Court Opinion

ID: 4898257
Source: CourtListenerOpinion
Date Created: 2021-09-03 00:13:49.433716+00
Date Added: 2024-06-11T08:12:50.543133
License: Public Domain

In my opinion the trial court and the majority of the Court of Civil Appeals reached the correct result. This court is holding in effect that respondent company assumed the insurance coverage exactly as provided by the terms of the policy as originally issued by the Mutual Company. Obviously if this had been the intention of the company all that needed to be said in the Assumption Certificate was: 'This Is to Certify that the above numbered policy, issued to the Insured or Policyowner shown above, has been assumed and reinsured by Peoples Life Insurance Company, An Old Line Legal Reserve Stock Company, Tyler, Texas.' But the certificate went further in setting out the conditions under which the policy was assumed as follows:
 "1. The Amount of Insurance payable under this Assumption Certificate as to each Insured shall be the amount in force as to such Insured under the above numbered policy as of the Effective Date of this Certificate."
The inference must be drawn that this condition effected some change in the amount of insurance payable, otherwise the clause serves no useful purpose whatsoever. It is to be borne in mind that on the date of the assumption all five of the persons covered by the original policy were living. It seems clear to me that the amount of insurance in force as to each insured on the effective date of the certificate was only $150 because under the terms of the original policy if anyone had died on that date the maximum payable would be $150. The purpose of the clause as I see it is to afford to each insured the same protection no matter in what order each might die.
There are other changes in the Assumption Contract which bear out this conclusion. For example, the original insurer was a Mutual Company and the policy contained the following provisions:
 "The entire mortuary fund derived from premium payments on this and all like policies is pledged for the payment of approved death claims arising hereunder and no extra payments will be demanded unless and until said mortuary fund is exhausted and in that case it is agreed that the officers of the Company have the right to call for extra payments, which must be paid in order to keep the policy in force and effect."
The privilege of increasing the premium and demanding additional assessments has been voided by the Assumption Contract. The respondent is an old line legal reserve company and in its contract it provides that the premiums shall be the same as charged in the original policy but not subject to change during the continuation of the policy after its assumption and no additional assessments can be levied. I think it is commonly known that the plan provided in the mutual policy of increasing the benefits after the death of members of the group is not in use by so-called old line or standard insurance companies.
Under the construction given by this court to Paragraph 1 of the Assumption Contract, the respondent has assumed a total insurance liability of $1,737 for which it receives an annual premium of $13.80. The ages of the five insured persons ranged *Page 106 
from 28 to 62 years on the date of the assumption of the contract. I daresay that it is also commonly known to the insurance-buying public that ordinary old line life insurance cannot be obtained on any such terms. Under the respondent's contention it assumed only a total liability of $750 which would seem to be much more reasonable compared with the premium charged.
I would affirm.