Dairyland County Mut. Ins. Co. of Texas v. Roman

• Decision Date: 11 July 1973
• Docket Number: No. B--3701,B--3701
• Citation: 498 S.W.2d 154
• Parties: DAIRYLAND COUNTY MUTUAL INSURANCE COMPANY OF TEXAS, Petitioner, v. George Cruz ROMAN, Jr., Respondent.
• Court: Texas Supreme Court

Page 154

498 S.W.2d 154

DAIRYLAND COUNTY MUTUAL INSURANCE COMPANY OF TEXAS, Petitioner, v. George Cruz ROMAN, Jr., Respondent.

No. B--3701.

Supreme Court of Texas.

July 11, 1973.

Huson, Clark & Thornton, Robert B. Summers and Philip D. Clark, San Antonio, for petitioner.

Pat Maloney, San Antonio, for respondent.

WALKER, Justice.

This is a suit to recover under the uninsured motorist provisions of an automobile liability insurance policy. On the controlling questions presented for decision, we hold: (1) that a minor insured is not necessarily excused from complying with the notice requirements of the policy throughout the time he is under the disability of minority; (2) that where the plaintiff avers generally that all conditions precedent have been performed and no attempt is made to raise an issue of notice except by a sham pleading, the defendant is not entitled to a reversal on the ground that the plaintiff failed to establish that a written notice condition was performed; and (3) that a release given without consideration does not constitute a 'settlement' within the meaning of Exclusion (b) in Part IV of the policy.

The suit was brought by George Cruz Roman, Jr., against his insurer, Dairyland County Mutual Insurance Company of Texas, to recover damages for personal injuries sustained by him in an accident that occurred shortly after midnight on July 4, 1970, a few miles north of San Antonio on Interstate Highway 35. Plaintiff, who was accompanied by Mary Lou Valdez, was driving in a northerly direction on the highway when the muffler on his 1956 Chevrolet automobile became dislodged and began dragging on the pavement. He stopped his vehicle on the left side of the roadway and crawled under the car to remove the muffler. After he had completed his work and while he was emerging from under the car, it was struck in the rear by a vehicle driven by Ethan Odoms, an uninsured motorist. Immediately following this collision, an automobile driven by Charlene Hayes in a northerly direction in the right-hand lane of the highway was struck either by Odoms' car or by a piece of debris from the collision. Neither Miss Valdez nor Mrs. Hayes was injured, but plaintiff sustained personal injuries consisting primarily of a large laceration of the face and forehead.

At the time of the accident plaintiff was 19 years of age ¹ and was the named insured in an automobile liability insurance policy issued by defendant. He is the only person named as an insured, and his automobile is the only vehicle described in the policy. The policy contained the standard uninsured motorist coverage and the usual general condition requiring written notice of an accident, occurrence or loss to be given by the insured to the company as soon as practicable. Five days after the accident, plaintiff's mother talked with the insurance agent in Uvalde through whom the policy had been acquired and informed him of the details of the accident and that Odoms was uninsured. Neither defendant nor any of its agents received written notice of the accident, however, until August 5, 1970, when defendant was served with the citation and the accompanying petition in this suit.

The case was tried before a jury, which: (1) found that the accident was proximately caused by the negligence of Odoms and that plaintiff's mother gave 'notice of the accident' to defendant or its agents as soon as practicable; (2) refused to find that plaintiff was negligent; and (3) assessed plaintiff's damages at $20,100.00. The trial court rendered judgment in plaintiff's favor for $10,000.00, the policy limit, and the Court of Civil Appeals affirmed. 486 S.W.2d 847.

In its motion for instructed verdict, defendant insisted that there was no evidence to support a finding that written notice containing the information required by the policy was given as soon as practicable after the accident. When this motion was overruled, it objected to the charge on the ground that the notice issue did not require the jury to determine whether written notice containing the requisite information was given. It also requested the submission of an issue inquiring whether written notice containing such information was given as soon as practicable after the accident.

