Burns v. American Nat. Ins. Co.

• Decision Date: 17 February 1926
• Docket Number: (No. 598-4429.)
• Citation: 280 S.W. 762
• Parties: BURNS v. AMERICAN NAT. INS. CO.
• Court: Texas Supreme Court

280 S.W. 762

BURNS v. AMERICAN NAT. INS. CO.

(No. 598-4429.)

Commission of Appeals of Texas, Section B.

February 17, 1926.

Error to Court of Civil Appeals of First Supreme Judicial District.

Action by J. J. Burns against the American National Insurance Company on an accident insurance policy. Judgment reforming and affirming a judgment in favor of plaintiff (273 S. W. 339), and plaintiff brings error. Affirmed.

W. P. Hamblen and Warren & Conn, all of Houston, for plaintiff in error.

Woods, King & John, of Houston, for defendant in error.

SHORT, J.

The Supreme Court granted the writ of error in this case on the ground of the apparent conflict of opinion as to the proper construction of article 5546 of the Revised Civil Statutes of 1925, the same being article 5714, Vernon's Revised Civil Statutes, so much of which as is involved in the matter under discussion is as follows:

"No stipulation in a contract requiring notice to be given of a claim for damages as a condition precedent to the right to sue thereon shall ever be valid unless such stipulation is reasonable. Any such stipulation fixing the time within which such notice shall be given at a less period than ninety days shall be void, and when any such notice is required, the same may be given to the nearest or to any other convenient local agent of the company requiring the same."

The opinion of the Court of Civil Appeals in this case is reported in 273 S. W. 339. This opinion is in direct conflict with the case of Insurance Co. v. Herndon (Tex. Civ. App.) 184 S. W. 283, the facts in each case being substantially the same. The decision of the Court of Civil Appeals in this case is also alleged to be contrary to the decision of the Supreme Court in the case of Citizens' Guaranty State Bank v. National Surety Co., 258 S. W. 468.

The plaintiff in error, Burns, sued the defendant in error, American National Insurance Company, for $3,600, basing his suit upon an accident insurance policy issued to him by the defendant in error. In his petition, Burns alleged that by the terms of the policy he was to receive $100 a month for total disability suffered by him, not exceeding 36 months, sustained through external, violent, and accidental means, and that about February 1, 1923, he sustained physical injuries which totally and permanently disabled him for performing work of any kind. The trial court rendered a judgment in favor of Burns and against the insurance company, after a trial before a jury, upon facts found by the jury to the effect that Burns did receive an injury through accidental means on the 1st of February, 1923, resulting in total disability, and that his disability resulted solely and alone from such accident, for the sum of $1,370, with interest and costs, this being the full amount claimed up to the date of the judgment, the remainder of the claim having been dismissed.

The defendant in error, after demurring to the petition and denying generally its allegations, answered that it was not liable to the plaintiff in error, because the policy, among other provisions, contained the following:

"If the insured is disabled by injury or illness for more than thirty days, he or his representative shall, as a condition precedent to recovery hereunder, furnish the company every thirty days with a report in writing from his attending physician or surgeon, fully stating the condition of the insured and the probable duration of his disability."

And further alleged that no such report was furnished except one which was made on the 15th of February, 1923, and after tendering in court $150 and the unearned premiums paid on the policy amounting to $44.18, aggregating $194.18, claimed that this was in full discharge of its liability. The testimony supported the allegations of fact in this answer with reference to this particular matter, even as the testimony did also support the remaining material allegations of the plaintiff in error made in his petition, thus presenting a question of law as to whether the article of the statute above mentioned was applicable. The trial court held that it was, as above stated, but the Court of Civil Appeals held that it was not, and reversed the judgment of the trial court except as to the sum of $194.18.

The plaintiff in error submits only one assignment of error, and thereunder two propositions, as follows:

"Plaintiff in Error's First Assignment of Error.

"The Court of Civil Appeals erred in sustaining the defendant in error's assignments of error and propositions 1 and 2 thereunder, which are quoted as follows:

"Defendant's first assignment of error is as follows: `Because the court erred in refusing to give defendant's request for peremptory instruction.'

