sustained".

The policy was not renewed under the renewal provision above set out, but was reinstated on November 28th, under the provision for reinstatement of lapsed policies. Upon a trial to a jury, their answers to issues submitted were: (1) that George V. Peak, Jr., did not agree with plaintiff, O. M. Lowry, prior to September 1, 1929, to notify the latter, should Robert C. Lowry fail to pay the premium on the policy, so that O. M. Lowry would be enabled to pay said 1929 premium in due time; (2) that before September 1, 1929, George V. Peak, Jr., had knowledge of the fact that Robert C. Lowry had taken employment with a company operating aeroplanes; (3) that George V. Peak, Jr., and Robert C. Lowry had an agreement that the $100 premium on the policy in suit might be paid to said Peak in quarterly installments; (4) that Peak had no authority to make such agreement on behalf of appellee; (5) that prior to September 14, 1929, Robert C. Lowry failed to keep his promise to pay said Peak a quarterly installment of $25 due in 1927, and similar installments of $25 for the year 1928; (6) at the time of his death said Lowry was traffic manager for a Mexican Aeroplane Company, and was not riding without payment of fare; and that Robert C. Lowry was never advised that the renewal receipt for 1929 had been sent from the home office of the company to Harris, the general agent, for delivery to said Lowry upon payment of the regular premium of $100. Under the above statement of the case, which we deem sufficient for the disposition of this appeal, it will be necessary only to discuss the first and second propositions of appellant based on numerous assignments of error; the remaining assignments, in the main, having been disposed of adversely to him by the jury answers, and which the evidence was sufficient to support. Such propositions are (the second being in the alternative):

(1) "The premium paid in 1928 created a new contract of insurance for a term of twelve months beginning November 28, 1928; and the policy was in force when insured died on November 4, 1929".

(2) "On the undisputed testimony of defendants and the insurance company's agents, the policy was continued in force for a term of twelve months beginning September 14, 1929 by virtue of credits extended by the company and its agents, subject to the company's power of cancellation, which was not exercised; and the policy was in force when insured died on November 4, 1929".

Neither as an issue of fact arising under the evidence nor as a matter of law, did the premium payment of November 28, 1928, create a new contract of insurance for a period of twelve months thereafter, by which the policy could be considered in force on November 4, 1929. There is no testimony in the record concerning the contents of this receipt and, of course, no justiciable issue is before us as to its wording. Elliott on Contracts, Vol. 5, par. 4288, cited by appellant, says: "Whether a renewal creates a new contract depends upon its terms. It has been held that every renewal of a policy of insurance being upon a new consideration and optional with both parties creates a new contract and is, unless otherwise expressed, subject to the terms and conditions which are contained in the original policy" (Italics ours).

We find the following statement in 24 Tex.Jur. page 741, Sec. 52. (Insurance), citing cases: "In the absence of an agreement to the contrary, the presumption is that the renewal of an insurance policy is upon the same terms and conditions and for the same amount as provided in the original policy". The terms, under the original policy of appellee, were for a period of twelve months intervening September 14th of each year. The 1929 receipt still in the possession of appellee's general agency, and placed in evidence by it, was to the same effect; but, as just stated, no issue having been raised by appellant as to the contents of the 1928 receipt, all matters relative to the terms thereof were waived. Dallas Hotel Co. v. Davison, Tex.Com.App., 23 S.W.2d 708. The question remains: Did the issuance by appellee of its renewal receipt of November 28, 1928, create a new contract of insurance, as a matter of law, continuing twelve months from that time, the insured's accidental death having occurred November 4th previously? We do not think so, under this record. It is not disputed that the insurance policy, theretofore issued, was reinstated by the delivery to Robert Lowry of such receipt, as authorized under the policy provision heretofore quoted. What is the ordinary or legal meaning of "reinstate"? It is defined in Webster's New International Dictionary as: "To enstate again; to place again (in possession or in a former state); to reinstall; to reestablish; to restore (to a state from which one has been removed)". Nowhere in Words & Phrases, from the first edition to the present (4th) is the word given any other legal meaning in the decisions than in substance the following: "To `reinstate' a policy holder or one who has allowed his policy to lapse does not mean new insurance or taking out a new policy, but does mean that the insured has been restored to all the benefits accruing to him under the policy contract, the original policy. Missouri State Life Ins. Co. v. Jensen, 139 Okl. 130, 281 P. 561, 562." See 3 Words and Phrases, Fourth Series, p. 349. The holding of the Commission of Appeals, in State Mutual Life Insurance Co. v. Rosenberry, 213 S. W. 242, 243, decided in 1919, is alone sufficient to justify the overruling of appellant's first proposition. It was there said [page 245]:

"There is some conflict in the authorities as to the effect of a reinstatement...