Initially the Court of Civil Appeals held that defendant's objection to the charge was well taken and that the judgment in plaintiff's favor should be reversed since there was no finding to establish that the written notice was either given by plaintiff or waived by defendant. The judgment of the trial court was accordingly reversed, but the cause was remanded in the interest of justice. On rehearing the court concluded, on the authority of our decision in McCrary v. City of Odessa, Tex.Sup., 482 S.W.2d 151, that plaintiff was excused from complying with the notice requirements of the policy. Its original judgment was then set aside, and the judgment of the trial court was affirmed.

The provision of the present policy requiring that notice of the accident be given the insurer as soon as practicable is a condition precedent to liability. In the absence of waiver or other special circumstances, failure to perform the condition constitutes an absolute defense to liability on the policy. Klein v. Century Lloyds, 154 Tex. 160, 275 S.W.2d 95; New Amsterdam Cas. Co. v. Hamblen, 144 Tex. 306, 190 S.W.2d 56. This is so even though the insurer had actual notice of the accident and was not prejudiced by the lack of formal written notice from the insured. Members Mut. Ins. Co. v. Cutaia, Tex.Sup., 476 S.W.2d 278. ² Under the holding of the Court of Civil Appeals here, however, the insurance company may be held strictly liable to a minor insured where it does not learn of the accident until years later and has no opportunity to make a proper investigation.

Our holding in McCrary has a similar effect, but the relationship of the parties there was quite different. The suit was by McCrary, a minor, against the City of Odessa to recover for personal injuries sustained by him when his automobile collided with a vehicle owned by the city and driven by one of its employees. The city charter contained a provision requiring, as a condition precedent to the institution of suit for personal injuries or property damage, that the claimant given written notice to the mayor and city council within sixty days from the date of injury. Although notice was not given until 51 weeks after the accident, we reversed a summary judgment for the city and held that McCrary was excused, absolutely and without qualification, from complying with the charter notice provision during the time he was under the disability of minority.

In our opinion this holding cannot properly be extended to reasonable provisions of a contract between private persons. The notice requirement there was thrust upon the minor by legislative enactment. It was limited to a specific number of days and could only work to the detriment of the injured claimant by abrogating his right of recourse to the courts. Here the notice condition is one provision of the contract that sets out the insurer's obligations to its insured, a contract voluntarily acquired by or for the minor plaintiff. It does not specify a definite period, and the time within which notice must be given is to be determined in the light of all the circumstances. The provision can be of benefit to the policyholder as well as to his detriment, because the investigation that is ordinarily made by an insurance company after receipt of timely notice may be of assistance to the insured in defending claims above the policy limits. Prompt notice of an accident is essential from the standpoint of the company, moreover, and it cannot be said that the provision is against public policy even where the insured is a minor.

While the contract of a minor is not void, it is voidable at the election of the minor. Prudential Bldg. & Loan Ass'n v. Shaw, 119 Tex. 228, 26 S.W.2d 168, 27 S.W.2d 157; Bullock v. Sprowls, 93 Tex. 188, 54 S.W. 661; Brown v. Farmers' & Merchants' Nat. Bank, 88 Tex. 265, 31 S.W. 285; Pioneer Cas. Co. v. Bush, Tex.Civ.App., 457 S.W.2d 165 (wr. ref. n.r.e.). This means that the minor may set aside the entire contract at his option, but he is not entitled to enforce portions that are favorable to him and at the same time disaffirm other provisions that he finds burdensome. He is not permitted to retain the benefits of a contract while repudiating its obligations. Carrizales v. W.O.W. Life Ins. Soc., 140 Tex. 259, 167 S.W.2d 509; 42 Am.Jur.2d, Infants, § 93. We hold that a minor insured is not necessarily excused from complying with the notice condition of an an automobile liability policy during the time he is under the disability of minority. The age, experience, capacity and knowledge of the insured are simply circumstances to be considered in determining whether the required notice was given as soon as practicable. See Brown v. State Farm Mut. Auto. Ins. Co., Tex.Civ.App., 449 S.W.2d 93 (no writ); Central...