Armstrong v. Tidelands Life Insurance Company

466 S.W.2d 407, 1971 Tex. App. LEXIS 2476
CourtCourt of Appeals of Texas
DecidedMarch 18, 1971
Docket582
StatusPublished
Cited by34 cases

This text of 466 S.W.2d 407 (Armstrong v. Tidelands Life Insurance Company) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Armstrong v. Tidelands Life Insurance Company, 466 S.W.2d 407, 1971 Tex. App. LEXIS 2476 (Tex. Ct. App. 1971).

Opinion

OPINION

SHARPE, Justice.

This cause involves two separate appeals. Billy G. Armstrong, plaintiff below and one of the appellants here, appeals from an order sustaining the motion for summary judgment of Tidelands Life Insurance Company, defendant below and appellee *408 here, that Armstrong take nothing by his suit. The other appeal is by David Cock-rell, Charles E. Bigley, Lynn L. Strickland and Dan R. Womack, Intervenors below and also appellants here, complaining of the action of the trial court in sustaining Tidelands’ motion to dismiss their petition in intervention.

Appellant Armstrong originally brought suit against Tidelands Life Insurance Company in the District Court of Dallas County, Texas, for damages on account of alleged breach of an exclusive agency insurance contract under which Armstrong claimed commissions were due' him from the sale of hospitalization insurance. Tidelands’ amended plea of privilege to be sued in Nueces County, Texas, was overruled by the trial court. Such ruling was originally appealed to the Dallas Court of Civil Appeals and thereafter transferred to the Austin Court of Civil Appeals which reversed the judgment of the trial court. Tidelands’ plea of privilege was sustained and the case ordered transferred to Nueces County. The contract between the parties was held void and unenforceable by reason of illegality, since Armstrong had not received the required authority from the State Board of Insurance to represent Tidelands Life Insurance Company, hence no cause of action was shown to have arisen in Dallas County. See Tidelands Life Insurance Company v. Armstrong, 414 S. W.2d 196 (Tex.Civ.App., Austin, 1967, n. w. h.).

After the case was transferred to Nueces County, Armstrong filed his third amended original petition which carried forward in substance the allegations of his petition originally filed except that as an alternative ground of recovery he asserted that Tidelands and its officers had falsely represented to him that Tidelands would obtain a license from the State Board of Insurance Commissioners authorizing him to solicit and receive applications for insurance on behalf of Tidelands; that such representations were false; that he relied on them, and that as a result was damaged. The allegations last mentioned were the only ones different from those of Armstrong’s amended original petition which the Court of Civil Appeals on the venue appeal held did not state a cause of action by reason of illegality.

After Tidelands filed its motion for summary judgment against Armstrong and prior to the date set for hearing of it, counsel for Armstrong filed intervenors’ petition on behalf of the other appellants, David Cockrell, Charles E. Bigley, Lynn L. Strickland and Dan R. Womack, claiming a right to recover insurance commissions against Tidelands as sub-agents of Armstrong, and appellee filed its motion to dismiss it. The trial court sustained both of Tidelands’ motions. Armstrong appeals from the order sustaining the motion for summary judgment and intervenors appeal from the order of dismissal sustaining ap-pellee’s motion to dismiss intervenors’ petition.

Armstrong and intervenors have jointly filed one appellants’ brief which asserts four points of error. Points one and three complain of the take-nothing summary judgment against Armstrong. Points two and four complain of the dismissal of the petition in intervention.

We will first- consider the case as to appellant Armstrong. His primary contention here is that the trial court erred in rendering a take-nothing summary judgment against him on the basis that noncompliance with Articles 21.01 and 21.07, Texas Insurance Code, V.A.C.S., is a complete defense to an action for insurance renewal commissions based on fraud. More particularly, Armstrong argues that although he was a generally licensed insurance agent in the State of Texas, he did not have a certificate of authority to transact business for Tidelands because that company falsely represented to him that it would procure a license or permit from the Board of Insurance Commissioners authorizing Armstrong to transact business for Tidelands; that Armstrong relied upon *409 such representation and Armstrong’s contract with Tidelands was executed based upon it. Armstrong says that although the contract may be unenforceable because of Articles 21.01 and 21.07, Section 5, Texas Insurance Code, such fact should not prevent relief nor offer a defense to Tidelands’ fraud.

