Manhattan Life Ins. Co. v. Stubbs

• Decision Date: 16 October 1919
• Docket Number: (No. 7756.)
• Citation: 216 S.W. 896
• Parties: MANHATTAN LIFE INS. CO. v. STUBBS.
• Court: Texas Court of Appeals

216 S.W. 896

MANHATTAN LIFE INS. CO. v. STUBBS.

(No. 7756.)

Court of Civil Appeals of Texas. Galveston.

October 16, 1919.

On Motion for Rehearing, December 13, 1919.

Appeal from District Court, Galveston County; Robert G. Street, Judge.

Suit by James B. Stubbs against the Manhattan Life Insurance Company to recover on an endowment policy. Judgment for plaintiff for less than sum asked, and both parties appeal. Affirmed.

Seay & Seay, of Dallas, for appellant.

Charles J. Stubbs and F. Spencer Stubbs, both of Galveston, for appellee.

GRAVES, J.

Appellant, Manhattan Life Insurance Company, of New York, on December 26, 1902, issued its life insurance policy No. 131054 for $5,000 to Charles J. Stubbs. The annual premium was $353.40; it was known as an endowment or survivorship policy, entitled to dividends or shares of the surplus at the end of the 15-year period, and matured on December 26, 1917. The policy was, on January 9, 1903, for value, by Charles J. Stubbs assigned to James B. Stubbs, appellee here, after the first premium had been paid by the former. The company was promptly notified of the assignment and furnished a duplicate.

Ira F. Collins, the agent who solicited the insurance and delivered the policy, represented to Charles J. Stubbs, the insured, that the dividend at the end of 15 years would amount to $1,215, furnishing his written statement with figures to that effect, and if insured availed of the option which carried with it the dividend, he would receive the sum of $5,000 plus $1,215. The appellee before paying the second premium (the first having been paid by Charles J. Stubbs), corresponded with A. A. Green, Jr., manager of the Southwestern department of the insurance company, at Dallas, Tex., regarding the dividends and other rights under the policy. He had refused to pay the second premium and had caused to be returned to Mr. Green the official receipt, which had been sent through a bank. Mr. Green, the company's manager, on December 31, 1903, wrote appellee in response to his letter, and, among other things, stated to him:

"It is true the rates on this policy are high, but you will remember we had some difficulty in getting the company to issue the policy. It is a 15-year endowment policy. If the assured is living at the end of 15 years, the policy is worth its face value in cash, increased by the dividend additions, which will amount to about $1,200 or $1,300."

The policy and application, among others not deemed material, contained these provisions:

"That in the distribution of surplus or apportionment of dividends where the policy calls therefor, the principles and methods then in use by the company in its determination of the amount apportioned to any policy issued upon this application shall be, and are hereby adopted and accepted." "That no statements or promises of any agent of the company, unless written upon this application, shall be binding upon the company, nor shall any alteration of, or addition to, the terms and conditions contained in the application or the policy, be binding, unless in writing and signed by the president or secretary."

Before the policy matured in December, 1917, the company notified Mr. Stubbs that the dividends thereon upon the date of its maturity amounted to only $90.19, and sent him its draft for $5,090.19, being the face value of the policy with this sum for dividends added. The draft was made payable, however, to both Charles J. and James B. Stubbs, and its payment was further conditioned upon the execution by them both of a full release of any further claims or demands upon the part of either on account of the policy. This tender in like manner was again made on January 22, 1918. On both occasions James B. Stubbs returned the draft to the company, and stated that he would not accept it, because of the unfulfilled promises and statements of its agent, Collins, and Southwestern manager, Green, that he would get over $1,200 in dividends, instead of the $90.19 now tendered. In so declining, however, he offered to accept the face value of the policy, $5,000, and then adjust or litigate as to the dividends; but the insurance company declined to do this and refused to pay the $5,090.19 without the full release above referred to.

James B. Stubbs then filed this suit upon the policy, praying for the amount due thereunder, which he alleged to be not less than $6,200, for 12 per cent. penalty and reasonable attorney's fees, under Revised Statutes, art. 4746, together with 6 per cent. interest from the date the policy matured. He declared upon the above-mentioned representations as to the amount of the dividends made to Charles J. Stubbs by the local agent, Collins, at the time the insurance was taken out, and to himself by the department manager, Green, at the time he paid the second premium thereon, and averred that but for reliance thereon the insurance would never have been contracted for originally nor continued by payment of the second and succeeding premiums. There were also allegations in the alternative which it is not thought necessary to mention.

In answer, the insurance company denied knowledge of any such representations charged to have been made by its agents, averred that they had no such authority, and also pleaded the above-quoted provisions of the application and policy. At the same time, on June 19, 1918, it tendered into court, by turning the money over to the clerk, the sum of $5,090.19, conditioned upon its being in full settlement of the appellee's demands.

Upon the trial, the court, after overruling exceptions of both parties, rendered this judgment:

"The court is of the opinion that the evidence fails to show any authority on the part of the soliciting agent, or general agent, of the defendant to bind the company by agreement or promises that the company would pay a certain amount as dividends, and it is adjudged by the court that the plaintiff recover nothing as dividends, except $90.19 hereinafter allowed, and finds that the plaintiff is entitled to recover of the defendant the sum of $5,090.19. The court is of the further opinion that no legal tender was made by the defendant to the plaintiff herein of said $5,090.19 until June 19, 1918.

"The court further finds that plaintiff was entitled to 6 per cent. interest on the $5,090.19 from December 27, 1917, until June 19, 1918, which the court finds to be, upon agreed calculations, $150.

"The court is further of the opinion that plaintiff is entitled to recover penalties of 12 per cent. on said $5,090.19, which totals the sum of $610.82.

"The court is of the further...