Home Ins. Co. v. Dick

• Decision Date: 10 April 1929
• Docket Number: (No. 1235-5265.)
• Parties: HOME INS. CO. et al. (Compania General Anglo-Mexicana de Seguros, S. A.) v. DICK et al.
• Court: Texas Supreme Court

15 S.W.2d 1028

HOME INS. CO. et al. (Compania General Anglo-Mexicana de Seguros, S. A.) v. DICK et al.

(No. 1235-5265.)

Commission of Appeals of Texas, Section A.

April 10, 1929.

Error to Court of Civil Appeals of First Supreme Judicial District.

Suit by C. J. Dick against the Compania General Anglo-Mexicana de Seguros, S. A., in which the Home Insurance Company and another were named as garnishees, and in which the Texas & Gulf Steamship Company and another intervened. A judgment for plaintiff was affirmed by the Court of Civil Appeals , and defendant and the garnishees bring error. Affirmed.

Terry, Cavin & Mills, of Galveston, for plaintiffs in error.

Williams, Neethe & Williams and John L. Darrouzet, all of Galveston, for Interveners.

Lockhart, Hughes & Lockhart, of Galveston, for defendant in error.

Statement of the Case.

CRITZ, J. C. J.

Dick filed suit in the district court of Galveston county, Tex., against Compania General Anglo-Mexicana de Seguros, S. A., hereinafter called the Mexican company, to recover $35,000 on a policy of fire insurance issued by the Mexican company on a boat of some character. It is alleged, and found by the trial court, that the boat was totally destroyed by fire and sunk in the harbor of Tampico, Mexico, on July 27, 1921, while the policy of fire insurance was in force. The Mexican company was a corporation incorporated under the laws of the Republic of Mexico, and had no agent in this state. This company was cited in this cause by publication as provided under our statutes, and attorneys were appointed by the trial court to represent it. Said Mexican company answered by and through said attorneys alone.

Dick, the plaintiff in the original suit, sued out ancillary writs of garnishment against Home Insurance Company and Franklin Fire Insurance Company, with whom the Mexican Company had reinsured the risk, as garnishees of the Mexican company. The two garnishees are both American companies doing business in this state, and were duly served by service on their local agents, as required by the Texas statutes. The Texas & Gulf Steamship Company and Suderman & Young were allowed to intervene in the suit on grounds we are not here interested in.

On final trial in the district court, judgment was rendered against the Mexican company for $36,675, and against each of the garnishees for one-half that amount, $18,337.50. The cases were duly appealed to the Court of Civil Appeals for the First District at Galveston, which court in all things affirmed the judgment of the trial court. 8 S.W.(2d) 354. The cause is now before this court on writ of error granted on application of the three insurance companies.

The Court of Civil Appeals makes a very full and complete statement of the issues involved in this case, and, as such issues require a very extended statement, for the sake of brevity, we refer to the statement made by the Court of Civil Appeals, 8 S.W. (2d) pages 355 to 357, inclusive.

Opinion.

The first assignment of error of the three insurance companies is as follows: "The policy upon which the main suit against the Mexican Company was based containing a contractual provision prohibiting suit thereon unless brought within one year from the date of the accrual of the cause of action, and this suit not having been filed within such period, and it being admitted by the demurrer filed by the Defendants in Error that such provision was valid under the laws of Mexico, where the contract was made, the Court of Civil Appeals erred in holding that this suit could be maintained, and in affirming the judgment against the Mexican Company and the American Companies as Garnishees, and erred in not sustaining the validity of such contractual provision."

As shown by the pleadings of the Mexican company, and the garnishees, the original insurance policy constituted a contract entered into in the Republic of Mexico, and contained the following stipulation:

"It is understood and agreed that no judicial suit or demand shall be entered before any tribunal for the collection of any claim under this policy, unless such suits or demands are filed within one year counted as from the date on which such damage occurs."

"The present policy is subjected to the dispositions of the commercial code in that it does not alter or modify the stipulations which that same contains."

The insurance companies then pleaded articles 1038, 1039, and 1043, of the Mexican Commercial Code, which read as follows:

Article 1038: "The rights of action derived from commercial acts shall be subject to prescription in accordance with the provisions of this code."

Article 1039: "The periods fixed for the enforcement of rights of action arising out of commercial acts shall be fatal except restitution against the same is given."

Article 1043: "One year shall prescribe actions derived from contracts of life insurance, sea and land."

It will be seen from the above facts that the policy of fire insurance made the basis of this suit was barred by the statutes of limitation of the Republic of Mexico, at the time the suit was filed in the district court of Galveston county, Tex., but was not barred by any statute of limitation in this state. It therefore follows that, if the laws of limitation of Mexico, the place where the contract was made, must govern, then the pleas of limitation of the insurance companies should be sustained, but, on the other hand, if the laws of Texas, the lex forum, should govern, then the insurance companies are liable.

We are of the opinion that it is the settled law of this state that the contractual and statutory limitations pleaded by the insurance companies, lawful in the Republic of Mexico, are unenforceable in this state, because they are contrary to the statutory laws of Texas, and to the public policy of this state as expressed by the statutes and decisions of same, and because the question of limitation is one which depends upon the law of the forum. R. C. S. of Texas, art. 5545; Gautier v. Franklin, 1 Tex. 732; Carrigan v. Semple, 72 Tex. 306, 12 S. W. 178. We might cite numerous other authorities in this state and out of it holding that statutes of limitation relate only to the remedy, and are controlled by the law of the forum irrespective of the place of the contract, but we consider this question too well settled to require further discussion.

It is contended by the insurance companies that the statutes of Mexico above quoted are more than mere statutes of limitation, but are statutes of prescription, and operate not only to bar the right of recovery by limitation, but operate to kill the cause of action after the lapse of one year without filing suit. We are of the opinion that there is no difference or distinction to be drawn between statutes of limitation and statutes of prescription so far as the application of the rule that the law of the forum governs. R. C. S. of Texas, 1925, art. 5545; Gautier v. Franklin, 1 Tex. 732.

However, even if it should be held that there is a distinction to be drawn between a prescriptive statute that kills the cause of action, and a statute of limitation that merely bars the right of recovery by limitation where limitation is pleaded, still in this case the result would be the same, as it is shown that Dick removed from Mexico a few days after the...