Tidelands, by its reply points one and two, asserts that the summary judgment against Armstrong was proper (1) because the contract sued upon was void for illegality, and (2) that, assuming Armstrong’s allegation of fraud to be true for the purposes of the motion for summary judgment only, as a matter of law Armstrong was not entitled to rely on Tidelands false representations that it would procure the necessary license for him to solicit insurance for Tidelands. We agree with appellee’s stated position.

Armstrong’s first alleged ground of recovery — for breach of the exclusive agency contract — is untenable because the contract is void and unenforceable for the reasons stated on the venue phase of this case by the 1967 decision of the Austin Court of Civil Appeals in Tidelands Life Insurance Company v. Armstrong, 414 S.W.2d 196, n. w. h. See also Perkins v. Lambert, 325 S.W.2d 436 (Tex.Civ.App., Austin, 1959, wr. dism.).

Armstrong’s second alleged ground of recovery, added by amendment after venue was transferred to Nueces County — based upon the fraudulent representation of Tidelands that it would procure the necessary license for Armstrong — is also untenable because as a matter of law Armstrong was not entitled to rely on it. In the absence of a right to rely on the stated representation, whether false or otherwise, Armstrong cannot recover on the basis of the alleged fraud.

Article 572 of the Texas Penal Code provides in part:

“Whoever for direct or indirect compensation solicits insurance in behalf of any insurance company * * * without a certificate of authority to act as agent * * * for such company, * * * shall be fined not more than one hundred dollars.”

Article 21.01 of the Texas Insurance Code provides in part:

“It shall not be lawful for any person to act within this State, as agent or otherwise, in soliciting or receiving applications for insurance * * * without first procuring a certificate of authority from the Board.”

It is uncontroverted that although Armstrong was licensed generally as a life insurance agent in Texas during the existence of his contract with Tidelands, he was not appointed by the State Board of Insurance to represent Tidelands as an insurance agent. The acts which Armstrong alleges he performed and for which compensation is sought are those specifically prohibited by Article 572 of the Texas Penal Code and Article 21.01 of the Texas Insurance Code unless a Certificate of Authority is first procured from the Insurance Board.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Muller v. Stewart Title Guaranty Co.
525 S.W.3d 859 (Court of Appeals of Texas, 2017)
Partnership for a Healthy Mississippi v. State ex rel. Barbour
958 So. 2d 790 (Mississippi Supreme Court, 2007)
In Re Hood Ex Rel. State Tobacco Litigation
958 So. 2d 790 (Mississippi Supreme Court, 2007)
Healthy Mississippi v. State of Mississippi
Mississippi Supreme Court, 2006
Ahmed v. Shimi Ventures, L.P.
99 S.W.3d 682 (Court of Appeals of Texas, 2003)
Roberts, John Ocie v. City of La Feria, Texas
Court of Appeals of Texas, 2002
Insurance Co. of North America v. Morris
981 S.W.2d 667 (Texas Supreme Court, 1998)
Tony's Tortilla Factory, Inc. v. First Bank
857 S.W.2d 580 (Court of Appeals of Texas, 1993)
Shafer-Pearson Agency, Inc. v. Chubb Corp.
606 N.E.2d 17 (Appellate Court of Illinois, 1992)
Solomon v. Greenblatt
812 S.W.2d 7 (Court of Appeals of Texas, 1991)
Highlands Insurance Co. v. Lumbermen's Mutual Casualty Co.
794 S.W.2d 600 (Court of Appeals of Texas, 1990)
Saldana v. Saldana
791 S.W.2d 316 (Court of Appeals of Texas, 1990)
Express-News Corp. v. Spears
766 S.W.2d 885 (Court of Appeals of Texas, 1989)
Benefits Administration Corp. v. Rearick
705 S.W.2d 234 (Court of Appeals of Texas, 1986)

Cite This Page — Counsel Stack

Bluebook (online)
466 S.W.2d 407, 1971 Tex. App. LEXIS 2476, Counsel Stack Legal Research, https://law.counselstack.com/opinion/armstrong-v-tidelands-life-insurance-company-texapp-1971.