Universal Life & Accident Ins. Co. v. Johnson

• Decision Date: 23 September 1938
• Docket Number: No. 1831.,1831.
• Citation: Universal Life & Accident Ins. Co. v. Johnson, 120 S.W.2d 314 (Tex. App. 1938)
• Court: Texas Court of Appeals
• Parties: UNIVERSAL LIFE & ACCIDENT INS. CO. v. JOHNSON.

120 S.W.2d 314

UNIVERSAL LIFE & ACCIDENT INS. CO. v. JOHNSON.

No. 1831.

Court of Civil Appeals of Texas. Eastland.

September 23, 1938.

Rehearing Denied October 14, 1938.

Appeal from Nolan County Court; Chas. W. Lewis, Judge.

Suit by Ada Johnson against the Universal Life & Accident Insurance Company to set aside a release of plaintiff's claim as beneficiary in an insurance policy upon the life of her deceased husband and to recover under the policy. Judgment for plaintiff, and defendant appeals.

Reversed and rendered.

Cox & Hayden, of Abilene, for appellant.

H. R. Bondies, of Sweetwater, for appellee.

FUNDERBURK, Justice.

In this suit, as its nature is disclosed by plaintiff's trial pleading (First Amended Original Petition), Ada Johnson, widow of Buck Johnson, deceased, sued Universal Life & Accident Insurance Company to set aside a release of her claim as beneficiary in an insurance policy upon the life of said Buck Johnson, in which she had been paid the sum of $11.90; and to recover the sum of $126, less said $11.90, due by the terms of said policy, together with penalty, attorney's fees, interest and costs.

The jury to whom the case was submitted on two special issues found by their verdict that (1) Stewart (agent for defendant) was not prompted by motives of good faith toward plaintiff in telling her that the defendant was not liable on the policy; (2) a reasonable attorney's fee was $250. From the judgment in accordance with said verdict the defendant has appealed.

The first question presented for our decision is whether under the undisputed evidence plaintiff's cause of action was barred by limitation. The applicable facts are that the settlement agreement, in writing, was executed October 16, 1931. Plaintiff's Original Petition, filed June 14, 1932, made no mention of such agreement. Her First Amended Original Petition, which alleged the settlement agreement, that it was induced by fraud, and prayed that "said release be set aside", was filed January 1, 1937. Plaintiff testified that she had discovered the alleged fraud before suit was filed.

The written instrument evidencing the settlement agreement was referred to in the pleadings of both parties as "a release". It clearly implies a release of plaintiff's cause of action on the policy of insurance. Under the allegations of plaintiff's amended pleading she was not entitled to recover on the policy unless and until she established that the release was not binding upon her. The only cause of action alleged in plaintiff's Original Petition was upon the policy of insurance. More than four and a half years later in her First Amended Original Petition she alleged for the first time a cause of action to set aside the release of the cause of action declared upon in the original pleading. The effect of alleging the existence of the release was to show that all along she had no cause of action on the policy except upon condition that the release be set aside. Deaton v. Rush, 113 Tex. 176, 252 S.W. 1025, and the other authorities hereinafter cited.

A release of a cause of action induced by fraud is not absolutely void but voidable. Unless and until canceled the release was effective to bar any recovery of the insurance. The suit must therefore be regarded as one primarily to set aside a settlement agreement releasing a cause of action on the policy of insurance. The rule is that limitation begins to run from the commission of the fraud, unless there be an estoppel tolling part of the time, in which case limitation runs from the time of the discovery of the fraud or the well known legal equivalent of such discovery, as we had occasion to discuss in Steele v. Glenn, Tex.Civ.App., 57 S.W.2d 908. The question of limitation here considered, and the conclusion we reach in regard to the same, is believed to be in accord with the rules and principles declared in Deaton v. Rush, supra, and other decisions as follows: Cleveland State Bank v. Gardner, Tex.Com.App., 286 S.W. 173; Chicago, T. & M. C. Ry. Co. v. Titterington, 84 Tex. 218, 19 S.W. 472, 31 Am.St. Rep. 39; Holt v. Love, Tex.Civ.App., 168 S.W. 1018; Lott v. Van Zandt et al., Tex. Civ.App., 107 S.W.2d 761; Neill v. Pure Oil Co., Tex.Civ.App., 101 S.W.2d 402, 404; McCook v. Amarada Pet. Corp., Tex.Civ. App., 93 S.W.2d 482; Owen v. Free et al., Tex.Civ.App., 85 S.W.2d 1090; Fuller v. Wright, Tex.Civ.App., 82 S.W.2d 179; Buchanan v. Davis, Tex.Civ.App., 43 S. W.2d 279; American Exchange Nat. Bank v. Keeley, Tex.Civ.App., 39 S.W.2d 929; Swindall v. Van School Dist., Tex.Civ. App., 37 S.W.2d 1094; Hensley v. Conway et al., Tex.Civ.App., 29 S.W.2d 416; Angelina County v. Bond, Tex.Civ.App., 16 S.W.2d 338; McCampbell v. Durst, 15 Tex.Civ.App. 522, 40 S.W. 315, 318.

The question of limitation is not wholly concluded, however, by the decision that plaintiff was under the necessity of procuring a cancellation of the release and that the cause of action for that purpose was not asserted in the suit until more than four years after discovery of the fraud. It still remains to consider whether, granting that the cause of action alleged in plaintiff's Original Petition was a different cause of action from the cause of action to...