Great Southern Life Ins. Co. v. Johnson, 1131-5409.

• Decision Date: 26 March 1930
• Docket Number: No. 1131-5409.,1131-5409.
• Citation: 25 S.W.2d 1093
• Parties: GREAT SOUTHERN LIFE INS. CO. v. JOHNSON.
• Court: Texas Supreme Court

Page 1093

25 S.W.2d 1093

GREAT SOUTHERN LIFE INS. CO. v. JOHNSON.

No. 1131-5409.

Commission of Appeals of Texas, Section B.

March 26, 1930.

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

Action by H. I. Johnson against the Great Southern Life Insurance Company. Judgment for plaintiff was affirmed on condition of remittitur by the Court of Civil Appeals [13 S.W.(2d) 424], and defendant brings error.

Reversed and remanded.

See, also, 294 S. W. 675.

Vinson, Elkins, Sweeton & Weems and Fred R. Switzer, all of Houston, for plaintiff in error.

R. S. Ragsdale, of Burkburnett, for defendant in error.

RYAN, J.

The Great Southern Life Insurance Company issued, on March 12, 1920, to H. I. Johnson, then a merchant at Burkburnett, Tex., a life and accident insurance policy in the sum of $20,000, payable to the wife, at his death. The policy also contains provisions for the company waiving annual premiums and the payment to the insured of one-tenth of the face of the policy, to wit, $2,000 annually for ten years upon satisfactory proof made by the insured of disability from disease or bodily injury "so that he is and will be thereby permanently, continuously and wholly prevented from performing any work for compensation or profit or from following any gainful occupation"; each installment so paid shall reduce to that extent the amount of the policy. The policy also requires the insured to, at any time, on the company's demand, furnish satisfactory proof of the continuance of such disability. The company shall have the right and opportunity to examine the insured's person, in case total disability is claimed, as often as it desires.

On December 11, 1921, Johnson was injured through the accidental discharge of a shotgun, the shot striking him about four inches above the knee in the center of the leg. As a result of an X-ray examination, it was decided to amputate the leg, which was done, leaving about five inches of the stump. About a year and a half later, a second operation was performed, but the stump has never fully healed. When he obtained the policy, Johnson was engaged in the mercantile business at Burkburnett; the business was estimated to have been worth at that time $125,000. He had never followed any other vocation than the dry goods business, either as clerk or salesman, or in business for himself. After his injury, he continued in the mercantile business for some little time, finally having to take bankruptcy proceedings.

After the injury, he paid the annual premiums maturing in March 1922, 1923, and 1924, respectively; he made no further payment of premiums.

On March 23, 1925, he filed a claim with the company for disability insisting that he was disabled to the extent specified in the policy; the company refused payment, and on March 30, 1926, he filed suit to recover the first installment of $2,000, and the difference between $1,712.40 (amount of the three premiums paid by him after his injury) and a loan of $1,250.91 which the company had made him. He also sought to have the remaining nine installments of the policy paid annually by the company.

That case was submitted to a jury on special issues, upon the answers to which the trial court rendered judgment against the company for the sum of $2,000, being 10 per cent. of the policy and $461.48, the difference between the amount of the premiums he paid after the injury and the amount of the loan, but refused to render judgment maturing the other nine installments.

The following were the issues submitted— all answered "Yes" by the jury, viz.

No. 1. Did the injury sustained by the plaintiff on or about December 11, 1921, totally disable him?

No. 2. Is said disability permanent?

No. 3. Has such disability been permanent to the present time?

No. 4. Will such disability continue for the remaining portion of plaintiff's life time?

The judgment contains this further recital: "The court further finds that the plaintiff is not entitled to recover judgment maturing the installments of $2,000.00 a year maturing in the future. This judgment in respect to future installments is without prejudice to the rights of either of the parties hereto in any litigation that may be had concerning said future installments."

This judgment was affirmed on appeal ([Civ. App.] 294 S. W. 675), and afterwards paid by the company.

The company refused to pay the next installment of $2,000 alleged to be due under the terms of the policy, and Johnson filed suit against the company therefor on November 19, 1927, together with the statutory penalty of 12 per cent. and reasonable attorney's fees, which resulted, after a trial by the court without a jury, in a judgment rendered on January 4, 1928, against the company, for the installment of $2,000, with legal interest thereon from March 23, 1927, together with $240 penalty and $750 attorney's fees.

The company's answer alleged that, since the trial of the first suit, new evidence exists showing conclusively that the plaintiff was not totally and permanently disabled within the terms of the policy, in that since January, 1926, he has been and is a duly elected and acting justice of the peace, and is now able and does actually engage in work for compensation and profit, and follows a gainful occupation. Its prayer was that plaintiff take nothing, that the judgment in the first case be set aside, and he be restrained from asserting any right thereunder, or any liability against it on account of said policy and from prosecuting any suit or suits on said policy. Said judgment was affirmed on appeal (13 S.W.(2d) 424) by the honorable Court of Civil Appeals for the Seventh Supreme Judicial District, except that a remittitur of $250 on the attorney's fees was required by the court and entered by defendant in error.

The company's application for writ of error is based upon certain assignments of error, concretely stated as follows:

(1) Because the policy provides that before an installment thereof, claimed to be due for any given year, the result of injuries compensable thereunder can be recovered, said policy must be returned to the company for indorsement thereon, and a regular demand must be made on the company for each payment, and no recovery should be had, because the plaintiff failed to prove such tender and demand.

(2) No recovery for statutory attorney's fees and penalty should be had because plaintiff below did not allege a proper demand upon the company after the installment became due and before suit was filed, nor did he allege a contract or obligation on his part to pay a fee to the attorney.

(3) That the former judgment of July 9, 1926, which expressly provides "in respect to future installments it is without prejudice to the rights of either of the parties in any litigation that may be had concerning said future installments," is not res judicata that plaintiff was wholly prevented from performing any work for compensation or profit, or from following any gainful occupation, after its rendition and before any subsequent installment became due.

(4) That there was no proof showing the plaintiff to have been, at the time of the second trial, permanently, continuously, and wholly prevented from performing any work for compensation or profit, except the record in the former suit, but to the contrary that the proof does show that he became justice of the peace for one of the precincts of Wichita county, on January 1, 1927, and as such earned $667.25 in fees in civil cases during that year; that therefore he was engaged in a gainful occupation, which, under the terms of the policy, precluded recovery for that installment.

Opinion.

Plaintiff pleaded: "Plaintiff would further show to the court that said policy of insurance provides that same should be tendered to the defendant annually for the purpose of endorsement on the same, of the payments as they accrue and that plaintiff has so tendered said policy and here and now tenders said policy and demands payment of said sums due him, together with interest, attorney fee and penalty as provided by law and such contract, and that such payment be endorsed on said contract."

Plaintiff also pleaded: "Under provisions of said policy, and under the judgment entered by the court in said cause (meaning that of July 9, 1926), the defendant became obligated and bound to pay plaintiff the sum of $2,000.00 per annum, accruing on the 23rd day of March in each year from and after the 23rd day of March, 1926. That the payment due March 23rd, 1926, recovered in said judgment has been duly paid to the plaintiff, but the payment accruing on the 23rd day of March, 1927, has not been paid and is long past due and though often demanded, defendant has not paid same or any part thereof to plaintiff's damage in the sum of $3,740.00, together with the interest as follows: $2,000.00 principal, 12% statutory penalty of and by reason of the failure due demand and $1,500.00 as attorney fee which plaintiff would show to the court is a reasonable and necessary expense incurred by him."

The only evidence on the subject was that of R. S. Ragsdale, as follows:

"I, as representing the...