Equitable Life Assur. Society v. Ellis

• Decision Date: 08 January 1913
• Citation: 152 S.W. 625
• Parties: EQUITABLE LIFE ASSUR. SOCIETY OF UNITED STATES v. ELLIS.
• Court: Texas Supreme Court

Page 625

152 S.W. 625

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

Supreme Court of Texas.

January 8, 1913.

On rehearing. Overruled.

For former opinion, see 147 S. W. 1152.

PHILLIPS, J.

The correctness of the opinion in its statement of the record has been challenged by the motion and written argument on rehearing in two particulars. It is said that the record does not disclose that any special concession was made by the company to Ellis in respect to the 1905 premium, and that the statement in the opinion, in effect, that the company's action, through its cashier, Bourke, in relation to that premium evinced, as we viewed it, a purpose to maintain the insurance in force even at some breach of its rules and some sacrifice of its general policy, was unwarranted, because, after he had defaulted in the payment of that premium, Ellis was required to reinstate the policy as provided by its terms; that is, by furnishing a certificate of good health. It is true that finally in November of 1905, after Ellis had failed to pay the premium upon August 22d, the date of its extended maturity, the reinstatement of the policy was thus effected and the maturity of the premium extended to December 22d, but the following features of the record justify all that was said in the opinion in respect to this matter:

(1) After the original extension of the premium from March 24th to August 22d and Ellis' default in its payment on that date, a further extension was granted to December 22d, notwithstanding Bourke declared in his letter of August 21st that an extension for 60 days from August 22d was "longer than the society usually grants."

(2) Although the premium was due on August 22d and the policy was subject to forfeiture if it was not paid on that date, Bourke, according to this same letter, extended it "to give time to receive the remittance" which he was urging Ellis to make.

(3) While Bourke was insisting that it was necessary for the remittance to be in his hands before he could take up with the home office the matter of the further extension that Ellis had requested, when Ellis in his letter of August 31st threatened to take out his insurance in another company, Bourke, according to his letter of September 5th, referred the matter to the home office without having received any remittance.

(4) Bourke's declaration in his letter of September 22d that the company had informed him of its willingness "to make a special concession in this case," although "contrary to its rules." Conceding that this related to a reinstatement of the policy based upon a showing of good health, it is plain from this statement that under the existing circumstances the company regarded a reinstatement of the policy even on that condition as a special concession and as contrary to its rules.

(5) Although under the extension granted to that date the premium was due on December 22d, and the policy was subject to forfeiture if not then paid, Bourke received and applied without question Ellis' remittance for the premium that could not have reached the San Antonio office before December 23d.

Further, it is said that we should correct the statement in the opinion that Wyman's letter to Ellis of May 9th was written pursuant to Brophy's letter to Wyman of April 25th, in which connection it is urged that Ellis was advised on May 1st of Brophy's reply of April 25th to Wyman's letter. This is a strained criticism of the opinion, for it is not there said that Ellis was not advised until May 9th of Brophy's reply to Wyman's letter. On the contrary, the opinion states fully the contents of the May 1st letter from Wyman to Ellis. Wyman's letter to Ellis of May 9th was correctly referred to as having been written pursuant to Brophy's letter, for it expressed an offer of the company to make a loan on the policies exactly as Brophy had therein authorized.

We have carefully reviewed the several assignments of error in the light of all that has been said in the motion and written argument, and remain of the opinion that the case should be decided as it was upon the original hearing. We confined the discussion in the opinion principally to the question of waiver because we regarded it as the real question in the case, and considered that none of the assignments relating to the charge of the court and the admission of testimony was well taken. The charge of the court was more favorable to the insurance company than the law demanded, as it required the jury to find more than was necessary to entitle the plaintiff to a verdict.

The correspondence relative to the 1905 premium was admissible as tending to show the company's attitude toward the risk as revealed by its action in respect to the payment of that premium. In this sense, it was probative upon the question of the company's purpose and intent in its negotiation with Ellis respecting the payment of the 1906 premium, and it was therefore proper for the jury to consider it in determining whether such negotiation amounted to a waiver of the forfeiture. The question of Wyman's authority to make Ellis the proposal of a loan upon the policies that was made in the letter of May 9th is disposed of by Brophy's having authorized such an offer in his letter to Wyman of April 25th. And that the company was bound by Brophy's act does not admit of question. He was a general official of the company, in charge of its loan and extension department at its headquarters in New York. To him loans and extensions were referred. He had undoubted general authority in all such matters. His authorization to Wyman of the proposal that Wyman made to Ellis was clearly within the scope of his powers; and his act may, therefore, be regarded as the act of the company itself.

It is not necessary to a re-examination of the position of the plaintiff in error on the question of waiver as elaborated in the motion and argument for rehearing to here restate in full what occurred between its agents and Ellis in regard to the premium for the year 1906. It matured on March 24th. It was not paid on that date, nor within the 30 days of grace provided by the policy. While the policy was subject to reinstatement thereafter upon payment of the premium with interest and upon proof of good health satisfactory to the company, no effort was made by Ellis to thus reinstate it, nor in all the negotiation that transpired in respect to the matter was there any suggestion by the company of any necessity for such reinstatement. The negotiation between Ellis and the company in regard to the 1906 premiums on both policies began on February 16th, and ended with Wyman's letter of May 9th. Ellis was shot on May 11th, and died the following day. The last word in the negotiation was the concluding sentence in Wyman's letter of May 9th: "The society is willing to lend you $1159.00 on the policies to apply toward the payment of the premiums due a short time ago." In previous letters Wyman had stated that the loan value of the policies was $1,150 if the premiums for three years—that is including those for 1906 were paid—and had insisted that Ellis should remit $356.50 to complete the loan transaction that was pending, which amount, together with the loan value of the policies, would cover the premiums for the full year, $1,449, and interest for one year. Throughout the negotiation Ellis was insisting that he did not wish to borrow an amount necessary to cover the premiums for a full year, but that he desired the maturity of the premiums set up for nine months, or from March to December, and his letters indicate that he considered that this might be done without the payment of any amount in cash, inasmuch as the amount he wanted to borrow on the policies as security was only the amount of the premiums for nine months, which was less than the stated loan value of the policies. He had declined to consummate the transaction as...