Washington Nat. Ins. Co. v. Shaw

• Citation: 180 S.W.2d 1003
• Decision Date: 09 March 1944
• Docket Number: No. 2585.,2585.
• Parties: WASHINGTON NAT. INS. CO. v. SHAW et al.
• Court: Court of Appeals of Texas

Page 1003

180 S.W.2d 1003

WASHINGTON NAT. INS. CO. v. SHAW et al.

No. 2585.

Court of Civil Appeals of Texas. Waco.

March 9, 1944.

Rehearing Denied May 25, 1944.

Appeal from District Court, Falls County; Terry Dickens, Judge.

Action by Charles Shaw and another, doing business as Shaw-Robertson Funeral Home of Marlin, Tex., against the Washington National Insurance Company on a life policy. From a judgment for plaintiffs, defendant appeals.

Reversed and rendered.

Bryan & Maxwell, of Waco, for appellant.

Cecil R. Glass, of Marlin, for appellees.

HALE, Justice.

Charles Shaw and W. K. Robertson, doing business as Shaw-Robertson Funeral Home of Marlin, Texas, sued Washington National Insurance Company for recovery under a policy of insurance on the life of Ruth Jackson. The case was tried before the court without a jury and resulted in judgment for plaintiffs in the sum of $300 as principal, $36 as statutory penalty, and $100 attorney's fees. Defendant has appealed and says the judgment should be reversed and here rendered in its favor because (1) the policy sued upon is a California contract and (2) under the laws of California and the undisputed evidence in the case the defendant is not liable on the contract.

Appellant is and was at all times material to this suit an Illinois corporation doing business as an insurance company in the state of Texas under a license and permit issued to it by virtue of the laws of Texas. Appellees are resident citizens of Marlin, Texas. On August 26, 1938, Ruth Jackson made written application in Los Angeles, California to appellant for a policy of insurance on her life in the amount of $300 at a premium rate of $.20 per week with her mother, Lucy Smith, to be designated as beneficiary. On September 5, 1938, appellant issued the policy applied for and delivered the same to the insured in Los Angeles. The policy lapsed on March 5, 1940 for nonpayment of premiums which became due on and after February 5, 1940. The insured made written application in Los Angeles on March 30, 1940 for the reinstatement of her lapsed policy and on April 8, 1940 appellant approved such application and revived the policy. On August 15, 1940, the beneficiary was changed from Lucy Smith to R. V. Smith. The insured died in Los Angeles on February 12, 1941. R. V. Smith, as beneficiary, then assigned the policy to appellees. The insured was a resident citizen of California at all times material to this suit and all premiums on the policy were paid by her in that state. Lucy Smith and R. V. Smith were resident citizens of Marlin, Texas, at all material times, although there was no evidence tending to show that appellant knew or was charged with notice of the residence of either at any time prior to the death of the insured.

Appellant says under the foregoing facts its liability if any, must be determined by the laws of California and not by the laws of Texas. In support of such contention it relies upon the following authorities: Pacific Mut. Life Ins. Co. of California v. Hale, Tex.Civ.App., 267 S.W. 282, error refused; Trinity Universal Ins. Co. v. De Martini, Tex.Civ.App., 118 S.W.2d 901, error refused; Ætna Life Ins. Co. v. Dunken, 266 U.S. 389, 45 S.Ct. 129, 69 L.Ed 342; Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., 292 U.S. 143, 54 S.Ct. 634, 78 L.Ed. 1178; John Hancock Mutual Life Ins. Co. v. Yates, 299 U.S. 178, 57 S.Ct. 129, 81 L.Ed. 106. On the other hand, appellees say appellant's liability must be determined by the laws of Texas and not by the laws of California. In support of such contention they rely upon the following authorities: Art. 5054, Vernon's Tex.Civ.Stats.; Metropolitan Life Ins. Co. v. Wann, 130 Tex. 400, 109 S.W.2d 470, 115 A.L.R. 1301; International Brotherhood of Boiler Makers, Iron Shipbuilders, and Helpers of America v. Huval, 140 Tex. 21, 166 S.W.2d 107; Boseman v. Connecticut General Life Ins. Co., 301 U.S. 196, 57 S.Ct. 686, 81 L.Ed. 1036, 110 A.L.R. 732.

It will be observed that no part of the transaction leading up to the consummation of the original contract, or to the reinstatement thereof, or to the maturity of any right accruing thereunder, occurred or transpired within the State of Texas. Under the terms of the policy the insured was given the right to have the beneficiary changed at any time upon request, irrespective of the place of residence of such beneficiary. Clearly, the contract was not in fact made or entered into with reference to the laws of Texas or because of any Texas license or permit issued to appellant. Consequently, we do not think the provisions of Art. 5054 of Vernon's Tex.Civ.Stats. require or authorize the courts to hold that the contract sued upon was in legal contemplation made and entered into under and by virtue of the laws of Texas relating to insurance merely because appellant was in fact doing other business as an insurance company within this state, even though the proceeds from the policy were to become payable to some person whose residence might be within this state. After carefully considering the undisputed evidence in the light of the authorities cited by the respective parties, we have concluded that the validity, interpretation and obligations of the contract in suit must be determined and controlled by the laws of California and not by the laws of Texas, insofar as the laws of the former state may be shown to be different from the laws of the latter. See also: Seiders v. Merchants' Life Ass'n, 93 Tex. 194, 54 S.W. 753; Allgeyer v. State of Louisiana, 165 U.S. 578, 17 S.Ct. 427, 41 L.Ed. 832; New York Life Ins. Co. v. Head, 234 U.S. 149, 34 S.Ct. 879, 58 L.Ed. 1259.

Under appropriate pleadings appellant made proper proof of the statutory laws of the state of California relating to contracts of insurance and of the holdings of the courts with respect thereto in the following cases: Dibble v. Reliance Life Ins. Co. of Pittsburg, Pa., 170 Cal. 199, 149 P. 171, Ann.Cas.1917E, 34; Combs v. Burbank Mut. Life & Benefit Ass'n, 140 Cal. App. 139, 35 P.2d 132; New York Life Ins. Co. v. Waterman, 9 Cir., 104 F.2d 990. Ruth Jackson stated in her original application that her age at next birthday was twenty-five years, that she had not had any illness during the past five years and she agreed therein that any misrepresentation wilfully made in the application should render the policy applied for void and that such policy should not be binding upon the Company unless she was in sound health upon the date of such policy. The policy as issued provided, among other things, that if the insured was not in sound health on the date thereof, or if the insured had, within two years before the date thereof, been attended by a physician for any serious disease or complaint, the liability of the Company should be limited to the return of any premiums paid thereon; that a grace period of four weeks should be granted for the payment of every premium after the first and if the policy should become void in consequence of nonpayment of premiums, it might be revived upon payment of all arrears and the presentation of evidence satisfactory to the Company of the sound health of the insured; and that the policy should be incontestable except for nonpayment of premiums after it had been in force, during the lifetime of the insured, for a period of two years from the date of its issue. The insured stated under date of March 30, 1940 in her application for the reinstatement of her lapsed policy that she was then in sound health, had not been sick or afflicted with any disease and had not consulted any physician since the policy lapsed and that she had no illness during the past three years. She agreed therein that no liability should exist on the part of the Company under the lapsed policy unless and until the Company should approve the application for its reinstatement and that the revival should be deemed to be based upon the...