Court Opinion

ID: 9660498
Source: CourtListenerOpinion
Date Created: 2023-08-23 22:14:37.122906+00
Date Added: 2024-06-11T09:05:12.425026
License: Public Domain

BARROW, Justice,
dissenting.
I respectfully dissent.
I do not believe that the majority has followed the rule laid down by this Court in Great Southern Life Ins. Co. v. Peddy, 139 Tex. 245, 162 S.W.2d 652 (1942), which is the rule in nearly all jurisdictions. In Ped-dy we stated:
“The great weight of current decisions sustains the rule that when a policy specifically provides for the payment of premiums, and expressly specifies the date from which the premium period is to be computed, and makes that date the day on which recurring premiums are due and payable, such date will control, irrespective of the date on which the policy is delivered.” (Emphasis Added)
The critical requirement of this rule is that the policy must clearly set forth a specific and certain date for the payment of future premiums if that date is to be any earlier than the date the policy becomes in force and effect. This critical requirement is also stated in Southland Life Ins. Co. v. Vela, 147 Tex. 478, 217 S.W.2d 660 (1949). In Peddy, the specific date clearly set out in the contract was November 25. In Vela, premiums were expressly payable on the
*78418th day of September, December, March and June. In Kurth v. National Life & Accident Ins. Co., 79 S.W.2d 338 (Tex.Civ. App.-San Antonio 1935, writ ref’d), the policy expressly provided that the premium was payable on December 10 and on the 10th day of December of each year thereafter.
This critical requirement is illustrated by the holding in Jefferson Standard Life Ins. Co. v. Myers, 284 S.W. 216 (Tex.Com.App. 1926, judgment adopted). There the policy was dated September 7,1921, but expressly provided that it was not to become effective until payment of the first annual premium which was paid on October 4, 1921. The policy provided that the premiums should be payable on each anniversary of such policy. The court held that the premiums were payable on the latter date when the policy became effective. It said:
“In other words, the company, in the absence of a contract to the contrary, has no right to collect a premium for almost a month before the insured has any protection under the policy. The premium is for a year. Every provision of the policy shows this beyond a doubt. Of course, where the insured contracts definitely that the premium shall be payable on a certain date, even though less than a year, we have a different question. Some of the courts uphold such a provision upon the theory that the insured can contract to suit himself and waive his natural rights. But this policy contained no such agreement. . . .”
Here it was undoubtedly contemplated that the policy would become effective on March 15, 1972, but it did not. Under the terms of the insurance contract, the policy in question came into force on April 18, 1972 at which time the insurer received the first annual premium. The contract provides that the payment of an annual premium would maintain this policy in force for one year. It further provides that “[s]uch periods 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.” Under the majority holding, the insured received only eleven months coverage for his annual premium contrary to the express provision of the policy. I cannot agree that there is a clear and definite provision in the policy requiring this result.
The policy does not expressly provide that the annual premiums are payable on March 15 or any other specific date. Rather, on the third page of the policy it is provided that the twelve months (paid for by the annual premium) “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.” To determine the date the “first premium is due,” one must turn back to the first page wherein it is provided that the first premium “is payable on the Effective Date.” On the second page, but under a clear plastic window so as to be visible from the first page, there is written:
MARCH 15, 1972 Effective Date
It is noted that the policy provision relative to when the next premium shall fall due not only does not refer to a specific date, but also does not refer to the term “Effective Date.”
I do not believe that the three step process the insured is required to undertake under this contract to reach the result mandated by the majority opinion complies with our previous requirement that the policy “expressly specify the date from which the premium period is to be computed.” Consequently, it cannot be said that the contract demonstrates a clear agreement by the parties that the annual premiums were to be due and payable on March 15 irrespective of the date that the policy actually comes into force and effect. This date, one of critical importance to both parties, was left uncertain in this case. It is the insurer that is in the position to realize this importance; it is the insurer that is in the position to avoid this uncertainty by properly preparing the contract, and it is the insurer that should bear the loss when the contract is left unclear.
The rule adopted by this Court in Peddy in 1942, which is followed by a majority of *785other jurisdictions,1 is clear and easy to follow. Despite this, the policy here does not contain a specific and certain date when the annual premiums are due. Although the insurer undoubtedly conducted the subsequent correspondence with insured on the basis that the annual premium was due each March 15, there is nothing in the record to show that insured accepted or agreed to this date. To the contrary, the second annual premium was paid and accepted by insurer on April 25, 1973.
I would affirm the judgment of the Court of Civil Appeals.
McGEE, CAMPBELL and SPEARS, JJ., join in this dissent.

. See: Farr v. Sun Life Assurance Co. of Canada, 351 F.Supp. 299 (D.Miss.), approved and affirmed, 469 F.2d 1392 (5th Cir. 1972); Prudential Insurance Co. v. Romero, 28 Colo.App. 337, 472 P.2d 772 (1970); Lentin v. Continental Assur. Co., 412 Ill. 158, 105 N.E.2d 735 (1952); Reid v. Bankers Life Co., 148 Neb. 604, 28 N.W.2d 542 (1947); Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 161 A.2d 717 (1960); 14 Appleman, Insurance Law and Practice § 7953; 43 Am.Jur.2d Insurance §§ 544 546; Annot., 44 A.L.R.2d 472; Contra: Duerksen v. Brookings International Life & Cas. Co., 84 S.D. 20, 166 N.W.2d 567 (1969).