Provident Ins. Co. v. Bagby

• Decision Date: 14 November 1941
• Docket Number: No. 2197.,2197.
• Citation: 167 S.W.2d 813
• Parties: PROVIDENT INS. CO. v. BAGBY.
• Court: Texas Court of Appeals

Page 813

167 S.W.2d 813

PROVIDENT INS. CO. v. BAGBY.

No. 2197.

Court of Civil Appeals of Texas. Eastland.

November 14, 1941.

Appeal from Baylor County Court; O. McDaniel, Judge.

Action by Catherine Bagby against the Provident Insurance Company on a life policy. Judgment for plaintiff, and defendant appeals.

Reformed and affirmed.

Percy C. Fewell, of Dallas, for appellant.

R. Judson Balch, of Seymour, for appellee.

GRISSOM, Justice.

Catherine Bagby brought this suit against Provident Insurance Company upon an insurance policy issued by defendant to plaintiff's husband, Thomas Bagby, deceased, in which plaintiff was designated as the beneficiary. Plaintiff alleged that on February 22, 1940, defendant, in consideration of $3 paid by Bagby, issued its insurance policy under the terms of which defendant agreed and became bound to insure Thomas Bagby in the sum of $300, and upon his death to pay his beneficiary said amount, provided said policy was delivered to Bagby while he was in good health. That on March 1, 1940, while Bagby was in good health and free from any disability, said insurance policy was delivered to Bagby and became effective immediately; that Bagby died March 10, 1940, while said policy was in full force and effect; that within less than 91 days thereafter notice of his death was given to defendant and defendant "denied liability to the beneficiary under the terms of its insurance policy." That payment had been demanded and refused. A copy of the insurance policy, which contained a copy of Bagby's application for insurance, was attached to and made a part of the petition.

The defendant answered specially that the policy sued on contained the following provision: Section 8: "The company will not be liable for any claim if the insured dies within ninety days from the date of this policy * * * however, the company will pay to the Beneficiary, named in this policy, all money paid hereon." Defendant alleged that only $3 had been paid on the policy; that said amount had been tendered to plaintiff and refused, and defendant again tendered said amount to plaintiff; that the policy was issued February 22, 1940, and delivered March 1, 1940; that insured died on the 23rd day of March, 1940, less than 90 days after the date of the policy, and therefore the maximum liability of defendant on the policy was $3.

Plaintiff, by supplemental petition, alleged the application for insurance contained the following provision: "* * * and do you understand and agree that the contract binding you and the company is entirely in writing, and that it is limited to this application and the policy of insurance; and do you understand and agree that no oral statements are to bind either party to this agreement, and that the contract is not binding until at least three months' premium is paid in cash and this application is approved by the company and the policy is issued and delivered to you during your continued good health and free from any disability?" (Italics ours).

Plaintiff alleged said provision was in conflict with section 8 of the policy "in that the same clearly provides that such policy of insurance is binding when three months' premium is paid in advance and said application is approved by the company and the policy is issued and delivered to applicant during his continued good health and free from any disability." That such conflict caused the contract to be ambiguous as to when it became effective. Plaintiff further alleged defendant had waived section 8, insofar as it provides the policy does not become binding until 91 days from date of issuance, and was estopped from denying that the policy became binding upon delivery to Bagby while he was in good health, because defendant and its agent made representations, oral and written, that said contract of insurance became effective upon delivery while applicant was in good health and free from disability; that it was the intention of the parties that the contract should be "effective on the date delivered to the applicant", if he was then in good health and free from disability, and not 91 days from the date of the policy. In the alternative, plaintiff alleged that if she were mistaken as to the intention of the parties that defendant's agent "who acted within the apparent scope of his authority, misinformed the insured that said contract became effective upon date of delivery;" that relying upon such representation Bagby made application for the insurance and considered said policy binding as of the date of delivery and that said acts and representations estopped defendant from denying liability for this...