Morris v. Ft. Worth Life Ins. Co.

HODGES, J.

This appeal is from the action of the court in sustaining a general demurrer to the plaintiff’s petition, of which the following is the substance: (

The plaintiff alleged that in July, 1914, he was approached hy two agents of the ap-pellee company and solicited to take out two policies of insurance of $5,000 each— one upon his own life, and the other upon the life of his wife. He informed the agents that he' had similar policies in another insurance company, that he owed a debt upon which he was paying the highest rate of interest allowed by law, and he did not feel financially able to incur any further obligations. The agents of1 the appellee company then and there represented to him that if he would cancel the policies he was then carrying in another life insurance company and take out insurance "in their company that company would make him a loan of $5,000 or $6,000, as he might prefer, upon the same security then held by the hank, and would charge him interest at the rate of 6 per cent, per annum. It is alleged that the agents were acting within the scope of their authority, and with the consent of the appellee company. Appellant thereupon, in consideration of the agreement to carry his loan then held by the bank at an interest rate of 6 per cent, per annum, canceled his insurance policies carried in the other company, and made application for insurance in the appellee company ;• and in due course of time a policy was issued and he executed his notes aggregating the sum of $373.84 for the payment of the premiums. Those notes were made payable to the agents representing the appellee company, but were really for the benefit of the appellee, and were taken in the name of the agents merely as a matter of form. The notes were delivered .to the company, and are now held by it. 1-Ie further alleges that he made application for the loan, and tendered the security agreed upon, to- which no objection, was made, but .the loan was refused upon the ground that it was not convenient for the appellee to make it at that time. He charges that he has been unable to make any sucb loan from the appellee; that the promise on the part of the agents to make such loan was fraudulent and made for the purpose of deceiving him into canceling the insurance held in another company and taking out insurance in the company represented by them. He asks that the note be canceled; he tenders the policy of insurance into court and asks that it be canceled, and prays for damages in the sum of $1,000.

Upon the refusal of the appellant to amend his petition the case was dismissed. All of the assignments of error presented in this appeal complain in different forms of that ruling of the court.

[1] The appellee justifies the action of the court in sustaining the general demurrer upon the ground that if the facts alleged be true and the appellee’s agents did promise to make to the appellant a loan upon his real estate at a reduced rate of interest, such promise, not appearing as a part of the written contract of insurance, was void because prohibited by article 4954 of the Revised Civil Statutes. That article is as follows (italics ours):

“No insurance company doing business in this state shall make or permit any distinction or discrimination in favor of individuals between insurants [the insured] of the same class and of equal expectation of life in the amount of, or payment of, premiums or rates charged for policies of life or endowment insurance, or in the dividends or other benefits payable thereon; nor shall any such company or agent thereof make any contract of insurance or agreement as to such contract other than as expressed in the policy issued thereon; nor shall any such company, or any officer, agent, solicitor or representative thereof, pay, allow or give, or offer to pay, allow or give, directly or indirectly, as an inducement to insurance, any rebate or premiums payable on the policy, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any paid employment or contract for service of any kind, or any valuable consideration or inducement whatever not specified in the policy contract of insurance; or give, sell or purchase, or offer to give, sell or purchase, as an inducement to instiranee, or in eomieotion therewith, any stocks, bonds or other securities of any insurasice x company or other corporation, association or ' partnership, or any dividends or profits to accrue thereon, or anything of value whatsoever not specified in Hie policy, or issue any policy; containing: any special or board contract or similar provision, by the terms of which said policy will share or participate in any special fund derived from a tax or a charge against any portion of the premium on any other policy,” etc.

The appellant replies by saying that the agreement relied on does not come within the terms of the statute, and for that reason it is not unlawful. In legal effect the complaint of the appellant is that the agents of the appellee falsely and fraudulently represented to him that if he would take out a policy of insurance in their company the latter would make him a loan by which he could save in interest $200 or more for each year during which the loan existed; that such promise was valuable and formed the consideration which induced him to cancel his other insurance and to make this particular contract. According to his contention it lies at the very base of the agreement, and upon it alone rests the agreement to make the insurance contract; and had no such promise of the loan been made, he would not have taken out the policy of insurance in the appellee company.

If the proanise of the agents to make the loan at the reduced rate of interest is so connected and interwoven with the contract to pay the insurance premiums as to authorize a rescission of the latter upon proof that the promise was fraudulently made, then such a promise must have formed a material part of the actual consideration for entering into the insurance contract. Manifestly such a promise would be an “offer to give * * * as an inducement to insurance” something of value, and should have been “specified in the policy.” It is one of the evident purposes of the statute above quoted to prevent discriminations and secret agreements by which certain policy holders may be enabled to secure special favors as a consideration for their contracts of insurance. In this instance the policy of insurance was made an exhibit to the appellant’s petition, and there is no contention that it contained the stipulation here insisted upon as a ground for rescission. Hence it falls within the prohibition of the statute.

[2] That being true, it logically follows that the appellant cannot insist that he was deceived by a promise .which the agents could not legally make. 1-Ie is charged with a knowledge of the provisions of the statute relating to such transactions; he will not be allowed to plead that did not know that such limitations upon the power to make insurance contracts existed. He is therefore in no attitude to insist that he was the victim of a fraud perpetrated by the representatives of the insurance company. Ho had a right to give his notes for his premiums. It is not contended that the premium rates which he promised to pay were in excess of those ordinarily charged for that character of insurance. Neither is it charged that they are different from the rates he had been, previously paying, or that the insurance he now holds was less satisfactory than that which he had in the former company. On the contrary, it appears that the reduction in the interest rate on the loan promised was a special benefit which he was not' enjoying prior to the making of this contract, and one which he expected solely in consideration of transferring his insurance to the appellee company.

We are therefore of the opinion that there was no error in the action of the court in sustaining the demurrer, and the judgment is affirmed.

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