Life Insurance Co. of the Southwest v. Overstreet

HUGHES, Justice,

dissenting.

I respectfully dissent.

The basis of the majority’s opinion is that this policy is distinguishable from those in Peddy and Vela because it is not clearly provided that the stated effective date was to control over the date on which coverage became effective for the calculation of premium due dates, grace periods, and the like under the policy. I cannot agree for two reasons.

First, in my opinion, as a matter of law where an effective date is expressly stated in a policy it controls. Effective dates are necessary for the many calculations which a policy of insurance requires. Further, expressly specifying an effective date is intended to benefit the insured by informing that person of the exact dates upon which the premium obligations fall. While it may be possible for the parties to an insurance contract to agree differently, I conclude that, without proving a different agreement, or where the contract is silent, the *934stated effective date controls over the date coverage became effective, should the dates be different.

Second, after reviewing the record I conclude that the evidence established as a matter of law that premiums were due each March 15th during the life of the policy. While I agree with the majority that the policy in this case could and should have been more clearly drafted, only one reasonable conclusion can result from an examination of the terms of the policy and other evidence. That conclusion is that the first and subsequent premiums were due March 15th.

The policy stated that the first premium was payable on the effective date. The effective date stated was March 15, 1972. It also provided that payment of an annual premium would keep the policy in force for one year. It is this language which the majority finds conflicting. However, the policy goes on to provide as follows:

“Such periods (periods of coverage for premium paid, here one year) will be deemed to expire and the next premium shall fall due on the same day of the month on which the first premium is due.”

While I agree that this language is not as clear as the policies in Peddy and Vela, I cannot agree that it was shown to be conflicting. Rather, the evidence established as a matter of law that March 15th was the due date for the annual premiums under the policy.

I would, therefore, reverse the judgment of the trial court and render judgment that appellee take nothing.