Pope v. American National Insurance Co. , 1969 Tex. App. LEXIS 1937 ( 1969 )

DUNAGAN, Chief Justice.

This is a suit on a credit life insurance policy. Appellant Robert B. Pope, individually and as independent executor of the estate of Annell Bulloch Pope, deceased, instituted this suit against American National Life Insurance Company and the Southside State Bank in Tyler, Texas, to recover on the credit life insurance policy taken out on Annell Bulloch Pope, which was in the principal sum of $4,986.00. Appellees in their answer, among other things, contend that the loan was a renewal or refinancing of the GMAC loan and the appellant was not entitled to recover by the express provisions of Article 3.53, Section 5 of the Insurance Code, V.A.T.S. Appellees further contend that the credit life insurance policy Issued requires that the debtor must be gainfully employed in order to be eligible for credit life insurance and that Annell Pope was not so employed and therefore was not eligible as a debtor to have a credit life policy issued to her, which fact bars plaintiff’s (appellant’s) recovery in this proceeding. The answer further shows that defendants have tendered into the Registry of the trial court the sum of $149.58, which was the amount of the premiums for credit life insurance on the life of Annell Pope.

The court entered a judgment that the plaintiff take nothing. The appellant has duly perfected his appeal to this Court

The stipulated facts are as follows:

1. Robert B. Pope is the son of Annell Bulloch Pope and the duly appointed and active Independent Executor of her Estate.

2. Southside State Bank of Tyler, Texas, is a banking corporation located in Tyler, Texas.

3. American National Insurance Company of Galveston, Texas, is a Texas corporation with headquarters in Galveston, Texas.

4.. Southside State Bank of Tyler, Texas, has had in force since 1964 with American National Insurance Company a contract under which the lives of certain creditors of the Southside State Bank are insured to the extent of the indebtedness due said bank, under the credit life plan.

5. On July 7, 1967, Robert B. Pope came to the Southside State Bank and requested of Joe E. Elliott, Jr., officer of said bank, an installment loan of $4,130.55 on behalf of Annell Bulloch Pope and Robert B. Pope and offered as security for said loan a 1967 Cadillac automobile, motor number B7198234, on which GMAC held a lien for the said amount. Joe E. Elliott, Jr. agreed to make said note. Robert B. Pope offered to take said note and papers and have Annell Bulloch Pope execute same or have Annell Bulloch Pope come to the bank to execute said papers; but he was informed by Joe E. Elliott, Jr. that it would be satisfactory if he would sign her name to said note and papers, which was done. At the time of the execution of said note, Robert B. Pope advised Joe E. Elliott, Jr., that they desired credit life insurance on the life of Annell Bulloch Pope for the amount of said note and $149.58 was added to the principal of said note for the premium of the credit life insurance on An-nell Bulloch Pope, along with $705.87 as interest on said note. At the time, Joe E. Elliott, Jr. did not advise Robert B. Pope that Southside State Bank and American National Insurance Corporation had a policy of not insuring a person who was not gainfully employed. Annell Bulloch Pope was not gainfully employed.

6. After the note was executed, Robert B. Pope requested Joe E. Elliott, Jr. to call GMAC and direct them to draw a draft with title papers attached thereto on South-side State Bank in the amount of $4,130.55, which was the balance to GMAC. The draft was drawn on July 7, 1967, and was presented and paid on July 11, 1967, by Southside State Bank out of the proceeds of the above mentioned note.

7. Annell Bulloch Pope died on July 9, 1967, but no officer of Southside State Bank was aware of this fact until after the above mentioned draft was paid.

8. The title to said automobile is in the name of Mrs. Irvin Pope, Jr., being the same person as Annell Bulloch Pope.

9. Prior to July 7, 1967, Robert B. Pope had credit life insurance on his life to the extent of the indebtedness due GMAC on the note secured by said automobile. On July 13, 1967, GMAC cancelled said insurance.

10. Prior to the actual issuance of a credit life policy on the life of Annell Bul-loch Pope, the officers of Southside State Bank learned of her death and therefore such a policy was never issued.

