American Standard Life Ins. Co. v. Denwitty

On Motion for Rehearing.

DIXON, Chief Justice.

In this motion appellees say “There is no decision holding that it was necessary that Martha have knowledge or relied upon the course of dealing by the company with other policyholders. It would be impossible to have a waiver or estoppel in favor of any one policyholder unless proof should be made of such a course of dealing with other policyholders-. The Court is clearly wrong in its holding as above stated.”

A sufficient answer to this argument is found in Southland Life Ins. Co. v. Lawson, 137 Tex. 399, 153 S.W.2d 953, 957, 136 A.L.R. 1212: “In regard to such matter, we think the rule is that waiver by custom does not change the original contract. It merely operates to estop the company from asserting its rights thereunder. The doctrine of waiver in such instances is only another name for the doctrine of estoppel. It can only be invoked where the conduct of the insurance company has been such as to induce action! in reliance upon it, and where it would operate as a fraud on the insured, or an injustice to him, if the company were allowed afterwards to disavow its waiver and enforce the policy conditions.” (Emphasis ours.) “Existence of custom, if any, of insurer, in not insisting on forfeiture clause, does not constitute a waiver as to insured who did not know of custom. Farmers’ & Mechanics’ Benev. Fire Ins. Ass’n of Roanoke and Botetourt Counties v. Horton, 157 Va. 114, 160 S.E. 315.” 45 C.J.S., Insurance, § 712, p. 682, Note 17. See also 29 Am.Jur., p. 658.

Appellees present additional authorities on counterpoint 1 that the Insurance Company, having a clear and adequate remedy at law, is precluded from proceeding by bill of review to set aside the questioned judgment by default. The point so labored is deemed untenable on several grounds: (1) Appellees have waived any right to ' claim that appellant, having an adequate remedy at law (writ of error), was not entitled to pursue an equitable remedy by way of bill of review. The point was not raised until by motion to dismiss appeal in this Court. It is not maintainable unless timely asserted, i.e., prior to a hearing of the bill on its merits. 17 Tex.Jur., p. 11; Rivers v. Campbell, 51 Tex.Civ.App. 103, 111 S.W. 190, (writ ref.); Rogers v. Driscoll, 59 Tex.Civ.App. 415, 125 S.W. 599.

(2) The default judgment herein recites that defendant had been “duly served with citation”; in view of which the rule is inapplicable that “An appeal or writ of error is an appropriate remedy by which to procure the reversal of a judgment for an error of law apparent upon the face of the record.’1 (Emphasis ours.) 3-A Tex.Jur., sec. 12, p. 15; Pearl Assur. Co. Ltd. v. Williams, Tex.Civ.App., 167 S.W.2d 808, syl. 7.

(3) In Bennett v. Carter, Tex.Civ.App., 102 S.W.2d 450, 451, under similar facts, a like contention was overruled. It was there held through Chief Justice Jones of this Court: “The petition also shows that, at the time it was filed, appellee had the legal remedy of having this judgment reviewed on its record by writ of error and, of course, the judgment could have been superseded pending a decision on the writ of error appeal. Was this an adequate legal remedy? The very statement of the condition confronting appellee at the time shows that it was not. The gist of appel-lee’s complaint in his petition for a bill of *870review is that, without any dereliction on his part, he had been denied the right to make a valid defense to appellant’s suit. This defense could not be made on any appeal on the record, granting the default judgment. It could only be made on a trial de novo in the same court, and this trial could not be had until the original judgment was set aside. Had appellee availed himself of the writ of error, he still would be denied his day in court. It is generally held in this state that the legal remedy of appeal on a default judgment is not an adequate remedy.” (Citing authorities.)

Appellees’ motion for rehearing, after due consideration, is accordingly overruled.