National Life Co. v. Rice

Decision Date27 January 1943
Docket NumberNo. 2444-7995.,2444-7995.
Citation167 S.W.2d 1021
PartiesNATIONAL LIFE CO. v. RICE et al.
CourtTexas Supreme Court

Petition denied.

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

Harris & Gordon and Mrs. Sam H. Amsler, Jr., all of Waco, for respondents.

BREWSTER, Commissioner.

This is a petition for a writ of mandamus. Leave to file it was granted on motion of relator, National Life Company. The writ is sought to require the Court of Civil Appeals at Waco to certify to the Supreme Court certain questions, hereinafter stated, growing out of the decision by that court of a plea of privilege appeal in National Life Co. v. Thomason, 160 S.W.2d 582.

Elbert J. Thomason, a resident of McLennan County, Texas, sued relator in the district court of that county, alleging (1) that on November 8, 1919, it issued an insurance policy on his life in the sum of $2,000 in consideration of an annual premium of $33.20; (2) that he paid this premium each year up to and including 1940; (3) that prior to November 8, 1940, the date when the premium for the succeeding year was due, it demanded of him payment of $159.20 as the premium due for that year; (4) that the demand was in violation of the policy terms and an unlawful attempt to exact an excessive premium of $126; (5) that he was past 62 years of age and, therefore, unable to get other insurance; (6) that he was ready, able and willing to pay the premium of $33.20 provided in the policy, and tendered the same into court. He prayed (1) that relator, which he alleged was a foreign corporation, of Des Moines, Iowa, with a permit to do business in Texas, be restrained by injunction from collecting the increased premium and from cancelling the policy for his failure to pay it; (2) for a writ of mandamus prohibiting relator from collecting the increased premium and compelling it to accept the contract premium and to keep the policy in force as long as it is paid; and (3) for such other relief "to which he may be justly entitled."

Relator filed a plea of privilege "in statutory form to be sued in Dallas County, the county of its only office and principal place of business in Texas, and the county of its residence." Thomason filed a controverting affidavit, incorporating his petition therein and alleging that he was a policyholder of relator's, resided in McLennan County, and that, therefore, venue was properly laid there under subdivision 28 of Art. 1995, R.S.1925, providing, "Suits on policies may be brought against any life insurance company * * * in the county * * * where the policyholder * * * instituting such suit resides." (Italics ours.)

The evidence offered on hearing of the plea established that Thomason resided in McLennan County; that relator was a corporation organized under the laws of Iowa, with its executive officer residing in that state; and that it had, by resolution, increased the assessment as alleged by Thomason. It was established, further, that the policy held by him contained the following provision: "The annual premium stated in the first page hereof, covers the first policy year beginning with the date of this policy. Subsequent premiums shall be due and payable annually at the beginning of each policy year in such amounts as shall be levied by the Board of Directors of the Association, the entire Benefit and Emergency Funds being pledged to maintain the same annual rate of premium paid the first year for this policy; should these funds become exhausted by reason of excessive mortality or other cause, the Emergency Reserve Fund then becomes available and may be used when authorized by the Board of Directors to further protect the rate."

The trial court overruled the plea, which action was affirmed by the Court of Civil Appeals.

On the ground that the decision conflicts with previous opinions of the Supreme Court and of other courts of civil appeals, relator seeks to have certified to this court several questions, which, condensed, are: (1) whether Thomason's petition amounts to a suit on an insurance policy as contemplated by subdivision 28 of Art. 1995, supra; (2) whether jurisdiction of the McLennan County district court to render an effective judgment on Thomason's petition is a venue fact under said subdivision 28; and (3) whether that subdivision must be strictly construed and clearly established before it will render inoperative the general rule of venue announced in Art. 1995.

The Court of Civil Appeals held that Thomason's petition amounts to a suit on the policy. We approve that holding. A "suit" is "any proceeding in a court of justice by which an individual pursues that remedy in a court of justice which the law affords him." Watson Co. v. Cobb Grain Co., Tex.Com.App., 292 S. W. 174, 176, quoting the language of Chief Justice Marshall in Weston v. City Council of Charleston, 2 Pet. 449, 7 L.Ed. 481. It is the prosecution of some demand in a court of justice. Ex parte Towles et al., 48 Tex. 413, 433.

When an insurance policy is repudiated by the insurer, the insured has his choice of three remedies. He may (1) regard the policy as cancelled and sue for his damages; (2) tender premiums as they mature, leaving the beneficiary to sue for the proceeds of the policy, less such premiums; or (3) bring an equitable proceeding for specific performance. Washington Life Ins. Co. v. Lovejoy, Tex.Civ. App., 149 S.W. 398, error refused; National Life Co. v. Harvey, Tex.Civ.App., 159 S.W.2d 920; Universal Life & Acc. Ins. Co. v. Shaw, Tex.Sup., 163 S.W.2d 376. Clearly, Thomason invokes the third remedy, because he seeks to compel relator to do what he claims it should do without the coercive power of the courts, that is, accept the premiums provided for in the policy and hold itself ready to pay the proceeds when it becomes liable to do so. See Municipal Gas Co. v. Lone Star Gas Co., Tex.Civ.App., 259 S.W. 684, affirmed, 117 Tex. 331, 3 S.W.2d 790, 58 A.L.R. 797. That he seeks a mandatory injunction does not change the nature of the action. 38 Tex.Jur., p. 643, sec. 3. His effort is to force relator to stand on the obligation which he alleges it assumed in issuing the policy. From his viewpoint, he is attempting to pursue, with respect to the policy, "that remedy in a court of justice which the law affords him." He is standing on the policy, demanding its performance. Universal Life & Acc. Ins. Co. v. Shaw, supra. Therefore, his is a suit on the policy within the meaning of subdivision 28.

Relator asserts that this holding conflicts with Reliance Life Ins. Co. v. Robinson, Tex.Civ.App., 202 S.W. 354, Texas Mut. Life Ins. Co. v. Bryan, Tex.Civ.App., 67 S.W.2d 1106, and National Life Co. v. Harvey, supra. There is no conflict. The first two cases are actions for the recovery of premiums paid on the policies, while the last is one for damages for breach of contract. In each of them the plaintiff treated the contract as repudiated. Here Thomason has not agreed to relator's repudiation of the policy; on the contrary, he seeks to enforce it. Therefore, the facts in those cases are not similar to those here, and it follows that no conflict is presented.

Relator's contention that the Court of Civil Appeals erred in holding that Thomason was not obliged to show that the district court of McLennan County could enter an enforceable judgment in order to maintain his suit there, in the face of its plea of privilege, is based on a misconception both...

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