National Life & Accident Ins. Co. v. Casillas

SMITH, Justice.

This is an action to recover upon a life and accident insurance policy issued to Alfred Casillas by the National Life & Accident Insurance Company for the benefit of Casillas’ sister, Maria. Casillas was killed on May 7, 1931.

The policy sued on was classified as a “month-to-month life and accident” policy as distinguished from the usual life policy. This distinction is made in our statutes which provide that a grace period of thirty days shall be allowed for the payment of premiums upon purely life policies, but relieve life and accident policies from such requirement. Hatton v. Ins. Co. (Tex. Civ. App.) 10 S.W.(2d) 239.

The policy in question provided that the premium (of $1.75) should be “due on the first day of each month, in advance,” and that “if any premium is not paid on or before due date, the policy lapses and the insurance is void, until the . policy is revived and reinstated.” The effect of this provision, and other related provisions, is that if the monthly premium be not paid on or before the due date the policy is thereby automatically suspended from operation until the premium is actually paid, and if during such period of suspense the insured is injured or killed he, in the first instance, or the beneficiary in the second, cannot recover. The provision is common to all such policies, is simple, and has been universally upheld.

Appellee’s right of recovery in this case depends upon the fact of whether, or not the premium upon this policy was paid for the month of May, 1931, before the insured lost his life on the 7th day of that month. The jury found that they did “not find from a preponderance of the evidence” that said premium “was not paid prior” to May 7th. Unless the evidence conclusively showed, affirmatively, that said premium was not paid, then the verdict and judgment must stand. We conclude that such showing was made.

The insurer furnished the insured with a “premium receipt book,” in which, as each monthly premium was paid, notation thereof was made by the collecting agent, showing the date and amount of the payment, the month for which paid, and the agent’s receipt therefor indicated' opposite each payment. Such receipt book was kept by the insured in this case and was put in evidence by appellee upon the trial. This book showed payment'on September 16, 1930, of the October premium, but no payment in or for *397October. It showed payments on November 4 for November; on December 5 for December; on January S for January; no payment for February; on March 3 for March; on April 7 for April; none in or for May. No further payments were shown in the book, but appellee introduced a separate receipt from one of appellant’s agents for the amount of one month’s premium, dated “10-1-30,” which was shown to have been applied by appellant in payment of the February premium, not otherwise shown to have been paid. This application was consistent with and supplied a patent omission, from appellee’s receipt book, of the receipt for the February premium. The effect, then, of appellee’s own proof was to show that no premium was paid for the month of May, on the 7th day of which the insured lost his life. Moreover, appellee herself in effect admitted the failure to pay the May premium by repeatedly tendering the amount thereof to appellant, and into the registry of the court, shortly after the filing of the suit. The fact was finally made conclusive by the records of appellant, which showed no such payment, and by the testimony of two of appellant’s agents whose duties embraced such matters, that the May premium was not paid. One of these witnesses, the collector having charge of this account, testified that he called upon the insured for that payment, once on May 1st and again on May 5, but without success, and the insured dying on May 7, the premium was never paid. The ultimate result is, therefore, that the uncontroverted testimony of both appellee and appellant shows, affirmatively and conclusively, that the May premium was not paid, and as the insured lost his life after the policy was thus suspended by nonpayment of premium, and during the period of such suspense, there could be no recovery.

Appellee urged a plea of waiver in the court below, but does not seriously urge it on appeal. It was alleged in support of that plea that because appellant repeatedly accepted premiums tendered by the insured after the first day of the month, its due date, it waived the right to defend on the ground that the May payment had not been made at the time the insured lost his life. It is true that appellant did repeatedly accept belated IKiyments. But such acceptance amounted merely to a reinstatement of the policy for the remainder of the month for which each premium was paid, to cover casualties occurring thereafter during that period. Donaldson v. Ins. Co. (Tex. Civ. App.) 53 S.W.(2d) 136; National Life & Accident Ins. Co. v. Reams (Tex. Civ. App.) 197 S. W. 332. The policy belongs to that class known as “month-to-month” policies, which expire at the end of each month, unless renewed by payment of the premium for the ensuing month, subject always to be discontinued at the end of any month at the option of either party to the contract. The insured is under no obligation to pay the monthly renewal premium, and by refraining from such payment may drop the policy at the end of any month. And the insurer is under no obligation (1) to continue the policy in force beyond any current month, and cannot be held to a continuance thereof unless it receives and accepts the premium therefor on or before the due date; or (2) to reinstate the policy after lapse on default unless and until it receives and accepts the premium therefor.

The judgment must be reversed, and as the case seems to have been fully developed into a state of undisputed facts, judgment will be here rendered for appellant, at the cost of appellee.