The court made findings of fact and conclusions of law which are a part of the record before us. The court’s findings of fact were identical with the stipulations with the exception of reference therein to certain instruments attached thereto. The court concluded as a matter of law that the stipulated facts in this case “establish a renewal or refinancing of the indebtedness in question prior to the scheduled maturity date as contemplated by Section 5 of Article 3.53 of the Insurance Code of Texas and, therefore, the issuance of a new policy of credit life insurance could not be issued or become effective until the credit life insurance then in effect covering said indebtedness be terminated as provided by the above quoted statute.”

The record reveals that on August 26, 1964, the appellee insurance company delivered a master group credit life insurance contract to appellee bank which, among other things, provided under the heading of “Eligible Debtors”:

“All persons of the class defined in the application for this policy, over the age of eighteen (18) years and under the age of sixty-six (66) years at the time of becoming indebted to the Creditor, who are liable, directly or indirectly, to pay or repay sums of money to the Creditor over a period not to exceed Sixty (60) months and who are gainfully employed and agree to pay the required premium contribution to the creditor, shall be eligible for insurance hereunder, provided that no insurance is granted hereunder with respect to any partnership, corporation or association and in the case of more than one debtor on the same debt, the first named debtor only shall be eligible for insurance. For the purpose of this policy, debtors of the following subsidiaries and affiliates of the Creditor shall be considered as debtors of the Creditor:” (Emphasis supplied.).

Section 6 of Article 3.53 of the Insurance Code, as amended, in part provides:

“ * * * A. All credit life insurance and credit accident and health insurance shall be evidenced by an individual policy, or in the case of group insurance by a certificate of insurance, which individual policy or group certificate of insurance shall be delivered to the debtor.” (Emphasis supplied.)

Even though a certificate evidencing group insurance coverage as provided by Section 6 of Article 3.53 of the Insurance Code was never issued, the bank did accept an application of the debtor, Mrs. Annell Pope, for such coverage and included the sum of $149.58 in the principal sum of her note to cover payment of the premiums therefor, which sum as above stated was tendered into the Registry of the trial court. We do not find in the record a copy of an application of Mrs. Pope for credit life insurance coverage under the master group policy. However, on oral argument it was admitted by counsel for all parties that such an application was made and that the application form found in the transcript was identical with the one executed by Mrs. Pope.

The certificate of group insurance coverage applied for by Mrs. Pope provides therein that “THIS IS TO CERTIFY that the above-named debtor is insured under the provisions of the above indicated Group Life Insurance Policy, subject to all its terms, conditions, limitations and exceptions, issued by AMERICAN NATIONAL INSURANCE COMPANY of Galveston, Texas (herein called the Company) to the above-named creditor (Southside State Bank).”

The policy contained an express insuring condition that to be an “eligible debtor,” one must be gainfully employed. This condition is plain and unambiguous and must be enforced according to its terms. The Ohio Oil Company v. Smith, 365 S.W.2d 621 (S.Ct., 1963); Scott v. Industrial Life Insurnce Company, 411 S.W.2d 769, 773 (Tex.Civ.App., Dallas, 1967, n. w. h.); Republic National Life Insurance Company v. Spillars, 368 S.W.2d 92, 5 A.L.R.3d 957 (S.Ct., 1963); Reliable Life Insurance Company v. Steptoe, 435 S.W.2d 630 (Tex.Civ.App., Tyler, 1968, n. w. h.). The parties stipulated that Mrs. Popé was not gainfully employed and the court so found. In view of this stipulation and the court’s finding, it is clear that Mrs. Pope was not an “eligible debtor” within the provisions and terms of the master group policy herein involved, and therefore, she did not come within the coverage of said policy. To be eligible for insurance under the master group policy, it was required that Mrs. Pope should be gainfully employed.

In view of our disposition of this case, we do not reach the question of whether or not the facts as presented establish a renewal or refinancing of the indebtedness of the Popes to GMAC and therefore constituted a violation of Section 5 of Article 3.53 of the Insurance Code of Texas as amended.

Under the pleadings and evidence, we think the trial court rendered the proper judgment.

Judgment affirmed.

MOORE, J., not participating.