Equitable Life Assur. Society v. Ellis

• Decision Date: 05 June 1912
• Citation: 147 S.W. 1152
• Parties: EQUITABLE LIFE ASSUR. SOCIETY OF THE UNITED STATES v. ELLIS.
• Court: Texas Supreme Court

147 S.W. 1152

EQUITABLE LIFE ASSUR. SOCIETY OF THE UNITED STATES v. ELLIS.

Supreme Court of Texas.

June 5, 1912.

Error to Court of Civil Appeals, Third Supreme Judicial District.

Action by Amanda M. Ellis against the Equitable Life Assurance Society of the United States. Judgment for plaintiff was affirmed by the Court of Civil Appeals (137 S. W. 184), and defendant brings error. Affirmed.

Ogden, Brooks & Napier, of San Antonio, for plaintiff in error. Alexander Graves, of Lexington, Jno. C. Sullivan, of San Antonio, and Jas. H. Robertson and Robertson & Robertson, all of Austin, for defendant in error.

PHILLIPS, J.

This was a suit in the trial court by Amanda M. Ellis against the Equitable Life Assurance Society of the United States to recover upon a policy of life insurance in the sum of $25,000 issued by the defendant upon the life of Caswell G. Ellis on April 16, 1904; the annual premium upon which matured on March 24th of each year. Ellis was shot on May 11, 1906, and died from his wound the following day. The annual premium which matured on March 24, 1906, had not been paid. The policy contained the following provision: "This policy shall lapse and together with all premiums paid thereon shall forfeit to the society on the nonpayment of any premium when due," which, in connection with Ellis' failure to pay the premium due March 24, 1906, was pleaded by the company as a bar to recovery. The plaintiff met this defense with a plea to the effect that by a course of negotiation had by the company with Ellis concerning this premium and its payment that continued down to and including May 9, 1906, which will be referred to hereafter, the forfeiture of the policy under the foregoing provision had been waived by the company. The issue of waiver was resolved in favor of the plaintiff in the trial court by the verdict of the jury, and the judgment of that court has been affirmed by the Court of Civil Appeals.

The principal question presented to us is whether there is any evidence in the record that supports the jury's finding upon this issue; the other being a similar question with respect to the authority of the agents of the company to bind it by their conduct, which is the dependence in the case of the plaintiff upon the main issue.

This policy payable to his mother, and another of like amount payable to his wife, were originally issued to Ellis by the company through its general agents at San Antonio, Tex., Marks & Plummer. During 1905 W. H. Bourke was the cashier of the company at San Antonio in the office of Marks & Plummer. During 1906 Jas. H. Wyman was such cashier at Austin in the office of R. H. Baker, the general manager of the company at that time for the larger part of the state of Texas. The contract between the company and Marks & Plummer provided that the company should have the right to appoint a cashier for their office and business, and it is to be inferred that Bourke served as cashier in the San Antonio office under such appointment or employment. Wyman served as cashier at Austin under direct employment by the company. As cashiers in these respective offices Bourke and Wyman attended to the collection of premiums. The cashier always handled loans on policies in the Austin office. In 1906 Gerald F. Brophy was the company's superintendent of its extension and loan department in its general offices in the city of New York. In the conduct of the business of the Austin office, applications for loans upon policies and for extensions in the payment of premiums were referred by that office to the superintendent of the extension and loan department who gave instructions with reference thereto to the cashier, which were acted upon by him.

In addition to the provision above noted, the policy contained the following provisions: "(1) Grace in the payment of premiums. Should default be made at any time hereafter in the payment of any premium due upon this policy as herein provided, the society will waive such default and accept the payment of said premium, provided the amount thereof, with interest thereon at five per cent. per annum from the date of default, be tendered to it within 30 days after such default." "V. Reinstatement. Should this policy lapse by reason of the nonpayment of any premium, it may be reinstated at any time upon the assured furnishing evidence of good health satisfactory to the society, and the payment of all arrears and any indebtedness to the society under this contract existing at the date of lapse, with interest thereon at five per cent. per annum." "XIV. Policy and application the entire contract. This policy and the application therefor, taken together, constitute the entire contract, which cannot be varied except in writing by one of the following executive officers of the society, at its home office in New York, viz., the president, one of the vice presidents, the secretary, the assistant secretary, the comptroller, the actuary, the assistant actuary, the treasurer, the auditor, the associate auditor, the recorder, the registrar or the assistant registrar."

