United American Insurance Company v. Selby

Mr. Justice Smith

delivered the opinion of the Court.

This is a suit on a policy of health and accident insurance *164 for benefits for loss of time due to injury. Trial was had before the court without the intervention of a jury. A true copy of the policy was incorporated in the agreed statement of facts. All facts were stipulated and agreed to by written stipulations filed with the court. Judgment was rendered for respondent.

The Court of Civil Appeals affirmed the judgment of the trial court on two grounds. It held (1) that notice of injury was given by the insured within the time allowed by statute and within the time fixed by the provisions of the policy; (2) that the provision in the policy that the insured would not be indemnified for loss for injury during any period which the insured was not under the personal and regular attendance of a legally licensed doctor of medicine or osteopathy, was evidentiary and was not a condition precedent to recovery. These were the only questions before that court. 330 S.W. 2d 495 .

The same two questions are now here by application for writ of error. The original application alleged jurisdiction under Subdivision 6 of Article 1728, Vernon’s Annotated Civil Statutes of Texas. The amount in controversy, according to the stipulations being only the sum of $505.80, the application was dismissed for want of jurisdiction. The application was granted after petitioner amended its application with leave of the court first being had and obtained. The amended application alleged that this court had jurisdiction under Subdivision 3 of Article 1728, Vernon’s Annotated Civil Statutes.

This, in effect, is a suit for damages. The question of whether written notice of the injury on which the claim was based must be given within twenty days, as provided in the policy, involves the construction of Article 5546 1 , Vernon’s Annotated Civil Statutes of Texas. Petitioner contends that the Court of Civil Appeals’ construction of this Article has the effect of allowing a general statute to repeal Article 3.70-3(5), 2 Vernon’s Annotated Civil Statutes of Texas. We agree with petitioner that this court has jurisdiction. Since the application contains a point *165 coming within our jurisdiction, we have jurisdiction to pass upon all points presented. See Pittman v. Baladez, 158 Texas 372 , 312 S.W. 2d 210 .

We have concluded to sustain petitioners point that the exclusionary clause in the policy to the effect that the indemnities provided in the policy do not cover any period during which the insured is not under the personal and regular attendance of a legally licensed doctor of medicine or osteopathy. Our conclusion on this point requires a rendition of judgment in favor of petitioner. This holding renders it unnecessary to decide the notice question.

The policy under Part Two insures against loss of time, as the result of an accident, and the schedule of indemnities provides for indemnities to be paid for total disability the sum of $200 per month for a period limited to 60 months. The policy, however, provides on page one that the “benefits, provisions, exceptions, limitations and deduction on the following pages are a part of this policy.”

On page 3 we find the following:

“PART II

“EXCLUSIONS, LIMITATIONS AND REDUCTIONS

“D. The indemnities provided in this Part do not cover any injury sustained by the Insured while insane; or injury caused by war or any act of war or sustained while in military or naval service of any country at war; or aircraft accidents unless the Insured is a fare-paying passenger in a licensed passenger aircraft provided by an incorporated passenger carrier and while operated by a licensed pilot upon an established schedule over a regular passenger route between definitely established airports; or any injury sustained outside of the continental limits of the United States or Canada; or suicide or any attempt thereat, while sane or insane; or hernia; or any kind of disease or medical or surgical treatment therefor; or any period during which the Insured is not under the personal and regular attendance of a legally licensed Doctor of Medicine or Osteopathy, other than Insured. * * *.” (Emphasis added.)

It was stipulated that, during the period of disability, respondent was under the personal and regular attendance and treatment of only a naturopath; that, during said period of said *166 disability, respondent was not under the personal and regular attendance or treatment of a legally licensed doctor of medicine or osteopathy, unless the licensed naturopath is deemed to have been such a legally licensed doctor of medicine or osteopathy as a matter of law by virtue of the fact that he was licensed to practice Naturopathy.

