American-Amicable Life Ins. Co. v. Lawson

Decision Date04 October 1967
Docket NumberAMERICAN-AMICABLE,No. B--52,B--52
Citation419 S.W.2d 823
PartiesLIFE INSURANCE COMPANY, Petitioner, v. Oscar W. LAWSON, Respondent.
CourtTexas Supreme Court

Jones, Boyd, Westbrook & Lovelace, O. F. Jones, Jr., Waco, for petitioner.

Cox, Smith & Smith, Joe Smyer and J. Burleson Smith, San Antonio, for respondent.

GRIFFIN, Justice.

This is a suit by Oscar W. Lawson, respondent, against American-Amicable Life Insurance Company, petitioner, for recovery of double indemnity benefits alleged to be due under a 'binding' receipt for insurance. Due to the prior death of the insured, no insurance policy was issued, and the Respondent Lawson must recover, if at all, upon the written receipt and application for insurance.

When the case came on for trial both parties filed motions for summary judgment, and the trial court, after a hearing, denied the motion of the insurance company and granted summary judgment to Lawson. That judgment has been affirmed by the Court of Civil Appeals. 409 S.W.2d 462.

We granted a writ of error on the insurance company's point that it had fully discharged its liability to Plaintiff Lawson under the terms of the insurance contract. We reverse the judgments of both courts below and render judgment that Lawson recover nothing.

The facts are undisputed.

On July 9, 1964, deceased Richard James Lawson, through a duly authorized agent of the insurance company, signed an application for the issuance of a life insurance policy on his life in the principal amount of $25,000.00 and requested double indemnity in a like amount, with Oscar W. Lawson as beneficiary. On the signing of the application Richard Lawson paid to the agent the sum of $26.50, the amount of monthly premium due on the plan of life insurance selected containing the desired double indemnity feature. Richard Lawson received from the agent the premium receipt hereinafter discussed. The application was forwarded to the home office of the insurance company for processing, and on September 8, 1964, a duly authorized officer of the company approved the application for the insurance on the plan applied for and so stamped the approval on the application. On September 6, 1964, Richard Lawson died as the result of drowning. The first knowledge the company had of his death was on receipt of notice of death of Richard Lawson September 9, 1964. No policy of insurance was ever written. The beneficiary, Oscar W. Lawson, made claim for the amount of $25,000.00 life insurance benefits and $25,000.00 double indemnity benefits. After investigation and conferences with Oscar W. Lawson and his attorneys, the insurance company admitted liability for the $25,000.00 life benefits and paid the amount to Oscar W. Lawson. The parties agreed that such payment was without prejudice to the claims or defenses either party might have had for the payment of double indemnity. The insurance company refused to pay the double indemnity liability on the ground that it was not liable for same under the insurance contract set out in the receipt. Oscar W. Lawson accepted the $25,000.00 paid and filed this suit for the additional $25,000.00 he claimed was due him as double indemnity.

Neither party has cited a case in point on our facts, and each claims it is a case of first impression in this State on the law points involved. Neither we nor the Court of Civil Appeals has been able to find a case in point.

The application for insurance filed by Richard Lawson contained the following provision, among others: 'I declare that I have paid the soliciting agent under Receipt No. 66938 cash $26.50 representing the first premium as herein determined, and that I hold his receipt for the same on the receipt form detached from this application. I agree to the terms of said receipt as well as the agreement set forth on the reverse side thereof.' (Emphasis added.) The receipt which was detached from the application read as follows:

'No. 66938

RECEIPT FOR FIRST PREMIUM AMICABLE LIFE INSURANCE COMPANY WACO, TEXAS

Received from Richard James Lawson at Killeen, Texas, cash $26.50, check $ , being the full initial premium (not less than one monthly premium) in accordance with application for insurance coverage of even date (this receipt and the application bearing the same identifying number), subject to the agreement of the application to all conditions precedent stipulated at any point in the agreement set forth on the reverse side hereof as to the effective date of the insurance coverage. Dated this 29th day of July, 1964.

(Signed) Bob Bernard, Agent.

'In connection with the receipt on the reverse side hereof it is agreed by the applicant that: (1) the policy for which application is made shall be effective from the date of the medical examination, or, if no such examination is required, from the date of this application, subject to payment in full of the initial premium (not less than one monthly premium), subject to the proposed insured person being alive and in good health on such pertinent date, subject to said application being accepted as evidenced by affirmative and active approval by the Company at its Home Office on the basis of the Company's standard published rates for the exact form of policy and amount of coverage, and subject to the agent delivering the receipt set forth on the reverse side hereof; (2) no agent can make contracts or waive any rights without written consent from the proper executive officer at the Home Office of the Company; (3) no insurance coverage shall be effective if any check given for such premium is not paid on presentation; (4) if written notice of approval is not given within 60 days after the date of said application, disapproval or rejection shall conclusively and automatically occur and exist as of the date of said application; (5) no temporary or interim insurance coverage shall exist by implication, but shall exist only in...

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