Union Cent. Life Ins. Co. v. Chowning

• Decision Date: 03 October 1894
• Citation: 28 S.W. 117
• Parties: UNION CENT. LIFE INS. CO. v. CHOWNING.
• Court: Texas Court of Appeals

28 S.W. 117

UNION CENT. LIFE INS. CO. v. CHOWNING.

Court of Civil Appeals of Texas.

October 3, 1894.

Appeal from district court, Dallas county; A. S. Lathrop, Special Judge.

Action by Sallie L. Chowning against the Union Central Life Insurance Company to recover upon a life insurance policy in which plaintiff is the beneficiary. From a judgment entered upon a verdict in favor of plaintiff, defendant appeals. Reversed.

This is a suit upon a life insurance policy for $5,000, issued by appellant company upon the life of John T. Chowning, his wife, Sallie L. Chowning, being named as the beneficiary therein. The case was tried by a jury, and resulted in a verdict and judgment in favor of appellee for $6,971.11. From this judgment the insurance company has appealed, and assigned errors as ground for reversal of the judgment. The policy sued upon was an ordinary life insurance policy, executed by the proper officers of the defendant company, to wit, its president and secretary, numbered 54,174, and dated September 21, 1888, whereby it undertook, in consideration of the statements in the application for the policy, and of the payment of the sum of $295.45 at the home office of the company on or before September 15th in every year, during the term of 10 years from the date hereof, to insure the life of John T. Chowning, of Dallas, Dallas county, Tex., in the sum of $5,000, for the term of his natural life, or until prior maturity, for the benefit of the insured, if living at the maturity of the policy. In case of the death of the insured prior to such maturity, the amount of the insurance was made payable to the plaintiff, Mrs. Sallie L. Chowning, wife of insured, if living; otherwise, to his executors, administrators, or assigns. It further undertook to pay to the insured the amount of said insurance whenever the premiums paid on the policy and its equitable proportion of the company's profits combined, less its share of losses and expenses, should equal the amount of the policy. It was further stipulated that, in case of the death of the insured prior to the maturity of the policy, the same being in force, the company should pay the amount of the policy within 60 days after the receipt of notice and satisfactory proof of death; the balance of the year's premium, if any, and all other indebtedness to the company being first deducted. The actual age of the insured was 33 years, but his "office age" was stated to be 40 years. The policy purported to be issued and accepted on certain conditions and agreements, indorsed thereon, which were made part of the contract, of which the first, sixth, and eighth read as follows, to wit: "(1) This policy shall not be valid or binding until the first premium is paid to the company or its authorized agent, and the receipt hereto attached countersigned by the company's agent, and delivered during the lifetime of the insured; and all premiums or notes, or interest upon notes, given the company for premiums, shall be paid on or before the days upon which they become due, at the company's office in Cincinnati, or to the authorized agent of the company, he producing a receipt therefor, signed by the president, vice president, or secretary." "(6) Upon the violation of any of the foregoing conditions, this policy shall be null and void, without action on the part of the company or notice to the insured or beneficiary; and all payments made thereon and all accrued surplus or profits shall be forfeited to the company, except as provided in the foregoing 5th paragraph." (Said fifth paragraph has no pertinency to this case.) "(8) The contract of insurance between the parties hereto is completely set forth in this policy and the application for the same; and none of its terms can be modified, nor any forfeiture under it waived, save by an agreement in writing, signed by the president or secretary of the company, whose authority for this purpose shall not be delegated." The policy has indorsed upon it a copy of the original application for insurance. This is dated Dallas, May 29, 1888; signed by John T. Chowning, and Sallie L. Chowning, per John T. Chowning; witness, W. W. Hayward, agent. The application is for $5,000 on the 10 annual payment system, etc., premium payable annually. Age of applicant at nearest birthday was given as 32 years. In answer to question 9 in the application, "How much, if any, of the premium has been paid in advance?" the written answer is as follows: "Settled for." The following receipt was delivered to the insured at the same time with the policy, the formal parts of the same being printed:

"Premium $295.45. Union Central Insurance Company, Cincinnati, Chio. Received two hundred ninety-five and 45-100 dollars, being the first premium upon policy No. 54,184, issued upon the life of John T. Chowning, continuing said policy in force to the 15th day of September, 1889, at noon. This receipt is not valid unless paid, countersigned, and dated the day of payment by ____, agent. E. P. Marshall, Secretary.