A Naturopath is neither a legally licensed doctor of medicine nor of osteopathy. Henry Schlichting, Jr. v. Texas State Board of Medical Examiners, 158 Texas 279 , 310 S.W. 2d 557 . It follows that petitioner was not at any time during the critical period involved under the personal and regular attendance of a legally licensed doctor of medicine or osteopathy. The exclusionary clauses, supra, clearly and unequivocally provides that there shall be no coverage in such a situation. The provision is listed as an exclusion in the policy. The policy expressly provides that the insuring provisions are subject to the provisions, exclusions, and limitations in the policy. The Exclusions, Limitations and reductions clause in plain, clear, and unequivocal language simply provides that there is no coverage in a case such as we have here.

Although the case of Burns v. American National Insurance Company, Texas Com. App., 280 S.W. 762 , was one wherein the insurer was relying upon a “condition precedent to recovery” clause, we believe the principles of law announced therein are controlling here. In that case the claim was based upon the obligation imposed by the terms of the policy to pay a certain sum of money each month under certain conditions. Each monthly sum was to be paid upon the happening of certain events and the performance by Burns of certain things. The policy contained a provision that if Burns should be disabled “* * * he or his representatives shall, as a condition precedent to recovery hereunder, furnish the company every thirty days with a report in writing from his attending physician or surgeon, fully stating the condition of the insured and the probable duration of his disability.”

The court, in holding that the obligation on the part of Burns was a condition precedent to recovery, said: “* * * There could be no breach of the contract by the defendant in error, and therefore there could be no damages resulting to the plaintiff in error, until these conditions existed and the performance by him of the things which he had obligated himself to have done. One of the things he obligated himself to have done was to have his attending physician furnish a report every 30 days *167 stating his physical condition. The law compels us to, assume, in view of the testimony to the effect that the plaintiff in error was entitled to be paid the $100 monthly on account of his disability, that had the report of his physician been made in accordance with this provision, the defendant in error would have paid each month the sum it obligated itself to pay. Until the conditions prescribed by the terms of the policy had been met, no obligation was imposed upon the defendant in error to pay the plaintiff in error anything, and, in the absence of such obligation, there could be no breach of the contract and therefore no damage could accrue.”

The terms of the contract in that case just as here were free from ambiguity. In the present case, in view of the stipulation of the parties, there is no element of a cause of action based upon a breach of the contract alleged to have been executed by the petitioner, the party in default. The indemnities in the policy did not cover the period of claimed injury for the reason that the policy expressly excluded coverage for the period during which the insured was not under the personal and regular attendance of a legally licensed doctor of medicine or osteopathy. The general rule in most jurisdictions where this question has been decided by the courts is that the particular exclusion in question here is valid and reasonable and is a condition precedent to the right of recovery of benefits, and not against public policy. See Lustenberger v. Boston Casualty Company, 300 Mass. 130 , 14 N.E. 2d 148 , 115 A.L.R. 1055 ; Provident Life & Accident Insurance Company v. Harris, 234 Ky. 358 , 28 S.W. 2d 40 ; State ex rel. Mutual Benefit Health & Accident Ass’n v. Trimble, 334 Mo. 920 , 68 S.W. 2d 685 ; Equitable Life Assurance Society of United States v. Burns, 254 Ky. 487 , 71 S.W. 2d 1009 , 115 A.L.R. 1062 and many cases therein cited.

Respondent admits that the “regular medical reports” provision contained in the policy involved in the case of Burns v. American National Insurance Company, supra, is such a provision as would operate as a condition precedent to recovery, but contends that “Exclusion D,” supra, is evidentiary and will not operate as a bar to a recovery. In support of this contention, respondent relies upon such cases as Federal Surety Co. v. Waite, Texas Civ. App., 1927, 297 S.W. 312 , wr. dism.; Provident Insurance Company v. Shull, Texas Civ. App., 1933, 62 S.W. 2d 1017 , no writ history; American National Insurance Company v. Briggs, Texas Civ. App. 1934, 70 S.W. 2d 491 , wr. dism.; American Casualty Company v. Horton, Texas Civ. App., 1941, 152 S.W. 2d 395 , wr. dism., and Inter-Ocean Casualty *168 Company v. Brown, Texas Civ. App., 1930, 31 S.W. 2d 333 , wr. dis. The Court of Civil Appeals accepted these cases as authority for its holding that Exclusion Clause “D,” supra, was “* * * evidentiary in effect, and will not operate to bar the claim of a person actually disabled who would otherwise be entitled to recover under the terms of the policy. The court went on to say that the “Texas courts have long held this to be a matter of public policy, and will not treat such provisions in the policy as conditions precedent to recovery.”

