National Life Co. v. Wolverton

• Decision Date: 04 June 1942
• Docket Number: No. 2491.,2491.
• Citation: 163 S.W.2d 654
• Parties: NATIONAL LIFE CO. v. WOLVERTON.
• Court: Texas Court of Appeals

163 S.W.2d 654

NATIONAL LIFE CO. v. WOLVERTON.

No. 2491.

Court of Civil Appeals of Texas. Waco.

June 4, 1942.

Rehearing Denied July 2, 1942.

Appeal from District Court, Nineteenth District, McLennan County; R. B. Stanford, Judge.

Action by Charlie T. Wolverton, Sr., against National Life Company for damages for the wrongful rescission and cancellation of a life policy. From an order overruling a plea of privilege, defendant appeals.

Affirmed.

Coker, Rhea & Vickrey, of Dallas, and Sleeper, Boynton & Kendall, of Waco, for appellant.

Darden & Burleson, of Waco, and Chas. M. Harris, of Mart, for appellee.

HALE, Justice.

This is an appeal from an order of one of the district courts of McLennan County overruling a plea of privilege. The proceedings arose out of an action for damages on account of the alleged breach of a contract of life insurance. Upon issues properly raised by the pleadings, the trial court found and concluded that the suit came within each of the exceptions embraced in subdivisions 23, 27, 28 and 28a, respectively, of Article 1995 of Vernon's Texas Statutes. A correct disposition of the appeal turns upon whether the evidence adduced upon the hearing was sufficient to sustain the essential findings with respect to one or more of the four exceptions.

Under appropriate points in its brief, appellant contends that the proof was insufficient as a matter of law to establish the existence of a cause of action, or to show that such cause of action, if any, or any part thereof, arose or accrued in McLennan County, or that the suit was on a policy of life insurance, or that the action was brought against a state-wide mutual assessment company growing out of or based upon any alleged right or claim arising from or predicated upon any policy issued by it, all within the meaning of the venue statute. These contentions require an extended statement from the record.

Appellee, Charlie T. Wolverton, Sr., is now and has been continuously since the year 1902 a resident of Mart in McLennan County, Texas. On February 15, 1917, at the solicitation of J. P. Smith, he made application at his place of business in Mart on a printed form for membership and insurance in the National Life Association of Des Moines, Iowa, and paid the sum of $73.06 as the first annual premium on the policy applied for. It was agreed in said application, however, that the Association should incur no liability under the same until the policy had been issued by the Association and delivered to the applicant while in good health. At the same time appellee submitted to medical examination at the hands of a physician in Mart. Smith then transmitted the application, medical examination and premium payment to the Association at Des Moines, Iowa. On February 23, 1917, the Association issued its policy or certificate insuring appellee, who was then 55 years of age, in the sum of $2,000, payable to his wife as beneficiary. The certificate, with a copy of the application and report of medical examination attached thereto, was thereafter delivered by agent Smith at Mart, Texas, to appellee while in good health.

This certificate recites on its face that the insurance therein specified is granted in consideration of the application and medical examination and of the payment of $73.06 as a first annual payment and the payment of all subsequent amounts required under the contract during its continuance. The certificate further provides on its second page that after the first annual payment, the insured agreed to make subsequent annual payments: "(a) For the General and Benefit Funds, such amounts as may be levied by the Board of Directors of the Association, the entire Mortuary and Surplus Funds being pledged to maintain an annual rate therefor which is not in excess of $73.06; also the Reserve Fund may be drawn upon to maintain said rate, if the amount realized therefrom for Mortuary purposes is not sufficient. (b) For the Reserve Fund, the sum of fifty cents for each year of the insured's age, as stated herein, for each One Thousand Dollars of insurance carried, which amount shall be paid once only, and may be paid in installments as authorized by the Board of Directors, with five per cent annual interest. All savings, between the amount levied for the General and Benefit Funds in any one year, and the maximum rate for the said Funds, above stated, will be applied upon this Reserve Fund obligation, until it is paid in full."

National Life Association was a mutual assessment company exclusively at the time when it issued the certificate above referred to and it was then duly authorized to do business in Texas as such. On January 30, 1929, its charter was amended under the laws of the State of Iowa so as to authorize it under the name of National Life Company to thereafter continue its business as a mutual assessment company insofar as may be necessary to carry out all its contracts theretofore made with its members or policyholders, and in addition thereto, it was authorized by said amendment to thereafter transact the business of life insurance as a legal reserve or level premium company, and since that time it has transacted business in Texas in both capacities. Appellee paid to National Life Association and to appellant, National Life Company, respectively, the sum of $73.06 under his contract for each of the years from 1917 to and including the year ending February 23, 1941. On January 29, 1941, appellant notified appellee that his annual premium had been increased from $73.06 to $398.26. Thereupon appellee offered to pay the annual premium of $73.06, which appellant refused to accept, and hence this suit.

The records, reports and parol testimony introduced in evidence are too voluminous to be here set forth even in the briefest summary. While it was shown that there had been a substantial and steady decrease over a period of years in the assets of appellant belonging to its assessment members, such as appellee, it appears that said assets at the end of the year 1940 amounted to approximately Two Million Dollars. Nolan C. Phillips, a certified public accountant, testified at length as an expert witness with respect to the financial history of appellant as reflected by copies of its annual reports to the Commissioner of Insurance of the State of Texas. The substance of his testimony was that there was no necessity disclosed by these records for the increase of the premium as demanded by appellant. Perry Duncan testified that he had been engaged in the insurance business for twenty years and during that time had become familiar with rate structures; that all rates are based essentially upon the American Experience Tables of...