E. Tex. Fire Ins. Co. v. Coffee

Citation61 Tex. 287
Decision Date14 March 1884
Docket NumberCase No. 1785.
PartiesEAST TEXAS FIRE INS. CO. v. J. M. COFFEE.
CourtSupreme Court of Texas
OPINION TEXT STARTS HERE

APPEAL from Galveston. Tried below before the Hon. W. H. Stewart.

Suit brought on a policy of insurance to Coffee & Pearson, and transferred, by consent of defendant, to Coffee, and to recover the amount of loss occasioned by fire to a stock of goods insured thereby, alleged to have been burned.

The defendant pleaded demurrers general and special; that the suit was brought prematurely; that plaintiff had not complied with the conditions of the policy in failing to furnish defendant with preliminary proofs, particular statement of loss, as required by defendant under the terms of the policy; to which the plaintiff replied by supplemental petition that the defendant had waived all such requirements, and had refused to pay the loss for which he sued, to which plea of waiver defendant demurred, and was overruled; defendant pleaded general denial. Verdict for plaintiff for $2,155.55, and judgment thereon.

To the facts stated in the opinion should be added the following: Harris, witness for plaintiff, having testified that he assisted plaintiff in making out the preliminary proofs of loss, and that at his request he had delivered them to T. R. Bonner, the secretary of defendant, on 24th April, 1882, and that a few days thereafter, he, witness, at the time being the traveling agent or drummer of Geo. Seeligson & Co., who held the policy by assignment as collateral security for plaintiff's indebtedness to Seeligson & Co., and that witness considered himself as having authority to demand pay of the policy and to apply so much as necessary to pay Seeligson's debt and to remit to Coffee a check for the balance. That the secretary, T. R. Bonner, and Mr. Gambling, the bookkeeper, and several other gentlemen were in defendant's office at the time. The witness Harris was then asked to state what was then said to him in reference to the subject of the claim under the policy by any officer of the defendant company. To which witness replied, “When I went into the office of the defendant company (the persons being present as above stated), I said: Gentlemen, how about the claim of Coffee on his policy; to which either T. R. Bonner or Mr. Granberry (I cannot say which) replied that affidavits had been made charging him with having burnt his own goods, and that matter had to be cleared up. This response was made in the immediate presence and hearing of Bonner; don't know whether it was made by Bonner or the bookkeeper of defendant.” To which question to and answer of the witness the defendant objected on the ground that the same was not admissible under the pleadings, nor competent to establish or prove a waiver on the part of the defendant of any stipulation or condition in the policy or of any right of defendant thereunder, and because, further, it did not appear that witness was acting as the agent of plaintiff, or that he communicated the fact that he was the agent of plaintiff, if he was such agent. The witness was here permitted to testify as to the last ground of objection, and said: “I assisted in making up the preliminary proofs of loss for plaintiff. He requested me to take them and deliver them to the secretary, which I did just as I would have done for any friend. I never told any officer of defendant then or at any time that I was the agent of the plaintiff, for I was not. I represented G. Seeligson & Co.; was then the drummer of that house, and was making the matter a subject of inquiry on their behalf, as they were the assignees of the policy as collateral for the debt which I was authorized to collect, and, after deducting Seeligson's debt, to remit plaintiff the balance.” The court overruled defendant's objections and admitted the evidence so objected to.

The testimony introduced was quite too lengthy for insertion here.

C. L. Cleveland, for appellant, cited, on the admission of Harris' evidence: Mims v. Mitchell, 1 Tex., 443;Caldwell v. Haley, 3 Tex., 317;Hall v. Jackson, Id., 309;Wright v. Wright, Id., 168;Paul v. Perez, 7 Tex., 345;Denison v. League, 16 Tex., 408; Flanders on Ins., 527, 528; 5 Bennett's Ins. Cases, 164, 188; Texas Banking Co. v. Hutchins, 53 Tex., 61;Ins. Co. v. Lacroix, 45 Tex., 158; Story on Agency, sec. 134 et seq.; Livermore on Agency, 237; Bigelow on Estoppel, 480; Wood on Insurance, p. 411 et seq., and p. 834 et seq.; note 1 to p. 705; 3 Gill (Md.), 370.

