American Nat. Ins. Co. v. Fox

• Decision Date: 08 December 1944
• Docket Number: No. 14656.,14656.
• Citation: 184 S.W.2d 937
• Parties: AMERICAN NAT. INS. CO. v. FOX.
• Court: Texas Court of Appeals

184 S.W.2d 937

AMERICAN NAT. INS. CO. v. FOX.

No. 14656.

Court of Civil Appeals of Texas. Fort Worth.

December 8, 1944.

Rehearing Denied January 26, 1945.

COPYRIGHT MATERIAL OMITTED

Appeal from District Court, Tarrant County; Hon. Bruce Young, Judge.

Suit by Hazel Lucille Fox against the American National Insurance Company to recover on a life policy. From a judgment for plaintiff, defendant appeals.

Affirmed.

Wren & Jeffrey, of Fort Worth, for appellant.

Samuels, Brown, Herman & Scott, of Fort Worth, for appellee.

McDONALD, Chief Justice.

This is a suit on a policy of life insurance. Plaintiff, the beneficiary named in the policy and the wife of the insured, recovered judgment in the court below, and the insurer has appealed.

In answer to five special issues, the jury found (1) that the premium in question here was paid by plaintiff to a named agent of the appellant; (2) that the insured suffered a heat stroke on a specified date; (3) that the insured's death resulted, solely, directly, and independently of all other causes, from such heat stroke; (4) that the exterior of the insured's body showed visible marks or evidences caused by the heat stroke; and (5) that $1000 would be a reasonable attorney's fee.

The suit is defended principally on the theory that the policy had lapsed prior to the insured's death by reason of non-payment of the quarterly premium which was due on April 14, 1943. The plaintiff testified that she paid the premium in question to Maury Hughes, an agent of the appellant company, at her home in Fort Worth. Hughes' testimony was to the effect that he had no independent recollection of the matter, and that all he had to go by were the records of the company. All of the evidence was one way to the effect that appellant's records contained nothing to show that the premium in question had been paid, and that appellant had recorded in its books that the policy had lapsed for nonpayment of the April, 1943, premium.

Appellant complains of the jury finding that the premium was paid, both on the ground that there was no evidence to support the finding and on the ground that the finding was against the great preponderance of the evidence, but it appears to us that the testimony of the plaintiff that she paid the amount of the premium to the agent Hughes was alone enough to support the finding.

The real ground of complaint appears to be that even if the amount of the premium was paid to the agent Hughes, such payment was insufficient to satisfy the requirements of the policy, and was not binding on the insurer. The terms of the policy relating to payment of premiums are like those set out in the opinion in American National Ins. Co. v. Tross, 138 Tex. 116, 157 S.W.2d 620, 621. The provision that is especially relied on here reads as follows:

"All premiums are due and payable in advance at the home office of the company, but may be paid to an authorized agent of the company in exchange for a receipt duly signed by the president or a secretary of the company and countersigned by the agent named therein."

From the undisputed evidence it appears that appellant maintained an office in Fort Worth, and that the agent Hughes was at the time in question an assistant superintendent in the Fort Worth office. For the sake of this case the policies of insurance issued by appellant may be divided into two classes, those designated as industrial policies, and those designated as ordinary policies. On the industrial policies the premiums were payable weekly, and were customarily collected by agents, of whom there were some sixty or seventy employed in the Fort Worth office, who called at the homes of the policy holders each week for the purpose of collecting premiums. The policy involved in this suit was of the class designated as ordinary policies, being those on which the premiums were payable on an annual, semi-annual, quarterly, or monthly basis. Plaintiff, and other members of her family living at the same home address in Fort Worth, carried some of the industrial policies, and plaintiff's husband carried the so-called ordinary policy which is here involved, in which, as has been said, plaintiff was the named beneficiary.

While much appears in the record concerning the payment of the quarterly premium which fell due on January 14, 1943, we believe that the testimony concerning the payment of that premium is not controlling upon any point involved in the appeal, so we shall not further discuss it.

