North American Accident Ins. Co. v. Bowen

• Decision Date: 27 April 1907
• Parties: NORTH AMERICAN ACCIDENT INS. CO. v. BOWEN.
• Court: Texas Court of Appeals

102 S.W. 163

NORTH AMERICAN ACCIDENT INS. CO. v. BOWEN.

Court of Civil Appeals of Texas.

April 27, 1907.

Rehearing Denied May 18, 1907.

Error from District Court, Dallas County; Richard Morgan, Judge.

Action by W. R. Bowen against the North American Accident Insurance Company. There was a judgment for plaintiff, and defendant brings error. Affirmed.

Geo. H. Plowman, for plaintiff in error. Carden, Starling & Carden, E. G. Senter, W. T. Strange, B. B. Hemphill, and S. W. Marshall, for defendant in error.

TALBOT, J.

This action was brought by the defendant in error, Bowen, on an accident insurance policy issued by the plaintiff in error August 1, 1903. By the terms of the policy Bowen was insured for one year against the direct effect of bodily injury in the sum of $15 per week for not exceeding 104 consecutive weeks, where the injury received should wholly and continuously disable him from transacting any and every kind of business, or, if received while riding as a passenger in or on a public conveyance provided by a carrier of passengers for compensation propelled by electricity, then the amount to be paid to the insured was $30 per week. Bowen sought to recover for injuries received by him in two accidents while he was a passenger on a street railway in the city of Dallas, Tex., one occurring November 16, 1903, and the other March 20, 1904. The plaintiff in error defended on the ground that the policy of insurance was for the period of two, two, three, and five months, respectively, as separate and distinct periods of insurance, for which the company took the notes of the insured for $3.75 each, being four in number, each dated August 1, 1903, and to become due, respectively, September 1, October 1, November 1, and December 1, 1903, and that neither of said notes was paid at its maturity; that by the terms of the contract such default ipso facto terminated the whole policy, and therefore said policy was not in force at the date of either of the alleged accidents. Defendant in error replied that he paid the first note on October 3, 1903, a month after its maturity (which was September 1, 1903); that the second note matured October 1, 1903, and that same, by two extensions of time of payment by plaintiff in error's agent, was extended, together with the third note, to November 20, 1903; that the first accident occurred November 16, 1903; that the period of insurance covered by the note maturing October 1, 1903, extended from October 1, 1903, to December 1, 1903, and that plaintiff in error was liable to him for that accident for more than enough to pay off the unpaid notes; and that it was its duty to have applied sufficient of its liability to fully pay off the notes. Plaintiff in error denied its agent's authority to extend the time of payment of the notes, and plead in effect that, by reason of the nonpayment of the last three, they had been canceled and the policy was not in force when the first accident happened. From a verdict and judgment in favor of Bowen, this writ of error is prosecuted.

The policy was issued on the 1st day of August, 1903. It provides "that in consideration of the warranties, stipulations and agreements contained in the application therefor and of the sum of fifteen dollars to be paid to it in four equal installments on or before the end of one, two, three and four calendar months, respectively, as specified in notes bearing even date with this policy given by the insured in favor of this company does hereby insure. * * * The payment made in the notes herein mentioned are premiums for separate and consecutive periods of two, two, three and five months and each is to apply only to its corresponding insurance period. All claims for injuries received during any period for which the respective premiums shall not have been actually paid, shall be forfeited to the company, except that the insured agrees for himself, his estate and the beneficiary named in this policy, that if a valid claim, for indemnity, fatal or otherwise, arises before the first note matures the amount due for such claim shall be first applied to the payment of the notes," under said policy, etc. The foregoing are all the provisions in the policy respecting the notes or payment of premiums. A forfeiture is not declared in the policy in the event of the nonpayment of said notes or either of them. The policy further provided that notice of any accidental injury for which claim was to be made should be given in writing "within ten days from the date when it becomes possible to give such notice of injury," and that a failure to give such notice should invalidate all claims under the policy. It also provided that "the terms of this policy cannot be waived or altered by any agent or solicitor and no modification or alteration of any of its provisions shall be valid, unless endorsed hereon by the President or Secretary of the company." The application of Bowen for the policy contained the following provision: "I agree that the policy shall embrace four separate insurance contracts and shall not be in force after maturity of first note, except by actual payment of the first and succeeding premium notes at maturity in their consecutive order, and that no claim based upon an injury, fatal or otherwise, received during any period, the amount of the premium note for which shall not have been actually paid in cash when due, shall be valid." Each of the "premium notes" were for the sum of $3.75, bore date August 1, 1903, and payable in one, two, three, and four calendar months, respectively, from their dates to the order of plaintiff in error. The first note provided that, if it was not paid in full at maturity, said policy and all insurance thereunder should terminate on the date of the maturity thereof. The last three notes each provide: "It is agreed that, if this note shall not be paid in full at maturity, said policy and all insurance thereunder shall terminate" at the end of two, four, and seven calendar months from the date thereof. James A. Rhodes was the agent of the plaintiff in error and general manager of its Southwestern Department, with headquarters at Dallas, Tex. He was authorized to, and did, write and deliver the insurance policy to Bowen and took his notes and application therefor. The notes were retained by him for collection and he received payment of the first note, which was paid to him by Bowen on the 1st or 3d day of October, 1903. The other notes were never paid by Bowen. There was nothing said between Rhodes and Bowen about the extent of Rhodes' authority to represent the company, and, in fact, Bowen knew nothing about his authority or relations with the company, except such as appeared from the printed application he signed and might be inferred from his acts and conduct. When the first note became due, Bowen was unable to pay it, and the time of its payment was extended by Rhodes until it was paid, as heretofore stated. The time of the payment of the second and third notes was also extended by Rhodes at the request of Bowen until November 20, 1903. On November 16, 1903, the first injuries of which Bowen complains were received by him while riding on a street car propelled by electricity in the city of Dallas. These injuries, according to the undisputed evidence, wholly and continuously disabled him from the transaction of his business for the period of two weeks and partially for a considerable period thereafter, and entitled him to recover of plaintiff in error under the terms of the policy sued on a sum which was largely in excess of the amount of the three premium notes then held by James A. Rhodes for the insurance company unpaid against him. The second injuries of which the defendant in error complained were inflicted upon him on March 20, 1904, while riding on a street car propelled by electricity, and the evidence justified a recovery in the amount awarded by the jury. Neither Rhodes nor the company, through any other agent, ever notified Bowen that the company claimed a forfeiture of the policy on account of the nonpayment of the notes at their maturity, or on any other account. Nor did the company, through any agent or otherwise, offer to return to Bowen his notes and demand the delivery to it of the policy issued to him. About December...