On the absence of proper parties, he cited: McFadin v. MacGreal, 25 Tex., 79; G., H. & S. A. R. R. v. Freeman, 57 Tex., 156;Wetmore v. San Francisco, 44 Cal., 300; Gould on Pleading, p. 173, secs. 8 and 9; 1 Chitty on Pleading, p. 3; Spratley v. Hartford Ins. Co., 1 Dill. C. C., 392; 10 Cush., 351; 25 Ala., 355; 12 Ia., 287; 43 Mo., 434;111 Mass., 53;3 Md., 341.

Wheeler & Rhodes, for appellee, cited: Flanders on Fire Insurance, pp. 541, 542, 543, 587; 2 Phillips on Insurance, § 1973; also 1 Phillips, §§ 81, 82, 83, 85.

STAYTON, ASSOCIATE JUSTICE.

This action was brought by Coffee May 17, 1882, to recover on a policy of insurance against fire, issued by the appellant to Coffee & Pearson, on October 29, 1881, which, with consent of appellant, was transferred by Coffee & Pearson to appellee on January 21, 1881.

The action is brought by the appellee in his own name and right, as owner of the policy, but the evidence develops the fact that after the loss the appellee assigned the policy to George Seeligson & Co., probably as collateral security for a debt due by him to that company.

The exact manner in which the assignment was made does not appear, but under the evidence it must be deemed such an assignment as passed to Seeligson & Co. the title to the sum secured by the policy, even though they may hold it as a collateral security.

The general rule is, that the legal and beneficial owner of a demand is the proper person to sue upon it, but suits have been sustained when they are brought by the person holding the legal title, even though the beneficial ownership is in another, and this even though the holder of the legal title does not sue expressly for the use of the other.

In such cases a judgment against or in favor of the person holding the legal title, in the absence of fraud, would be binding on parties in interest; for permitting the apparent power to sue, which follows the legal title, to remain in one who has parted with the beneficial interest, is to be taken as giving to such person the power to bind all persons interested by an action brought to enforce the claim and prosecuted in good faith.

Such is not the attitude of this cause; so far as the record shows, the title, and consequent right to sue, had passed to Seeligson & Co. prior to the institution of the suit, and a judgment in favor of or against the appellee would not bind that company, unless it might be by way of estoppel, resulting from the fact that Seeligson & Co. may have directed the suit to be brought, and were really prosecuting it, though not nominally parties to it. Even if that were true, it could not be shown in this action, for Seeligson & Co. are not before the court, and in an action which might be hereafter brought by them, the appellant would be put to the trouble and expense of showing such facts as would or might make the judgment to be rendered in this case binding on them.

Such a course of procedure the law does not contemplate; and a debtor is entitled to have before the court, before a judgment can be rendered against him, such person or persons as plaintiffs as will make the judgment conclusive of the rights of all parties who have an interest in the debt, and he thus be relieved from further cost, vexation or liability.

Many authorities are to be found which hold that the assignee of a policy of insurance cannot maintain an action upon it in his own name; but those cases were decided in states in which the common law rule that the assignee of a chose in action cannot maintain a suit thereon in his own name was in force. Such is not the rule here, under arts. 266, 267, R. S. A policy of insurance is such an instrument in writing as, under these articles, may be assigned, and on which the assignee may maintain an action in his own name.

The assignment of such an instrument, after a loss, passes the legal title to it, and clothes the assignee with the sole power to sue upon it, he, however, being bound to allow every discount and defense against which it would have been subject in the hands of the previous owner before notice of the assignment was given to the defendant.

That the policy may have been assigned to Seeligson as collateral security for a debt does not change the rule. Wetmore v. San Francisco, 44 Cal., 300; Percy v. Merchants' Insurance Co., 25 Ala., 360; Carter v. Fire Insurance Co., 12 Iowa, 292; Archer v. Insurance Co., 43 Mo., 442;Insurance Co. v. Flack, 3 Md., 341;Carpenter v. Miles, 17 B. Mon., 601. (This last case is under a statute, but illustrates the principle.)

As the pleadings stand, the fact that the claim against the appellant, which, after the loss, was but a chose in action, had been assigned to Seeligson & Co., affords a defense to the action, Coffee being the sole plaintiff, and the court should have given the second instruction asked by the appellant.

If Coffee has any equitable interest in the claim he may be a proper party to the suit, but he cannot prosecute it as sole plaintiff.

“The amount of loss was payable sixty days after notice and proof of the same required by the company shall have been made by the assured, and received at its office, and the loss shall have been ascertained and proved in accordance...

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