"Paid at Dallas, Texas, this 25th day of Sept. 1888. Johnson & Pattison, Agents.

"Agents are not authorized to grant permits, make or alter contracts, or waive forfeitures."

The petition declared upon the policy in the usual form of allegations, alleging payment of premium, full compliance with all the terms of the policy, the death of the assured, etc. The insurance company, answering, alleged that no premium was paid at the time of the issuance and delivery of the policy, but that the assured executed notes for such premium. The terms and conditions of the policy with reference to the payment of premium, a failure to pay the premium notes, and a consequent forfeiture of the policy, were also fully alleged in avoidance of liability upon the policy. Plaintiff replied to the answer of defendant by supplemental petition, alleging, in substance, the following matters: (1) An agreement made between the insurance company and the assured, contemporaneous with the execution of the premium notes and issuance of the policy, by the terms of which payment of the notes was to be extended until they should be extinguished by commissions to be earned by the assured and his partner, Reeves, in securing applications for loans of money to be made to the insurance company; the details of the agreement being fully set out. (2) A waiver by the insurance company of the condition of forfeiture; the acts alleged as constituting the waiver being pleaded. (3) Estoppel against the claim of forfeiture, by reason of the insurance company's course of dealing with the assured and other policy holders, which induced the assured and the plaintiff to believe that such forfeiture would not be insisted upon. The appellant excepted generally and specially to the lastnamed pleading, and denied the truth of the facts set forth. The exceptions were overruled by the court, and upon this state of pleadings the case was tried. The uncontradicted testimony showed that no money was paid as premium upon the policy at the time of its issuance; that three notes were given for the premium money, in equal amounts, and due at different dates; that neither of these notes was paid; that, after two of the notes became past due, a new note was executed in lieu of the past-due notes, the time of payment extended, and the policy continued in force by the insurance company; that the new note and the other of the original three notes fell due before the death of the assured, and neither of them was paid. Each of the notes expressed the purpose for which it was given, and contained the following, among other, provisions: "Said policy, including all conditions therein for surrender, shall, without notice to any party or parties interested therein, be null and void on the failure to pay this note at maturity, with interest at eight per cent. per annum, payable annually. In case this note is not paid at maturity, the full amount of premium shall be considered earned and payable, without reviving the policy." Upon the face of such notes was printed the following: "Agents are not authorized to make any contract, verbal or written, differing from that written and printed on the face of this note; nor are they permitted to collect any part of the same, unless indorsed to them for that purpose."

Bassett, Seay & Muse, for appellant. Leake, Shepard & Miller, for appellee.

FINLEY, J. (after stating the facts).

It would be tedious and unnecessary to take up all the assignments of error upon which this case is presented to this court, and consider them separately. The same questions are raised in different forms and at different stages of the pleadings; and it is deemed sufficient to announce the law upon the propositions involved, without going through the detailed proceedings of the trial and applying them.

The policy of insurance and the notes given for the premiums thereon, being executed contemporaneously, and relating to the same parties and same subject-matter, are parts of the same contract, and should be considered as such in ascertaining the terms of the contract. Thus considered, the contract of insurance clearly provides that a failure to pay the premium notes when due shall render the policy null and void, without notice to the parties interested or other action on the part of the insurance company, and the full amount of the unpaid annual premium shall be considered earned. Under such stipulations, a failure to pay the premium note when due renders the policy void, without any formal cancellation of the policy. No liability against the company issuing the policy exists, and a recovery thereon cannot be had, unless it be shown that the provision of forfeiture contained in the contract has been waived, or that the policy was reinstated after forfeiture. Insurance Co. v. Le Pert, 52 Tex. 504; Cohen v. Insurance Co., 67 Tex. 325, 3 S. W. 296; Assurance Soc. v. McLennan, 6 Ins. Law J. 124; Heim v. Insurance Co., 7...