Commonwealth Life & Accident Ins. Co. v. Nelligan, 12081.

• Decision Date: 31 March 1949
• Docket Number: No. 12081.,12081.
• Parties: COMMONWEALTH LIFE & ACCIDENT INS. CO. v. NELLIGAN.
• Court: Texas Court of Appeals

220 S.W.2d 209

COMMONWEALTH LIFE & ACCIDENT INS. CO. v. NELLIGAN.

No. 12081.

Court of Civil Appeals of Texas. Galveston.

March 31, 1949.

Rehearing Denied May 12, 1949.

Appeal from District Court, Harris County; Phil D. Woodruff, Judge.

Action on health and accident policy by George J. Nelligan against Commonwealth Life & Accident Insurance Company. From the judgment, the defendant appeals.

Reversed and rendered.

Vance & Wagner and A. Milton Vance, all of Houston, for appellant.

J. W. Mercer, of Houston, for appellee.

GRAVES, Justice.

This appeal is from a judgment of the 113th District Court of Harris County, sitting without a jury, awarding the appellee a $912.68 recovery against appellant, as being the net sum due from it to him under the terms of a health and accident insurance policy the company had issued to him as one of its agents, which the trial court found was to become effective on June 1, 1947, after the court had balanced the accounts between the parties, growing out of the business done between them during the existence of their relation as an insurance company and sales agent therefor respectively.

The appellee filed the suit, declaring upon the policy, not, however, attaching a copy thereof to his petition, claiming that indemnities under the terms of the policy had inured to his benefit because of an accidental injury sustained by himself on the 29th day of November, 1947, in the total amount of $900 indemnity, further seeking 12% penalty and reasonable attorney fees, etc. No further details as to such features need be given, since the appellant makes this concession concerning them: "The policy was issued June 1, 1947, by Appellant, Commonwealth Life and Accident Insurance Company, a Missouri corporation, to Appellee, George J. Nelligan, an experienced Insurance Agent, then in Appellant's employ at Houston, Texas, working out of its Houston office under the supervision of Herman Bender, Appellant's local manager. The policy was a Health and Accident policy, and on November 29, 1947, Appellee sustained disability due to accidental personal injuries, which entitled him to recover upon it the sum of $900.00, together with 12 per cent penalty, and attorneys fees, as adjudged by the Trial Court herein provided the policy was in force at the time of the injury sustained by Appellee."

But appellant insists that the undisputed evidence showed the policy was not in force at the time of appellee's injury; that it had lapsed for non-payment of the premiums due by him thereon for the months of both October 1, and November 1, 1947, because of which the policy became so defunct, pursuant to its express terms on October 6, 1947, which was the last day of grace upon the premium due October 1, 1947.

In challenging the court's judgment so adverse to it, appellant's main points of error may be thus condensed: "In the face of policy-provisions prohibiting waiver or receipt of premiums on policies in arrears more than five (5) days by Appellant's agents, the Trial Court erred, first, in admitting evidence, over Appellant's objection, designed to show a waiver of said provisions by the Cashier at Appellant's Houston office; particularly when the undisputed evidence showed that she had no authority to waive the policy provisions; second, in rendering judgment for Appellee, based upon a finding of a waiver of such policy-provisions providing for lapsation for non-payment of premiums by the act of Appellant's Cashier, there being no evidence to show the Cashier's authority to bind Appellant to the alleged waiver; third, in his Conclusion of Law No. 1, that the statement of Appellant's Cashier to Appellee that the premium was taken care of, and that Appellee could pay her later, amounted to a waiver of the policy-provisions with respect to time for payment of premiums; because, said statements, even if binding upon Appellant, did not amount to a waiver, since the policy, by its terms, was not in force at the time, and payment of premiums, when made by Appellee, would have operated only to put the policy in force from the date of actual receipt of such payment, and then only if satisfactory proof of insurability was furnished by Appellee."

The trial court filed findings of fact and conclusions of law in support of its judgment, which in brief summary as to the features deemed most material, were as follows:

"II. The premiums on said policy were provided to be $2.00 per month, and the date for payment of premiums was the 1st day of each consecutive calendar month, beginning June 1, 1947.

"III. The first premium payable on said policy was paid in cash by plaintiff. Thereafter, by arrangement between plaintiff and defendant, the premium receipt-book was placed with the Cashier of Defendant in its Houston, Texas, office, and it was agreed that the premiums, as they accrued, should be paid by book credit representing deductions from plaintiff's commissions in his capacity as an insurance agent in the employ of defendant. Premium maturing July 1, 1947, was paid by deduction from plaintiff's commissions accruing for the week beginning June 30, 1947. The premium maturing August 1, 1947, was paid by deduction from plaintiff's commissions accruing for the week beginning July 28, 1947. The premium maturing September 1, 1947, was paid by deduction from plaintiff's commissions accruing for the week beginning September 1, 1947.

"IV. At the effective date of the policy, June 1, 1947, plaintiff was an insurance agent in the employ of defendant, working out of its Houston, Texas, office. Plaintiff was in charge of a `debit' for defendant, his duties being to collect the weekly-premiums from policyholders of defendant upon policies issued by defendant to them, and to write such new business as he could. Plaintiff's compensation in such employment was paid weekly and represented commissions accruing to him upon the amount collected from his `debit', and all new business written by him. * * *

"VI. Plaintiff performed his last service working out of the Houston Office of Defendant, on September 4, 1947, and on the following day left Houston and Texas for a vacation trip to the northern part of the country, expecting to be gone on a two-weeks vacation. However, he did not return to the Houston office of defendant until November 5 or 6, 1947, and after visiting the office on this occasion, plaintiff went to Beaumont, Texas, where he rendered services for defendant. The employment at Beaumont was on a salary basis, and plaintiff's salary at Beaumont was paid in full.

"VII. At the time plaintiff left Houston on September 5, 1947, there was accumulated in his `Debit Bond' in the hands of the defendant, the sum of $196.00. On the occasion of plaintiff's visit to defendant's Houston office on November 5 or 6, the `Debit Bond' was paid to plaintiff by defendant's local Manager in the amount of $196.00.

"VIII. On the occasion of plaintiff's visit to defendant's Houston office on November 5 or 6, 1947, defendant's Cashier in that office requested plaintiff to pay the premiums due upon plaintiff's hospitalization insurance, called `Blue Cross' insurance (carried by plaintiff in a company other than defendant company), and for payment of premium upon the policy involved in this suit. Plaintiff paid the premium due upon the `Blue Cross' insurance in the amount of $8.00. Defendant's Cashier told plaintiff that she did not know the amount of premium payable upon the policy involved in this suit, but stated that she would let him know, and he, Mr. Nelligan, could pay her later, and that until then it would be `taken care of'; whereupon plaintiff left without making any payment of premium upon the policy involved in this suit. No premium on said policy was paid either in cash or by deduction or book credit subsequent to that occasion and before his injury on November 29, 1947.

"IX. At the end of the week beginning September 8, 1947, plaintiff was paid by defendant all commissions due him by the defendant to that date for services with the defendant. No commissions or other compensation were payable by defendant to plaintiff after said September 8, 1947, until, as above stated, he resumed...