"Defendant's first proposition under its first assignment of error: `A contract providing that, as a condition precedent for the demand of a sum, or sums of money, the contract provides one party thereto shall pay the other, the party demanding payment shall furnish the party from whom payment is asserted to be due a certain certificate, statement or report, is valid; and proof of compliance with such condition is essential to recovery.'

"Defendant's second proposition under its first assignment of error: `Sending of forms for final proof of claim, when a certificate, or report of physician has been furnished as provided by another clause in the policy, the insurance company, admitting and intending to pay the sum due and proved by the physician's report, upon making final proof of claim, is not a waiver of the failure to furnish the physician's report as a basis for claim of other and additional sums under the same policy.'

"Plaintiff in error's first proposition: The stipulation in the contract sued on requiring a notice or report every 30 days as a condition precedent to recovery of the amount due under the policy is contrary to the provision of Statute 5714, and void, and compliance therewith is unnecessary. Where, under the terms of an insurance policy, the insurance company agreed to pay to the insured the sum of one hundred dollars per month during the period of disability, and has knowledge that such injury will exceed a period of 30 days' time, and having accepted premiums before and after injury, the notice so given indicating at least a 60-day period of disability, and makes no attempt to pay the sums of money due under said notice actually given as provided in the contract of insurance until some eight months thereafter, and only then when the matter was in the hands of an attorney for collection, is in no position to set up as a defense the failure of the insured to give notice every 30 days, and by such actions the company waived any rights it may have had under said provision requiring notice every 30 days."

"Plaintiff in error's second proposition under his first assignment of error: Where there is no evidence that the insurance company had been injured, harmed, or placed in a disadvantageous position and had failed to plead such injury or harm because of the failure of the insured to give notice as required in the policy of insurance, they are estopped to set up as a defense such failure to so notify."

The correct determination of the question presented by the assignment depends upon the true construction of the phrase "claim for damages" in the statute quoted. If the plaintiff in error's suit is based upon a "claim for damages" within the meaning of the statute quoted, then the assignment must be sustained, because there is no question made in the record that the notices were given at any time except as above stated, nor is there any question made that the policy was issued under such circumstances as would enable it to be attacked on the ground of fraud, accident, or mistake in the making of the contract between the parties, of which the policy is the evidence. The Supreme Court, in the case of G., C. & S. F. Ry. Co. v. Fuller, 63 Tex. 470, and also in the case of G., H. & W. R. Railway Co. v. Hall, 14 S. W. 259, 78 Tex. 172, 9 L. R. A. 298, 22 Am. St. Rep. 42, says that by "damage" as used in article 1, § 17, of the Constitution, is meant "every loss or diminution of what is a man's own occasion by the fault of another"; and the Supreme Court of the United States, in Scott v. Donald, 17 S. Ct. 265, 165 U. S. 86, 41 L. Ed. 635, uses this language:

"Damages have been defined to be the compensation which the law will award for an injury done."

Before one has any "claim for damages" whereby he can give to another notice thereof, there must be in existence provable facts of a cause of action in his favor against the other; and it is a familiar principle of the law that one asserting a cause of action has the burden of proving it by a preponderance of the evidence, at least to the extent of making out a prima facie case in his favor. Damages are a sum awarded to one because another has wrongfully invaded his rights contrary to agreement or contrary to law; and where one claims damages under the terms of a written contract in the execution of which there is no allegation that it was executed through fraud, accident, or mistake, he must stand upon the contract as written, and allege and prove that without fault or negligence on his part the other party to the contract has breached it, showing that on account of such breach the complaining party has been damaged in a sum which can be ascertained.

The policy which is the basis of the cause of action alleged in the petition of the plaintiff in error is not ambiguous in its terms, though rather complicated in some of its language. It provides that in consideration of certain premiums to be paid quarterly by the plaintiff in error, the fact that the defendant in error insures the former, "subject to all the conditions herein contained," against disability resulting directly and exclusively of all other causes from bodily injuries sustained through external, violent, and accidental means, at...