While under the policy, as will be observed from one of the provisions above quoted, a grace period of 30 days after the default in the payment of the premium that matured March 24, 1906, could have been availed of by Ellis as a matter of right, he did not make the payment within such period, and the policy thereupon lapsed according to its terms. A further period of 30 days was provided in the policy, as will be also noted, not of grace, but within which by permission of the company the policy might be reinstated even after lapse through a failure to pay any premium, upon evidence of good health satisfactory to the company being furnished, and the payment of all arrears and any indebtedness with interest; but nothing was done by Ellis to invoke a reinstatement of the policy under this provision, and no reference to it appears to have been made in any of the negotiations between him and Wyman, the cashier of the Austin office, after the default in the payment of the premium due March 24, 1906, had occurred.

The question before us upon the issue of waiver must be determined solely by the conduct of the company, or its agents acting within the scope of their authority, in relation to the 1906 premium, but, as evincing the company's attitude toward this risk and, as we view it, a purpose to maintain this insurance in force even at some breach of its rules and some sacrifice of its general policy, its action, through its cashier Bourke, in respect to the 1905 premium may be looked to as helpful to a clear grasp of the issue and not without influence in its true solution. When that premium matured, the company first granted an extension to August 22, 1905, upon Ellis' payment of the cost of the term rate for that period. Ellis did not meet the balance of the premium due at this new maturity, however. But on a subsequent date, after he had notified Bourke that he would transfer his insurance to another company unless he was permitted to pay as he had proposed the amount required for another extension, he was granted such further extension or a reinstatement of both policies, contrary to the rules of the company but pursuant to its instructions, as a special concession, according to Bourke's statement in one of his letters, whereby both policies were extended in force to December 22, 1905. Neither did he make the payment required and due on or by this last-named date. He only remitted it on that date by mail from his home. It was not possible for the remittance to have been received at the San Antonio office, to which it was sent, until the next day at least, but it was nevertheless accepted and duly applied by the company without protest so far as is disclosed by the record.

We will here summarize what occurred with respect to the 1906 premium. A written notice that that premium would be due on March 24, 1906, was received by Ellis on February 16, 1906, containing the following clause: "Unless the premium then due shall be paid to said society or to the duly appointed agent or person authorized to collect such premium by or before the day it falls due, the policy and all payments thereon will be forfeited and void." While the letter is not set forth in the record, it appears from a letter of Wyman as cashier to Ellis of April 3, 1906, that on March 30th Ellis had written a letter to Baker, the general manager, making application for a loan on both his policies. This reply of Wyman inclosed a loan agreement to be duly executed, stated that the loan value of each policy was $575, and notified Ellis that a remittance by him of $356.50 would be necessary to complete the transaction; it being evident that the loan applied for by Ellis was for the purpose of paying the premiums on both policies that matured March 24th. Ellis replied to Wyman's letter on April 5th. He stated that he thought there must be some mistake about the matter; that he wanted the date of payments set up just nine months—that is, from March 24th to December 24th—and desired to make the payment in such way as would bring that about; that the loan value of $575 of each of the policies, as stated by Wyman, was in excess of the amount of the premiums for the nine months period; and that the amount of the cash payment requested by Wyman and the loan value of the policies would be $57 in excess of the year's premium. He requested that the matter be gone over again and that he be further advised. He wrote Wyman on April 11th referring to the previous correspondence and stating that he had received no reply to his letter. Wyman wrote him on the 12th of April inclosing a copy of his letter of the 3d of April. Ellis acknowledged receipt of this letter on April 15th advising that he had received Wyman's original letter of April 3d and had replied to it, which he supposed Wyman had not received, and he inclosed a copy of his reply to Wyman's letter of ...