Texas Mut. Life Ins. Ass'n v. Tolbert, 7086.

• Decision Date: 14 February 1940
• Docket Number: No. 7086.,7086.
• Citation: 136 S.W.2d 584
• Parties: TEXAS MUT. LIFE INS. ASS'N v. TOLBERT.
• Court: Texas Supreme Court

136 S.W.2d 584

TEXAS MUT. LIFE INS. ASS'N v. TOLBERT.

No. 7086.

Supreme Court of Texas.

February 14, 1940.

Error to Court of Civil Appeals of Eighth Supreme Judicial District.

Suit by Mrs. Hannah C. Tolbert against the Texas Mutual Life Insurance Association on a certificate of life insurance issued to William Thomas Tolbert. A judgment for the plaintiff was affirmed by the Court of Civil Appeals, 91 S.W.2d 900, and the defendant brought error. An opinion of the Commission of Appeals, 116 S.W.2d 1060, reversing the judgment of the Court of Civil Appeals and of the District Court and rendering judgment for the defendant, was adopted by the Supreme Court. On motion for rehearing the cause was withdrawn from the Commission of Appeals and the judgment of reversal and rendition was set aside and submitted to the nine-judge court.

Opinion of Commission of Appeals readopted and judgments of Court of Civil Appeals and of District Court reversed, and judgment rendered for the defendant.

Richey, Sheehy & Teeling, of Waco, for plaintiff in error.

Robert L. Holliday, of El Paso, and Henry T. Moore, of Los Angeles, Cal., for defendant in error.

PER CURIAM.

This case was submitted to and decided by Section A of the Commission of Appeals, in an opinion by Judge German reported in 116 S.W.2d 1060. On motion for rehearing the cause was withdrawn from the Commission of Appeals and the judgment of reversal and rendition set aside and submitted to the nine-judge Court. A reconsideration of the questions of law involved convinces us that the opinion written by Judge German correctly states the rules of law applicable to the facts of this case. Therefore, that opinion is readopted by the Court. The opinion is as follows:

"On or about October 21, 1929, William Thomas Tolbert was issued a certificate of insurance by the Texas Mutual Life Insurance Association in the sum of $5,000. This certificate provided for the payment of certain annual dues, and for an assessment in the sum of $5.50 payable upon the death of any member. Tolbert remained in good standing until February 21, 1933. On that date an assessment of $5.50 was made because of the death of a member and due notice was given. On February 23, 1933, Tolbert mailed check of Tolbert Commission Company in the sum of $5.50 to the Association. Tolbert lived at El Paso, Texas, and the general office of the Association was at Waco, Texas. The check was received at Waco in due course, credit given upon the books of the Company for same, and was returned in due course to the bank at El Paso, Texas, for collection. Apparently it was presented for collection on March 1, 1933, and when presented there were not sufficient funds to the credit of the Tolbert Commission Company to pay same. It was thereupon marked `insufficient funds.' Sometime during that day a deposit was made in the bank by the Tolbert Commission Company sufficient to have paid the check, but it was not paid by the bank. Beginning with March 2, which was a holiday, and continuing some ten days due to the National moratorium, the bank was closed. Apparently about March 12, the check was returned by the bank to the Association at Waco unpaid, bearing the notation `insufficient funds.' On March 14, 1933, the Association wrote Tolbert as follows:

"`Your check in amount of $5.50 drawn on the El Paso National Bank, El Paso, Texas, signed "Tolbert Com. Co., by W. T. Tolbert," has been returned to us with the notation "insufficient funds." This check was sent in payment of assessment due by you.

"`Won't you kindly let us have remittance in the sum of $5.50 covering this returned item, in order that we may consider placing this amount to your credit, as your policy is not in benefit at this time? Self addressed envelope is for your convenience.'

"On receipt of the letter Tolbert procured postoffice money order for $5.50 and immediately sent same to the Association. On March 17, 1933, the Association addressed the following letter to Tolbert:

"`We wish to acknowledge receipt of your Money Order in the amount of $5.50 sent to cover returned check. In view of the fact that the grace period of the assessment has expired it will be necessary that you execute the attached application for reinstatement and return to this office for our consideration. Self addressed envelope is for your convenience.'

"Tolbert was then in bad health and never executed application for reinstatement. A few days later, the Association returned the check and also the money order, notifying Tolbert that the Association considered his certificate forfeited. Thereupon Tolbert wrote the Association that he considered his certificate in good standing, and no further assessments were made or paid. Tolbert died April 20, 1934, and this suit followed. Mrs. Hannah C. Tolbert, surviving wife of William Thomas Tolbert, who was named as beneficiary in the certificate, was plaintiff and will be so designated here. Judgment in the trial court was for plaintiff for the full amount of the certificate, and this judgment was affirmed by the Court of Civil Appeals. 91 S.W.2d 900.

"Among the pertinent provisions of the certificate are the following:

"`This insurance is granted in consideration of the application herefor, a copy of which is attached hereto and which is made a part of this contract, and of the payment of each assessment which shall be levied by the directors of the Texas Mutual Life Insurance Association upon the death of a member hereof, as follows: $5.50 upon the death of any member in this class within ten days from the date of notice of such death, and one assessment per year as annual dues of $5.50 to be paid on or before the 1st day of October each year.

"`It is further agreed that failure to pay any assessment so levied within ten days from date of notice or to pay said annual dues shall forfeit all claims as a member of the Texas Mutual Life Insurance Association.

"`* * *

"`Assessment notices are posted to the last known address of the policyholder; however, failure to receive such notices does not relieve the policyholder of liability for payment of any assessment due. Remittances for assessments due should be sent in time to reach the Home Office of the Association by the tenth day after notices have been mailed, for, unless actually received by the tenth day after notices have been mailed, this policy shall automatically lapse and all benefits hereunder shall be forfeited until reinstatement of this policy has been approved by the Association.

"`This policy may be reinstated by the insured furnishing the Association evidences of good health, satisfactory to the Association within ninety (90) days after it has lapsed and the payment of all past due assessments.

"`* * *

"`The obligations assumed by the members of this Association shall be several and separate as to each member and not the joint obligation of all. * * *

"`This policy is subject to all the bylaws of the Association now in force or that may hereafter be enacted.'

"Among the pertinent provisions of the by-laws of the Association are the following:

"`A certificate of membership to become effective and be binding is conditioned upon the payment in full of the application fee having been actually received by said Association and upon the payment having been actually completed of subsequent assessments as may be levied by the officers of the Association on such certificates. Completion of payment of the membership fee or of any subsequent assessment shall be conditioned upon any check or instrument, tendered to cover such payment, being paid in accordance with its tenor and a bona fide remittance made to cover such payment. (Emphasis ours.)

"`* * *

"`Failure on the part of any member of any class of this Association to pay any assessment within ten days from date of notice thereof, or failure to pay Annual Dues or the Special Benefit Assessments when same are due or failure to have completed payment of application fee in full, shall act as a complete forfeiture of all the rights of any member of said Association to any claim against said Association and said certificate issued to said member by the Association shall become null and void and of no effect.

"`* * *

"`Upon the rights of any member of said Association being forfeited in the manner and under the conditions as above set...