Universal Life & Accident Ins. Co. v. Shaw

• Decision Date: 10 June 1942
• Docket Number: No. 7906.,7906.
• Citation: 163 S.W.2d 376
• Parties: UNIVERSAL LIFE & ACCIDENT INS. CO. v. SHAW.
• Court: Texas Supreme Court

Page 376

163 S.W.2d 376

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

No. 7906.

Supreme Court of Texas.

June 10, 1942.

Rehearing Denied July 15, 1942.

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

Action by Charlie Shaw against the Universal Life & Accident Insurance Company, to recover the amount of weekly benefits alleged to have accrued prior to institution of action under provisions of an insurance policy issued by defendant to plaintiff. Judgment for defendant was reversed and rendered by the Court of Civil Appeals, 153 S.W.2d 203, and defendant brings error.

Judgments of the Court of Civil Appeals and of the district court reversed, and cause remanded to district court with instructions.

See, also, Tex.Civ.App., 123 S.W.2d 738.

Storey, Sanders, Sherrill & Armstrong, of Dallas, for plaintiff in error.

Clifford Craig, of Dallas, for defendant in error.

SHARP, Justice.

This suit was brought by Charlie Shaw, a feme sole, against the Universal Life & Accident Insurance Company, a corporation, to recover sick benefits alleged to be due under the provisions of an insurance policy issued to her by defendant in 1928, but which the insurer wrongfully cancelled in 1931, while the policy was in full force and effect. The case was tried to a jury, and its verdict was favorable to plaintiff. However, upon motion of defendant, the trial court rendered judgment for defendant and that plaintiff take nothing by her suit, notwithstanding the verdict of the jury. Upon appeal by plaintiff, the Court of Civil Appeals reversed the judgment of the trial court and rendered judgment for the plaintiff. 153 S.W.2d 203, 204. Defendant's application for writ of error was granted upon the question whether or not plaintiff's cause of action was barred by the statutes of limitation.

The following statement from the opinion of the Court of Civil Appeals is made: "The applicable provisions of the policy are that: `In consideration of the payment in advance of the premium stated in the Schedule below (35¢ per week), on or before each and every Monday, * * * eighty per cent (80%) of which is for insurance against disability from sickness or accident, The Universal Life and Accident Insurance Company hereby agrees, subject to the conditions herein, to pay to the Insured (an endowment after the insured passes 69 years of age) * * * and in case of disability prior thereto from sickness or accident, to pay to the Insured the weekly benefits named in the Schedule below ($7), and otherwise provided herein, according to the terms hereof.' Among other conditions, it is provided that, `* * * except as otherwise expressly provided herein, this Policy shall become void if the weekly premiums shall not be paid according to the terms hereof. * * * Benefits will be paid for each day that the Insured is by reason of illness necessarily confined to bed and * * * disabled from performing work of any nature, * * *. The total number of days for which benefits will be paid is limited to one hundred and eighty-two (182) days during any twelve consecutive months. After expiration of payment of 182 days benefits, the Company will continue this policy in full force and effect (provided total disability continues) until the next claim drawing date. Benefits under this clause will be paid each seven days, except when payment is for less than one week, then payment will be made at the rate of one-seventh of the weekly benefits for each day.' The paragraph relating to cancellation, in part, reads: `Except within the contestable period, and then only for material misrepresentation in the application herefor, the Company will have no right to cancel the life insurance herein granted, except for nonpayment of premiums. * * * Such cancellation * * * shall be without prejudice to any claim originating prior thereto.'"

The jury found: (1) That in July, 1931, an employee of the Insurance Company took from Charlie Shaw the policy in question; (2) that at that time she was confined to her bed, and was in that condition for a period of four years and ten months; (3) that all premiums on the policy had been paid to November 2, 1931; (4) that the Insurance Company's manager denied liability on the policy in August, 1931, and thereafter refused to accept premiums from Charlie Shaw or to pay the accrued or accruing weekly benefits; and (5) that the Insurance Company denied liability on the policy.

The policy provided that the premiums should be paid weekly, and in advance. All premiums due under the policy were paid to November 2, 1931; but no premium was thereafter paid. The policy also provided that, in the event the insured became sick and confined to her bed under the care of a physician, the insurer would pay her sick benefits of $7 per week during such illness, not to exceed 26 weeks; but during that time she would be required to pay the weekly premiums. If the illness continued beyond that period and for the remaining 26 weeks of that year, she would not receive any benefits, but would not be required to pay the weekly premiums. Should the illness continue during the second year, she would again be paid $7 per week for the first 26 weeks, but would be required to pay the weekly premiums during that time; and for the remaining 26 weeks she would not receive any benefits, but would not be required to pay the premiums. This procedure would continue year after year, so long as she was sick and confined to her bed under the care of a physician. Plaintiff became sick in May, 1930, and since then has been confined to her bed under the care of a physician. She alleges that, due to two operations, she became totally and permanently disabled in May, 1932, and will be confined to her bed under the care of a physician during the remainder of her life.

In compliance with the provisions of the policy, the insurer paid to plaintiff the weekly benefits of $7 each week for 26 weeks, beginning May 22, 1930, and for about six weeks, beginning May 22, 1931; but since then has refused to make any further payments. Plaintiff alleges that defendant failed and refused to furnish her with sick blanks, to be filled out by her physician, and failed and refused to pay her any benefits other than those above mentioned; that while the policy was in full force and effect, with premiums paid for three months in advance, an agent of the insurer, by authority of J. O. McDonald, its local District Manager, came to her house while she was sick in bed, and without her permission or consent took from her possession the insurance policy and her receipt book; that shortly thereafter she talked with McDonald over the telephone, and was told by him that the Company had taken up her policy for the purpose of cancelling it, that the policy had been cancelled, and that the Company had repudiated its contract with her and would not thereafter consider itself liable to pay her anything under it, and that the Company would refuse to accept any premiums if tendered by her, and that she need not thereafter make any such tender. Nothing has since been paid to plaintiff, nor has she since tendered any premiums. The jury found that the conversation between McDonald and plaintiff occurred in August, 1931. This suit was filed September 2, 1936, or more than four years after plaintiff was informed that the policy had been cancelled and that the insurer had repudiated its contract with her. Except for the filing of a suit in 1935, which was dismissed for want of prosecution, plaintiff did nothing after August, 1931, until the filing of this suit. She made no further attempt to pay premiums; made no demand upon the Company for sick benefits; made no complaint that the Company had wrongfully cancelled the policy; and made no effort to inform the Company that she considered the...