We decline to follow these cases in deciding the question before us in the present case. To give a full analysis of each of the cases relied upon by the respondent would unnecessarily extend the length of this opinion. It is sufficint to say that the several cases assigning various reasons for holding that the particular clauses of the policy under consideration were evidentiary and not conditions precedent are not based upon sound reason. Most of these cases recite a split of authority on the question. They reject the authorities holding that the particular clause was a “condition precedent” to recovery. We cannot agree, as some of these cases seem to hold, that the exclusion clause under consideration here is not clear and that, therefore, the rule that the contract should be strictly construed against the insurer must be invoked, and that the intention of the parties to the contract is to be sought by not only considering the contract as a whole, but in addition thereto the situation of the parties, and the circumstances under which the contract was executed should be considered. The opinion in the case of Federal Surety Co. v. Waite, supra, says: “* * * So considering the contract of insurance in question, it is clearly one of indemnity. * * * .” We do not consider that the contract in the present case is ambiguous. We recognize the general rule that contracts of insurance are to be strictly construed in favor of the insured, but this does not affect the further general rule that contracts of insurance are to be construed as other contracts, and that all parts of the contract are to be taken together, and such meaning shall be given to them as will carry out and effectuate to the fullest extent the intention of the parties. See Cooley’s Briefs on the Law of Insurance, Vol. 2, p. 1483. Applying the latter rule, it was clearly the intention of the parties that the indemnities provided under Part II of the policy would not cover any claim for injury sustained by the insured while the insured was not under the personal and regular attendance of a legally licensed doctor of medicine or osteopathy. The respondent, in order to recover, must show not only that he sustained an injury, but he must go further and show that during the time for *169 which he seeks indemnity payments, he was under the personal and regular attendance of a legally licensed doctor of medicine or osteopathy. See Lustenberger v. Boston Casualty Company, and other cases, supra. Such proof is entirely absent in this record. The stipulation is that respondent was not under such personal and regular attendance. This stipulation of fact and not that one that respondent was totally disabled for 51 days is controlling. Therefore, we cannot accept the contention that the question of whether a naturopath or a licensed doctor of medicine or osteopathy attended and cared for the respondent became immaterial solely because of the admission that respondent was totally disabled for a definite period of time. The cases relied upon by the respondent, which, either by way of dicta or otherwise, held, in effect, that a clause somewhat similar to the one involved here was evidentiary in its operation, were wrongly decided. Such cases, therefore, are disregarded in the disposition of the question involved here. The fact that in the present case the provision relating to being under a physician’s care is found in the portion of the policy designated as “Exclusions, Limitations and Reductions” is not of particular significance. However, the clause does become important when considered along with all other provisions of the policy. The provision was not without purpose and without meaning. It indicates that it was the intention that the provision would reasonably act as a safeguard against fraudulent or lack of good faith claims, and, at the same time, insure proper treatment of injuries, if any, and that such treatment would at least shorten the period of disability. There can be no doubt as to the meaning of Exclusion D, supra. The policy clearly affords no coverage. The provision cannot be said to be merely evidentiary.

The judgments of both the trial court and the Court of Civil Appeals are reversed, and judgment is here rendered that respondent take nothing by his suit.

Opinion delivered July 20,1960.

. —“No stipulation in a contract requiring notice to be given of a claim for damages as a condition precedent to the right to sue thereon shall ever be valid unless such stipulation is reasonable. Any such stipulation fixing the time within which such notice shall be given at a less period than ninety days shall be void. * * *.”

. —“Notice of Claim: Written notice of claim must be given to the insurer within twenty days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at * * * (insert the location of such office as the insurer may designate for the purpose); or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer.”