American Indemnity Co. v. G. A. Stowers Furniture Co.

• Court: Texas Court of Appeals
• Writing for the Court: Graves
• Citation: American Indemnity Co. v. G. A. Stowers Furniture Co., 39 S.W.2d 956 (Tex. App. 1931)
• Decision Date: 16 April 1931
• Docket Number: No. 9529.,9529.
• Parties: AMERICAN INDEMNITY CO. v. G. A. STOWERS FURNITURE CO.

39 S.W.2d 956

AMERICAN INDEMNITY CO. v. G. A. STOWERS FURNITURE CO.

No. 9529.

Court of Civil Appeals of Texas. Galveston.

April 16, 1931.

Rehearing Denied May 21, 1931.

Appeal from District Court, Harris County; Chas. E. Ashe, Judge.

Action by the G. A. Stowers Furniture Company against the American Indemnity Company. Judgment for plaintiff, and defendant appeals.

Affirmed.

King, Wood & Morrow, Fouts, Amerman, Patterson & Moore, and Joe Moore, all of Houston, for appellant.

Fulbright, Crooker & Freeman, and Atkinson & Gaugler, all of Houston, for appellee.

GRAVES, J.

This is the second appeal of this cause; the result in both appellate courts of the first one, in which the position of the parties as litigants was the reverse of that now appearing, being reported through this court's opinion in 295 S. W. 257, and the Supreme Court's in 15 S.W.(2d) 544, respectively. The suit is between the same two private corporations on the same $5,000 policy of automobile indemnity insurance as applied to the same transaction; that is, to the prior payment by the Stowers Company, the insured, of a judgment in excess of $14,000 Miss Mamie Bichon had obtained against it as the result of a collision with one of its autotrucks that the policy covered. The sole issue involved is whether or not the appellant indemnity company is liable to the appellee insured company for the claimed consequence of the former's alleged negligence in failing to make a $4,000 settlement of her cause of action Miss Bichon offered during the pendency of but before judgment in the suit thereon that so terminated.

This court on the former appeal construed the policy as importing no such legal liability, and limited the indemnity company's obligation thereunder to a faithful defense of the Bichon suit. G. A. Stowers Furniture Co. v. American Indemnity Co., 295 S. W. 257, at page 261 (2). The Supreme Court, however, disapproved that, and remanded the cause, holding that, as a matter of law under the terms of the policy, the insurer should respond in such damages as proximately resulted, "if an ordinarily prudent person, in the exercise of ordinary care, as viewed from the standpoint of the assured, would have settled the case, and failed or refused to do so." G. A. Stowers Furniture Co. v. American Indemnity Co. (Tex. Com. App.) 15 S.W.(2d) 544, 547.

On the trial from which the present appeal proceeds, the learned and experienced trial judge tracked that decision by submitting the fact...