Beaty v. Southland Life Ins. Co.

• Decision Date: 14 May 1930
• Docket Number: No. 7423.,7423.
• Citation: 28 S.W.2d 895
• Parties: BEATY v. SOUTHLAND LIFE INS. CO.
• Court: Texas Court of Appeals

28 S.W.2d 895

BEATY v. SOUTHLAND LIFE INS. CO.

No. 7423.

Court of Civil Appeals of Texas. Austin.

May 14, 1930.

Rehearing Denied May 28, 1930.

Appeal from District Court, Milam County; John Watson, Judge.

Action by Ella Beaty against the Southland Life Insurance Company. From a judgment on an instructed verdict for defendant, plaintiff appeals.

Affirmed.

M. G. Cox, of Cameron, for appellant.

Seay, Seay, Malone & Lipscomb, of Dallas, and Henderson, Kidd & Henderson, of Cameron, for appellee.

BLAIR, J.

Appellant sued appellee, alleging that on August 4, 1928, appellee, acting by and through its agent G. W. Baker, and within the real or apparent scope of his authority, entered into a binding oral contract to temporarily insure the life of Aubrey Beaty, appellant's husband, for $1,000 on the 20-year payment plan, the temporary insurance to cover the period from August 4, 1928, when Aubrey Beaty was examined by appellee's local medical examiner and found to be in good health and a medium risk, until a formal policy would be issued and delivered, naming appellant as beneficiary; and that Aubrey Beaty died on August 6, 1928, before the formal policy was issued, but during the period he was covered by the oral contract for temporary insurance. Appellee answered that Baker was merely a soliciting and collecting agent and had no authority to make for it the contract alleged by appellant. Appellant replied that appellee was estopped to deny the authority of its agent to make the contract for temporary insurance: (a) Because the recitations of the application with respect to the agent's authority were ambiguous and capable of being construed as authorizing the contract for temporary insurance; and (b) because appellee's president before the death of Aubrey Beaty, and on August 6, 1928, by letter accepted and ratified Beaty's application for insurance and obligated appellee to issue the policy.

At the conclusion of the evidence the court instructed a verdict for appellee and rendered judgment accordingly; hence this appeal.

On August 4, 1928, G. W. Baker, appellee's agent with authority only to solicit insurance and take applications therefor and to collect premiums and forward same to appellee's home office at Dallas for acceptance, took the application of Aubrey Beaty for a $1,000 policy of life insurance on the 20-year payment plan, naming appellant as beneficiary. Beaty could neither read nor write, so Baker filled in the answers in the application, read the application to Beaty, and at request of Beaty signed Beaty's name to it.

It was written in the application at a place indicated for that purpose that applicant wanted the insurance to be effective from August 4, 1928, and a copy of the application was delivered to Beaty as a receipt when he signed it. On the same day, August 4, 1928, appellee's local medical examiner at Cameron, Tex., examined Beaty and reported that he was not a "first class risk," but was a "medium risk," because both of his parents "had died of Bright's disease," and further that he was of "good moral habits, but financially very poor and a poor manager." The application and medical report, together with $5.75, the "net" premium due on the policy, were on the same day, August 4, 1928, mailed by Baker to appellee's home office at Dallas, Tex. Baker took Beaty's note for $17.25 for the remainder of the premium, which was Baker's commission for soliciting the insurance. At 8:30 p. m. Sunday, August 5, 1928, a man stabbed Aubrey Beaty with a knife from which he died at 8:10 p. m. Monday, August 6, 1928. On Monday, August 6, 1928, appellee received the application and on the same day acknowledged receipt of the application by a form letter mailed out of appellee's office. On August 6, 1928, Baker wrote appellee, informing it of the death of Beaty, and August 7, 1928, appellee's local medical examiner also wrote of Beaty's death, both stating that he had applied for insurance. On August 8, 1928, appellee wrote Baker that it had taken no action on Beaty's application, and had issued no policy and instructed him as follows:

"You are, therefore, hereby instructed to return to Mrs. Ida Ella Beaty the settlement secured by you, which is stated to be $5.75 in cash and note for $17.25, due September 1st, and take up and return to the company any receipt you may have given to the applicant. The company's check to the order of Mrs. Ida Ella Beaty is enclosed herewith."

A day or two later Baker tendered to, and Mrs. Beaty refused, the check and note referred to in the letter. Still later Baker, at the request of the company, tendered Mrs. Beaty $5.75 in cash and the note, which she also refused to accept.

Beaty's application for the insurance contained the following provisions:

"2. The policy or policies issued in consequence thereof shall constitute the entire contract of insurance, and the company shall not be bound in any way by any promise or statement made by or to any agent or other person, unless such promise, statement or information be reduced to writing and submitted to the company and made a part of the contract;

"3. That there shall be no liability hereunder until a policy shall be issued and manually delivered to me and accepted by me while in good health, and the first premium thereon actually paid during my lifetime; provided, however, that if said premium is paid in full to said company's agent at the time of making this application and if the company at its home office in Dallas, Texas, shall issue a policy on the plan applied for herein then the insurance, (subject to the provisions of the policy applied for) shall be effective from the date of my medical examination."

Appellant contends that the jury should have been permitted to determine whether Baker acted within the real or apparent scope of his authority in offering in behalf of appellee to temporarily insure the life of Aubrey Beaty from August 4, 1928, the date of his medical examination, until a formal policy of insurance was issued by appellee, because the provisions of the application above quoted with respect to the effective date of the insurance and the authority of the agent to make and submit written agreements not contained in the application were ambiguous and capable of being understood by Beaty to mean that if his application was accompanied by the medical examiner's report showing him to be in good health and a good risk and the full amount of the first annual premium due on the policy, the application would be approved and his insurance would be effective from the date of his medical examination We do not sustain the contention.

In the first place, there is no proof of appellant's allegation that Baker orally contracted with Beaty that appellee would issue the policy upon presentation of the application accompanied by the local medical examiner's report showing applicant to be in good health and a good risk and the $5.75 "net" premium due on the policy for the first year. Baker testified that he told Beaty that the insurance applied for would be effective from the date of his medical examination only in the event the policy was actually issued and manually delivered to him as stipulated in the application. Beaty's brother testified that he heard Baker tell deceased the insurance would be effective from the date of his medical examination. No witness testified, nor is there any fact or circumstance in the record which would indicate, that Baker, as agent for appellee, undertook to contract with Beaty that appellee would be compelled to accept the application when accompanied by the local medical examiner's report showing applicant to be in "good health" and a "medium risk" and the $5.75 "net" premium due for the first year, and to issue the policy. Missouri State Life Ins. Co. v. Boles (Tex. Civ. App.) 288 S. W. 271 (writ dismissed).

Nor did the issuance of the binding receipt (the copy of the application delivered to Beaty as a receipt by Baker as agent of appellee) providing that the insurance should be in force from the date of medical examination, provided the applicant was approved and accepted, preclude appellee from rejecting the application, with or without reason, and notwithstanding the medical examination showed applicant to be in good health and a medium risk, and such receipt is not a binding contract for temporary insurance. Brancato v. Nat'l Reserve Life Ins. Co. (C. C. A.) 35 F.(2d) 612.

In the second place, such alleged oral contract, if made, was specifically prohibited by the express terms of the application itself, which provided that "the company shall not be bound in any way by any promise or statement made by or to any agent or other person, unless such promise, statement or information be reduced to writing and submitted to the company and made a part of the contract." Such oral contract was also contrary to the...