Court Opinion

ID: 9669272
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:47:19.081383+00
Date Added: 2024-06-11T18:15:54.844673
License: Public Domain

KEITH, Justice
(dissenting).
I respectfully dissent. Under the specific terms of the policy contract sued upon, all coverage upon plaintiff’s vehicle expired at 12:01 a. m., on May 18, 1969, and plaintiff made no effort to tender any payment until “late in the day of May 19, 1969” when he tendered cash to a local agent. The majority admits, as it must, that “there is no way for money paid to Guy in Kirby-ville [even then more than twenty-four hours past due] to get to defendant in Austin the same day”; and, as a matter of fact, the tendered payment did not arrive until May 21, after the destruction of plaintiff’s vehicle.
The policy involved is one of the so-called “month-to-month” type of policy and our courts have held that prompt compliance with the specific payment provisions therein found are not waivable by unauthorized acts of agents. National Life & Accident Ins. Co. v. Casillas, 63 S.W.2d 396, 397 (Tex.Civ.App.—San Antonio, 1933, error dism.); Commonwealth Life & Accident Ins. Co. v. Nelligan, 220 S.W.2d 209, 213 (Tex.Civ.App.—Galveston, 1949, ref. n. r. e.); National Bankers Life Ins. Co. v. Bunnell, 227 S.W.2d 851, 852 (Tex.Civ.App. —Ft. Worth, 1950, no writ).
In Bunnell, supra, the court said:
“The binding effect of the continued contract was dependent upon the acceptance by appellant [insurer] of the premiums tendered by appellee. The option was with appellant and it so exercised it under the contract. Appellant’s option in this case is not unlike its option to accept or reject an application in the first place.
*486American Life Ins. Co. v. Nabors, 124 Tex. 221, 76 S.W.2d 497.”
Not having paid the premium as and when due, plaintiff pleaded waiver of the right of forfeiture or cancellation of the policy, the entire allegation being set out in the margin.1 The majority concedes that, “It is apparent that plaintiff did not comply with the strict terms of the contract and cannot prevail unless the doctrine of waiver and estoppel has application.” [Majority opinion, p. 483.] There is no question of forfeiture or cancellation in this case, notwithstanding the pleadings noted above. At the time plaintiff paid his money to Guy he had no coverage — not by virtue of cancellation or forfeiture — but by simple expiration of the policy period in the contract itself.
At that time, there was no contract between the parties. This quotation from Smith v. McKnight, 240 S.W.2d 368, 372 (Tex.Civ.App. —Amarillo, 1951, no writ), is deemed appropriate. After discussing the elementary proposition that for waiver to be applicable, there must be an intentional relinquishment of a known right,2 the court said:
“Upon termination of the contract, there then existed no ‘known right’ subject to relinquishment. It appears that there may be soundly added to the expressions in regard to the principle of waiver the following thought: Waiver creates no right, it merely acts in regard to an existing right. You cannot effect a contract or an extension of a contract by waiver. You can only waive the existing rights thereunder.” (Emphasis supplied.)
Similarly, the doctrine of equitable estop-pel, or estoppel in pais, does not of itself create a new right or give a cause of action. It operates always as a shield and never as a sword. 28 Am.Jur.2d, Estoppel and Waiver, § 33, p. 637.
There is, of course, a distinction between waiver and estoppel, as was pointed out in Massachusetts Bonding & Ins. Co. v. Orkin Exterminating Co., 416 S.W.2d 396, 401 (Tex.Sup., 1967), quoting from Wirtz v. Sovereign Camp, W.O.W., 114 Tex. 471, 268 S.W. 438, 441 (1925) as follows:
“ ‘Waiver presupposes full knowledge of existing right, while estoppel arises where by fault of one, another has been induced to change his position for the worse.’ ”
Plaintiff’s position worsened only through his own fault — not any act or omission of the defendant. The premium notice which he had received contained this wording: “NO GRACE PERIOD! IF PREMIUM IS NOT RECEIVED IN OFFICE BY DUE DATE YOUR COVERAGE EXPIRES.” In the most prominent position and in extremely large type upon the face of the notice, these words appeared: “MAIL THIS NOTICE WITH PREMIUM TO COMPANY OFFICE.”
Plaintiff offered in evidence a portion of a rate manual which contained this language :
“2. The premium for the renewal of this policy is due and payable to the Company not later than the due date of the premium notice. Payment shall be considered as having been made upon receipt and acceptance of the premium at the Company Office and not at the time of mailing by the insured.
*487“3. The insurance coverage shall expire as of 12:01 A.M. on the due date of this renewal, unless the premium is paid when due.”
The reliance upon Southland Life Ins. Co. v. Lawson, 137 Tex. 399, 153 S.W.2d 953 (1941) is misplaced. Justice Hamilton in Orkin, supra, discusses the Lawson Case, and in doing so cites American Standard Life Ins. Co. v. Denwitty, 256 S.W.2d 864 (Tex.Civ.App.—Dallas, 1953, error dism.) with approval. Denwitty, as in our case, presented the question of alleged payment of an overdue premium to a local agent when the policy provided for payment to the company. There the court said:
“ ‘The rule seems to be well settled in this state to the effect that, when the limitation is expressed in the application or in the policy in such way that the insured is charged with knowledge thereof, the company will not be estopped by the wrongful acts of the agent.’ Texas State Mutual Fire Ins. Co. v. Richbourg, Tex. Com.App., 257 S.W. 1089, 1090.”
