St. Paul Fire & M. Ins. Co. v. GARZA COUNTY W. & M. ASS'N., 8486.

• Decision Date: 13 January 1938
• Docket Number: No. 8486.,8486.
• Citation: St. Paul Fire & M. Ins. Co. v. GARZA COUNTY W. & M. ASS'N., 93 F.2d 590 (5th Cir. 1938)
• Parties: ST. PAUL FIRE & MARINE INS. CO. v. GARZA COUNTY WAREHOUSE & MARKETING ASS'N.
• Court: U.S. Court of Appeals — Fifth Circuit

93 F.2d 590 (1937)

ST. PAUL FIRE & MARINE INS. CO. v. GARZA COUNTY WAREHOUSE & MARKETING ASS'N.

No. 8486.

Circuit Court of Appeals, Fifth Circuit.

December 9, 1937.

Rehearing Denied January 13, 1938.

L. E. Elliott, of Dallas, Tex., for appellant.

Dan MacDougald, of Atlanta, Ga., and Austin Y. Bryan, Jr., of Houston, Tex., for appellee.

Before SIBLEY, HUTCHESON, and HOLMES, Circuit Judges.

HUTCHESON, Circuit Judge.

The suit was on a fire policy issued by appellant as insurer to appellee as assured, covering cotton held by the assured in trust or on commission, or in storage for the account of customers while contained in plaintiff's warehouse. The claim was that, while so covered, cotton there was on January 17, 1936, destroyed by fire.

Defendant admitted the making of the contract. It defended on the ground that by paragraph 7 of its policy it was provided: "It is understood and agreed that this insurance does not cover any cotton on which the owner has other insurance which would attach if this insurance had not been issued, except on the value, if any, in excess of such insurance"; that the owners of the cotton involved, one lot of 35, and one of 119 bales, had had insurance taken out, as to the 35 bales by Karbach-Biebers, with the Insurance Company of North America, and as to the 119 bales, by Commodity Credit Corporation, with Hartford Insurance Company, which would have attached if defendant's policy had not been issued; and that the Hartford Company, the insurance carrier on the 119 bales, was prosecuting the suit against defendant in plaintiff's name.

Plaintiff in rebuttal asserted of the Hartford policy: (1) That it was one insuring against "errors and omissions," in effect an "excess insurance" policy; (2) that it was not owner, but mortgagee insurance, issued for the benefit of, and protecting loans made by, Commodity Credit, pledgee; (3) that defendant, when it issued its policy, knew of the Hartford policy, knew that the Commodity Credit had issued instructions requiring warehouses to carry insurance on all cotton on which it had loans, and had procured a Hartford policy protecting itself against errors and omissions; (4) that, knowing these facts, it had issued its policy as, and intending it to be, primary insurance; and that, having done so, it is now estopped to claim that the Hartford policy is "other insurance" within the meaning of the exception.

In rebuttal as to the 35 bales owned and insured by Karbach-Biebers, plaintiff asserted that the North American policy Karbach carried provided that it "should be void to the extent of any other insurance, directly or indirectly covering the same property, whether prior to or subsequent in date," and that being conditioned to be void in the event of other insurance, it could not itself be "other insurance" within the meaning of the clause.

The case was tried to the court without a jury. At the conclusion of the evidence the defendant moved for a general judgment, and, in the alternative, made separate motions for judgment as to the Karbach-Biebers cotton and as to the Commodity Credit cotton. All of these motions were overruled, and the District Judge, upon full findings of fact and law, rendered judgment for the plaintiff, with interest from a date sixty days after the loss had occurred.

This appeal tests whether there was error in denying the plaintiff's general motion for judgment, and whether there was any in denying the separate motions.

As to the Karbach-Biebers 35 bales of cotton, this appeal raises only one question, whether the provision in its policy, that it would be void if any other insurance was taken out, prevented its being within the meaning of clause 7 of defendant's policy, "other insurance which would attach if this insurance had not been issued"; whether, in short, defendant's policy was, as to this cotton, primary or excess insurance.

As to the 119 bales, as to which Commodity Credit Corporation carried insurance with the Hartford Company, four questions arise: (1) Whether the Hartford policy was "other insurance which would attach if this insurance had not been issued"; (2) whether Commodity Credit Corporation was the owner of the cotton, so as to make the Hartford policy owner's insurance; (3) whether, if Commodity Credit was not the owner, the insurance was gotten by it for owner's benefit so as to make it owner's insurance within the exception; (4) whether, if the Hartford policy on its face be "other insurance" within the meaning of the excepting clause, the facts found by the court as to defendant's knowledge and actions when and after it issued its policy support the finding of waiver, and of estoppel to raise this defense.

Taking up, first, the Karbach-Biebers cotton, we are of the opinion that the insurance on it was within the excepting clause "other insurance"; that as to it appellant's policy is not primary,...