American Cas. & Life Co. v. Combs

• Decision Date: 06 March 1950
• Docket Number: No. 6035,6035
• Citation: 228 S.W.2d 897
• Parties: AMERICAN CASUALTY & LIFE CO. v. COMBS.
• Court: Texas Court of Appeals

Page 897

228 S.W.2d 897

AMERICAN CASUALTY & LIFE CO. v. COMBS.

No. 6035.

Court of Civil Appeals of Texas, Amarillo.

March 6, 1950.

Rehearing Denied April 3, 1950.

Gibson, Ochsner & Little, Amarillo, for appellant.

Merchant, Fitzjarrald & Pope, Amarillo, for appellee.

PITTS, Chief Justice.

This action was instituted by appellee, William Thrope Combs, against appellant, American Casualty and Life Company, a corporation, seeking to recover benefits alleged to be due him under the terms of a health and accident policy issued to him by appellant and as a result of injuries he sustained on June 10, 1947. The case was tried before a jury, which was discharged by the trial court without objections by either party after the evidence was heard and judgment was rendered, as a matter of law, for appellee for the sum of $500.00, from which judgment an appeal has been perfected to this court.

It is agreed by the parties that the sole question to be determined here is whether or not the policy of insurance sued on was in force at the time appellee was injured. Appellant contends that the insurance contract and the State law authorized it to collect a membership fee out of the initial payment made by appellee on the contract and that it, by reason of such authorities, divided the initial payment so made by applying a part of it on the payment of a quarterly premium and the remainder of it was applied as a membership fee. Appellee contends that appellant was not authorized to apply any part of the initial payment on a membership fee but was required by law to apply all of the initial payment on the premium. It is conceded that if appellant is correct in its contentions, the benefits of the policy had expired at the time of appellee's injury while the policy had not expired if appellee is correct in the position he takes.

Appellee pleaded the terms of the policy and his application for such by attaching to his pleadings a copy of each and making them a part thereof. He likewise introduced both of them in evidence. There is little, if any, controversy about the facts presented. The record reveals that appellee contracted for the policy through appellant's agent, David W. Ridge, in consideration of an initial payment of $20.00 and that the policy was thereafter delivered to appellee by Ridge. The effective date of the policy was February 19, 1947, and its terms therein provided that the same was issued in consideration of the statements made by appellee as the applicant and in consideration further of the initial payment made in advance. The policy further provided for the payment of premiums quarterly, semi-annually or annually and it also provided for a grace period of fifteen days. The terms of the policy further provided, in effect, that it would become effective at noon on February 19, 1947, continue in force for a period of three months as a result of the payment of the initial premium, and that its benefits would expire at the end of the first grace period following the period covered by the payment of the initial premium if further premiums were not paid. The terms of the policy provided further that no agent had authority to make any changes in its terms or waive any provisions therein contained but that the terms of the policy, together with the application therefor and the company's by-laws, with any amendments thereto, constituted the entire contract for insurance between the parties. Such were pleaded and proved by appellee and it has been many times held that after a policy has been issued and delivered to the insured, the parties are bound by its terms so long as it is kept in force. It has likewise been held that: 'In the absence of fraud, accident, or mistake, it will be conclusively presumed that the parties to a contract were familiar with and understood the subject-matter about which they have contracted and that the terms used by them were intended to be given the ordinary and popular accepted meaning.' Southern Travelers' Ass'n v. Wright, Tex.Com.App., 34 S.W.2d 823, 826. The record does not reflect any claim of fraud, accident or mistake in this case.

Appellant introduced in evidence a certificate issued by the Texas State Board of Insurance Commissioners authorzing it to engage in business in Texas in accordance with the provisions of Articles 4859f and 5068-1, Vernon's Annotated Revised Civil Statutes, for the year covering the period the policy in question was issued and another such certificate was introduced for the first succeeding year thereafter. Section 10 of Article 4859f provides in part as follows: 'All policies issued by a corporation under this Act shall provide that said policy is subject to the by-laws of the corporation and all future amendments thereto.'

Section 11 of said Article provides in part: '* * * such agent shall not have power to waive, change or alter any of the terms or conditions of the application or policy.'

Section 2 of Article 5068-1 provides in part: "Membership fee' shall be the amount of the first assessment or assessments permitted by the Board to be placed in the...