It has long been recognized in Texas that “the condition of the policy that it shall cease if the stipulated premiums are not paid as provided for is of the very essence and substance of the contract.” General American Life Ins. Co. v. Rios, 139 Tex. 554, 164 S.W.2d 521, 523 (Tex.Com.App., 1942). And, the majority recognizes plaintiff’s knowledge of his obligations to pay the premium at the time and in the manner provided in the policy and his failure to comply with the provisions.
Notwithstanding plaintiff’s pleading of waiver and estoppel as to forfeiture and cancellation — and this at a time when there was no contract then in effect between the parties, I find no evidence from any source in this record which indicates that there was any conscious relinquishment of any known right by the defendant. It had no obligations, at that time, to plaintiff and it had no rights to relinquish. Similarly, I find no evidence of estoppel. The very notice of the overdue premium which plaintiff carried to Guy’s office contained all of the information he needed to determine his contractual rights with the defendant. There was not, and I repeat, at that time, any contractual agreement in existence between the parties, nor was there any misrepresentation made to plaintiff.
In Hallmark v. United Fidelity Life Ins. Co., 155 Tex. 291, 286 S.W.2d 133, 136 (1956), the court said:
“It is generally essential to the application of the doctrine of equitable estoppel that the person claimed to be estopped shall have had full knowledge of the real facts at the time of his representation, concealment or other conduct relating thereto and alleged to constitute the basis of the estoppel.”
I find no evidence in the record of any misrepresentation, concealment, or other conduct on the part of the defendant upon which the doctrine of estoppel in pais can be based. Cf. Champlin Oil & Refining Co. v. Chastain, 403 S.W.2d 376 (Tex.Sup., 1965), and particularly the dissent of Justice Pope at p. 395. The only reason plaintiff assigns for his failure to pay the premium when due is that he did not have the money with which to pay it. Such an excuse does not, I submit, authorize this court to afford plaintiff coverage to which he is clearly not entitled as a matter of law.
The majority rejects the concept of the “month-to-month” type of coverage afforded to the plaintiff, and attempts to distinguish the Casillas Case, supra (63 S.W.2d 396, 397) upon the facts. Yet, the very evidence upon which the majority decision is based shows that our plaintiff had so treated the policy almost from its date of original issue.
At any time before noon on May 18, 1969, under the plain language shown on the notice which plaintiff had in his possession, he *488had five options open to him. He could pay to the defendant, at its office in Austin, Texas, one of the following premiums for coverage for the periods of time indicated: (a) $40.00 for one month; (b) $111.00 for three months; (c) $210.00 for six months; or (d) $398.00 for twelve months. Had he chosen either of these options, he would have had coverage upon his vehicle at the time of its loss. Instead, he selected the fifth option of doing nothing and making no payment whatsoever. In so doing, he let the contract expire — and in so doing, he was entirely within his rights and was not relying upon any statement of the defendant.
This court has now made a new contract for the parties; but, long ago, Judge Brown in Maryland Casualty Co. v. Hudgins, 97 Tex. 124, 76 S.W. 715, 747, 64 L.R.A. 349 (1903), laid down the rule prohibiting such action, saying: “ * * * the courts cannot undertake to make a new contract, in disregard of the plain and unambiguous language used by the parties.” Or, as stated more recently by Justice Smith in Republic National Life Ins. Co. v. Spillars, 368 S.W.2d 92, 94, 5 A.L.R.3d 957 (Tex.Sup., 1963): “ * * * where the language of an insurance contract is plain, it must be enforced as made.” See also, American-Amicable Life Ins. Co. v. Lawson, 419 S.W. 2d 823, 826 (Tex.Sup., 1967).
In the determination of this case, the majority relies upon a motley collection of cases, most of which originated during the days of the economic depression of the nineteen thirties. Actually, what the majority has presented is no answer at all to the problem which we face. It is, instead, what the logicians call a tautology— repeating the same statement in different words so that a thing seems to be a consequence of itself — the finagled factor reasserted. There has been a great change in the law of insurance since those days, and it seems to me that we should not blindly extend these old doctrines of doubtful validity unless absolutely compelled to do so in order to avoid a conflict in opinions.
Believing that the case is fully developed and that there is no liability upon the expired policy, as a matter of law, I would reverse the judgment of the trial court and render judgment for the defendant.

. “By previous conduct and by custom and usage, defendant waived the right of forfeiture or cancellation of said policy for late payment of premiums, and by the actions of defendant and its authorized agent, plaintiff was induced to believe that the stipulation in the policy as to forfeiture or cancellation of said policy for non-payment of premiums to the company’s home office on specified dates would not be enforced, and defendant is estopped to assert forfeiture or cancellation as a defense herein.”

. Texas & Pac. Ry. Co. v. Wood, 145 Tex. 534, 199 S.W.2d 652, 656 (1947) ; Ford v. Culbertson, 158 Tex. 124, 308 S.W.2d 855, 865 (1958).