One of the agents who collected premiums on industrial policies was named Dumas. On March 29, 1943, it was known that Dumas was leaving the employ of appellant, and the agent Hughes, in the pursuance of his admitted duties, was accompanying Dumas on a trip around the territory assigned to Dumas. Pursuant to his duties and his instructions, Hughes was doing the actual collecting on that day. No issue was submitted to the jury touching upon Hughes' authority to collect the premium in question, so, appellant having made due complaint of such failure to submit issues to the jury, we must determine whether the evidence is sufficient as a matter of law to show that Hughes had authority to collect the premium which the jury found was paid to him, and whether such payment was binding on the appellant. Our conclusion, for reasons which we shall give, is that the evidence does show a valid payment of the premium, as a matter of law.

The policy provides, as above shown, that the premium shall be paid either at the home office of the company, or to an authorized agent in exchange for a receipt signed by certain named officers of the company. No receipt of any kind was given to plaintiff at the time the premium was paid to Hughes. Appellant argues, therefore, that a payment to Hughes, for which no receipt was given, could not satisfy the requirements of the policy.

What we consider to be a sound view of this type of policy provision is found in the opinion in Kansas City Life Ins. Co. v. Elmore, Tex.Civ.App., 226 S.W. 709, 713:

"At this time we will give our views on the terms of the policy. A party, after he has accepted a policy giving powers to an agent to collect renewal premiums only upon a receipt furnished and signed by the general officers and countersigned by the agent, written in the face of the policy, has notice that the agent's power in collecting is limited. Ordinarily he could not rely on the assumption of the agent to act without being in possession of the proper receipt. If the insured has made payments to an agent without such receipt, he will be required to show a waiver by the insurer or estoppel upon it to deny such powers in the agent. If the insured makes payment to an agent with such limited power, in the absence of an agreement, waiver, or estoppel, he in effect makes the agent his own, and the payment must reach the insurer in the time and in the form which will satisfy the terms of the policy as to payment. Of course, the stipulation for a certain kind of receipt would not necessarily make any kind of receipt or proof of payment inadmissible. It is a provision that could be waived if the evidence establishes the agent was in fact authorized to collect the premium."

The same view appears to have been taken by the court in American National Ins. Co. v. Collins, Tex.Civ.App., 149 S.W. 554. In American National Ins. Co. v. Tross, 138 Tex. 116, 157 S.W.2d 620, 621, it is said:

"Undoubtedly the insurance company could send out an agent with authority to collect a monthly or annual premium without having in his possession an official receipt therefor, and if an agent with such authority should collect the premium under such circumstances it would be binding on the company."

Decisions from other jurisdictions may be found in the annotation in 85 A.L.R. 749.

We conclude from these authorities that the payment to Hughes was binding on the company if he had actual authority to collect the premium without having in his possession and without delivering to plaintiff the kind of receipt described in the policy.

While appellant argues strenuously that Hughes and the other agents working in the Fort Worth office were only soliciting agents, it is clear that they regularly collected premiums on the industrial policies. It is also clear from the testimony of appellant's own employees, including the superintendent of the Fort Worth office, that these agents were authorized and instructed to accept payment of premiums on ordinary policies from holders of industrial policies who might also hold ordinary policies. The evidence in this respect is undisputed. The so-called official receipts, of the kind described in the policy, were customarily sent to the Fort Worth office. The first premium notice would be sent out from the home office, but if the premium was not paid by its due date the employees of the Fort Worth office would give the holder of an ordinary policy a second notice, usually by telephone. The so-called official receipt was not given to the agent to deliver, but he was provided with a form of temporary receipt, which he was instructed to give to the policy holder, and when payment had been turned in to the Fort Worth office, it in turn would mail the official receipt to the policy holder. Books were kept in the Fort Worth office for the purpose of recording payment of premiums on ordinary as well as industrial policies. As we see it, there can be no doubt about Hughes having the authority to collect the premium without delivering an official receipt therefor. The superintendent testified that the agents were instructed to give the temporary receipts to the policy holders, and that he had never known of one failing to do so. He further testified that the agent making the collection had no authority to give the policy holder the official receipt, the latter being held in the office until the premium was paid. When the agent brought the money collected on an ordinary policy into the...