National Life Co. v. Stegall

• Decision Date: 03 March 1943
• Docket Number: No. 1931-8030.,1931-8030.
• Parties: NATIONAL LIFE CO. v. STEGALL et al.
• Court: Texas Supreme Court

169 S.W.2d 155

NATIONAL LIFE CO. v. STEGALL et al.

No. 1931-8030.

Commission of Appeals of Texas, Section B.

March 3, 1943.

Rehearing Denied March 31, 1943.

Certified Questions from Court of Civil Appeals of Sixth Supreme Judicial District.

Suit by Florence A. Stegall and another against the National Life Company to recover damages for anticipatory breach of a life policy, wherein defendant filed a plea of privilege to be sued in another county. From an order overruling the plea of privilege, defendant appealed to the Court of Civil Appeals which sustained the order and certified a question to the Commission of Appeals.

Certified question answer in the negative.

Coker, Rhea & Vickrey, of Dallas, for appellant.

Guinn & Guinn, of Rusk, for appellees.

SMEDLEY, Commissioner.

Pending disposition of a motion for rehearing, the Court of Civil Appeals for the Sixth Supreme Judicial District has certified to this court a question of law, on account of conflict between its decision of the same herein and that of the Court of Civil Appeals for the Seventh Supreme Judicial District in National Life Co. v. Harvey, 159 S.W.2d 920. The nature of the case and the material facts are thus stated in the certificate:

"Suit was filed by appellee Florence A. Stegall (insured), joined by her husband, F. C. Stegall (beneficiary), in the District Court of Cherokee County, Texas (the county of their residence), against appellant, National Life Company (insurer), to recover damages for anticipatory breach of a policy or contract of life insurance, measuring the damages as being the present value or worth of the policy, alleged to have been wrongfully repudiated and breached by appellant.

"Appellant timely filed a plea of privilege in statutory form to be sued in Dallas County, alleging that it was a life insurance company incorporated under the laws of the State of Iowa; that it had a permit to do business in Texas, and that its principal place of business in Texas, and its only office in Texas, was located in Dallas County, Texas. Appellee duly contested the plea of privilege, made her petition a part of the controverting affidavit, contended, among other grounds, that venue of the suit was controlled by Sec. 28 of Art. 1995, R.C.S. of 1925, which provides: `Suits on policies may be brought against any life insurance company * * * in the county * * * where the policyholder or beneficiary instituting such suit resides.' From an order of the trial court, entered upon a hearing, overruling the plea of privilege, the National Life Company appealed. We sustained the judgment of the trial court."

The question certified is as follows: "Is a suit by the policy holder to recover the present value or worth of the policy, on the alleged ground that it has been repudiated and breached by the insurance company, a suit on the policy, within the meaning of such language as used in Section 28 of Article 1995, Revised Civil Statutes of 1925?"

This suit was brought by the policy holder in the district court of the county in which she resided. It is a suit to recover damages on account of the insurer's alleged wrongful repudiation and breach of the policy or contract of life insurance, the damages sought to be recovered being the value of the policy at the time of the breach. Section 28 of Article 1995 provides that "suits on policies" of life insurance may be brought in the county where the policy holder or beneficiary instituting the suit resides. Is this a suit on the policy within the meaning of the statute?

The opinion of the Court of Civil Appeals herein proposes, as controlling, the question whether this suit is an action for damages based upon violation of a contractual duty, an action ex contractu, or an action for damages based upon the violation of some duty imposed by law independent of contract, an action ex delicto; and most of its opinion demonstrates that the suit is an action ex contractu rather than an action ex delicto. Appellees devote most of their brief to the same question. Undoubtedly, the suit is an action ex contractu, being for the recovery of damages because of the insurer's breach of the contract. An action ex contractu has been defined as one "arising out of a contract, express or implied". 1 Tex.Jur. p. 616, Sec. 11. See also 1 C.J.S., Actions, p. 943, § 1; 1 Am. Jur. p. 441, Sec. 50. This suit arises out of a contract, the policy of insurance. But this does not answer the very question presented, is it a suit "on the policy" within the meaning of Section 28 of Article 1995?

In Reliance Life Insurance Co. v. Robinson, Tex.Civ.App., 202 S.W. 354, the insured, after cancellation of the policy by the insurer, sued to recover the premium he had paid. It was held that the trial court erred in overruling the insurer's plea of privilege, because the action arose upon the implied promise to return the money paid as the first premium, and was, therefore, not a suit on the policy within the meaning of Article 4744 of the Revised Civil Statutes of 1911, the language of which is, as to venue in suits against life insurance companies, the same as that of Section 28 of Article 1995 of the Revised Civil Statutes of 1925. The Court of Civil Appeals, in Texas Mutual Life Insurance Co. v. Bryan, 67 S.W.2d 1106, citing and following Reliance Life Insurance Co. v. Robinson, supra, held that a suit to recover all premiums paid on a policy wrongfully cancelled by the insurer did not come within Section 28 of Article 1995 as being a suit on an insurance policy.

In the two cases last cited the suits were based upon implied obligations arising out of the contracts of insurance; and they were, therefore, actions ex contractu. If regarded as actions of assumpsit, the suits were actions ex contractu, for assumpsit, although it was in its origin an action ex delicto, has long been classified as an action ex contractu. Gould v. Baker, 12 Tex.Civ. App. 669, 35 S.W. 708; Jackson v. Chapman, Tex.Civ.App., 263 S.W. 958; Philpott v. Superior Court, 1 Cal.2d 512, 39 P.2d 635, 95 A.L.R. 990, 994, 995, 999; 7 C.J.S., Assumpsit, Action of, p. 109, § 1; 4 Am.Jur. p. 495, Sec. 3 and note; 5 Tex.Jur. p. 152, Sec. 2.

The policy holder in National Life Company v. Harvey, Tex.Civ.App., 159 S.W.2d 920, 923, filed suit in the county of his residence for damages, the value of the policy, alleging that the insurer had...