Ætna Life Ins. Co. v. Dunken

• Decision Date: 15 November 1922
• Docket Number: (No. 6492.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 248 S.W. 165
• Parties: ÆTNA LIFE INS. CO. OF HARTFORD, CONN., v. DUNKEN.
• Court: Texas Court of Appeals

248 S.W. 165

ÆTNA LIFE INS. CO. OF HARTFORD, CONN., v. DUNKEN.

(No. 6492.)^*

Court of Civil Appeals of Texas. Austin.

November 15, 1922.

Rehearing Denied January 17, 1923.

Appeal from District Court, McLennan County; Prentice Oltorf, Judge.

Action by Mrs. Pearl Stone Dunken, administratrix, against the Ætna Life Insurance Company of Hartford, Conn. Judgment for plaintiff, and defendant appeals. Affirmed.

Wm. J. Moroney, of Dallas, for appellant.

W. E. Spell and Stanford & Stanford, all of Waco, for appellee.

Findings of Fact.

JENKINS, J.

The appellant is a life insurance company; its home office is at Hartford, Conn. Its vice president, J. L. English, and its assistant secretary, W. H. Newell, during the times herein mentioned, were two of its executive officers. H. B. Alexander was its manager for the state of Tennessee. On December 17, 1910, Alexander took the application of W. J. Dunken for a seven-year term policy, convertible, at the option of the insured, into a 20-pay commercial policy. Appellant issued this policy, No. 98322, January 28, 1911. Thirty days' grace was allowed for the payment of premium. In January, 1916, Dunken decided to exercise his option to convert this policy into a 20-pay commercial policy, and so informed Mr. Alexander. For the purpose of keeping the term policy alive until the conversion could be effected, Dunken executed a note, payable March 29, 1916, to the company, for the amount of the annual premium. The first policy, together with the extension note, was sent by Alexander, together with the application for conversion, to the home office. The annual premium on the first policy was $105.40; on the second policy, which will hereinafter be referred to as the new policy, the premium was $277.70. Dunken desired the new policy to be dated back to the date of the first policy, which was done. Under this arrangement, the amount due by Dunken on the new policy was $277.70, the annual premium, plus the difference between $105.40 for five years with interest thereon, amounting, in the aggregate, to $1,299.97. The new policy had a loan value of $987. This left a balance due on the first payment of $312.97.

On February 28, 1916, appellant issued the new policy, No. 152775, and sent same to Alexander, to be by him delivered to Dunken. Vice President English, in sending this policy to Mr. Alexander, wrote him as follows: "Inclosed find this policy, in exchange for 98322, surrendered." He also gave an itemized statement, showing that the cash due after deducting the loan value was $312.97. At the time of issuing the new policy, the appellant marked the first policy surrendered, so it and the note given for its extention were no longer of any force.

On March 4, 1916, Alexander mailed the new policy to Dunken, at Waco, Tex., where Dunken then lived. It was received by Dunken on March 6th, and was retained by him to the time of his death, about June 1, 1916. Accompanying this policy was a letter from Alexander as follows:

                            "Nashville, Tenn., March 4, 1916
                

"Mr. W. J. Dunken, 115 S. 5th Street, Waco, Texas—Dear Mr. Dunken: I take pleasure in handing you herewith your $10,000.00 commercial 20-pay policy converted from seven-year term.

"I also inclose a loan note which must be signed by you, with two witnesses to your signature, whose addresses should be given. Also please sign the form 378, which authorizes the company to deduct the 1916 premium from the proceeds of the loan.

"The amount due now to complete the transaction is $312.97, which is determined as follows:

                Conversion cost ..........................  $1,020 88
                1916 premium and interest.................     279 09
                                                            _________
                                                            $1,299 97
                Deduct net loan...........................     987 00
                                                            _________
                                                            $  312 97
                

"Please do not fail to send me your policy when returning the above.

"Thanking you, I remain,

"Sincerely yours, H. B. Alexander, Manager."

Dunken never remitted the $312.97, nor signed the loan form. There was no further correspondence between Dunken and Alexander, nor between Dunken and appellant. The case was tried by a jury, to whom was submitted, among others, the following special issues:

"Special issue No. 1: Did the agent of the defendant insurance company deliver the new policy, No. 152775, as a completed contract, with the intention that the same should become an effective and binding obligation from the time of receipt of same by the assured, W. J. Dunken? Answer Yes or No. Answer: Yes.

"Special issue No. 2: If you have answered No to the first issue, you need not answer the second issue, but if you have answered Yes to the first issue, then answer this, the second issue: Was the delivery of said policy as a completed contract acquiesced in by any executive officer of the defendant company? Answer Yes or No. Answer: Yes."

The evidence was sufficient to sustain these findings. Reference to the evidence will be made in this opinion, wherein we state our reasons for sustaining the findings of the jury.

This is the third appeal. An examination of our opinions on the former appeals, 204 S. W. 241, and 221 S. W. 691, will aid in understanding this case.

Opinion.

It is the contention of appellant that the policy herein sued on never became a contract for the reason that the first premium was never paid. The policy recites:

"This policy shall not take effect until the first premium herein shall have been actually paid during the good health of the insured, a receipt for which payment shall be the delivery of the policy."

The first premium was not paid. But the policy was delivered to the insured by Alexander, with the intention that it should become a completed contract. The evidence as to this not only sustains the finding of the jury as to issue No. 1, but is so complete that we do not deem it necessary to quote from the same.

Having found that the verdict of the jury in answer to special issue No. 1 is supported by the evidence, it becomes our duty to affirm the judgment herein, unless we should set aside the finding of the jury on the second special issue.

The evidence on the trial from which this appeal is taken is practically the same as that on the first and second trials hereof, with the addition of the evidence excluded on the first trial. In our opinion on the first appeal, Chief Justice Key, speaking for the court, said:

"We cannot say that there was no testimony * * * to show either of the waivers referred to. * * * On the contrary, we hold that the case should go back for another trial, at which, after admitting the excluded testimony heretofore referred to, as well as all other admissible evidence, the issues of waiver should be clearly submitted to the jury, and judgment should be based upon the jury's findings upon those issues." 204 S. W. 243.

Upon the second appeal, Mr. Justice Brady, speaking for the court, said:

"The question of waiver [was] a proper one for the determination of the jury." 221 S. W. 693.

A careful examination of the record herein, in connection with the brief and oral argument of the able counsel for appellant, has afforded us no grounds for changing our opinion on this issue. If the company, knowing that the policy had been delivered without the payment of the premium, acquiesced in such delivery, it thereby ratified the same. The ratification by a principal of the unauthorized act of an agent makes the same the act of the principal, and relates back to the time when the same was done. Evans v. McKay (Tex. Civ. App.) 212 S. W. 688; Brazoria County v. Padgitt (Tex. Civ. App.) 160 S. W. 1173; Brazoria County v. Rothe (Tex. Civ. App.) 168 S. W. 73-74.

If the principal does not intend to ratify the unauthorized act of one assuming to act as his agent, it is incumbent upon him, on receiving notice of such transaction, to promptly notify the...