Austin Fire Ins. Co. v. Adams-Childers Co.

• Decision Date: 03 January 1923
• Docket Number: (No. 337-3705.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 246 S.W. 365
• Parties: AUSTIN FIRE INS. CO. v. ADAMS-CHILDERS CO.
• Court: Texas Supreme Court

246 S.W. 365

AUSTIN FIRE INS. CO. v. ADAMS-CHILDERS CO.

(No. 337-3705.)^*

Commission of Appeals of Texas, Section B.

January 3, 1923.

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

Action by the Adams-Childers Company against the Austin Fire Insurance Company. Judgment for plaintiff was affirmed by the Court of Civil Appeals (232 S. W. 339), and defendant brings error. Affirmed.

Thompson, Knight, Baker & Harris, of Dallas, for plaintiff in error.

J. K. Baker and Snodgrass & Dibrell, all of Coleman, for defendant in error.

POWELL, J.

As early as 1914 the Austin Fire Insurance Company was insuring the firm of Adams & Childers of Santa Anna, Tex., which firm was engaged in a large mercantile business, against loss to their stock of goods by fire. In 1915, before the 1914 policy issued by said company in favor of said mercantile firm was to expire, one Stockard, as agent of the insurance company, solicited additional insurance business from said firm. At that time it was agreed by and between the said Stockard and said mercantile firm that the former, as agent, would renew and keep alive, from year to year, the insurance policies written by him in the various companies he represented, including this additional business; that he (the said agent) would renew these policies, or advise said firm before expiration that he could not do so, unless the firm itself advised him in the meantime not to renew them.

In compliance with aforesaid agreement, the Austin Fire Insurance Company did renew its policies in favor of Adams & Childers in September, 1915 and 1916. Stockard relieved the insured of the burden of keeping up with the expiration of their insurance policies in return for the increased insurance business given him and the companies he represented.

Early in 1917, Adams & Childers incorporated their partnership business under the name of the Adams-Childers Company. After doing so, and about February 16, 1917, the new corporation advised Stockard of its changed status, and the insurance policies in favor of the partnership firm were all properly indorsed accordingly. The mercantile corporation at the same time renewed its contract and understanding with Stockard, as agent, and it was agreed by the latter that he would look after the renewal of the policies of the insured corporation as he had done in the past for the insured partnership firm.

However, when the $4,000 policy issued by the Austin Fire Insurance Company on the stock of goods in the main store of the company expired on September 27, 1917, Stockard did not renew the policy, as per his agreement aforesaid. Consequently, defendant in error had no policy with plaintiff in error at the time former's stock of merchandise was destroyed by fire on October 12, 1917.

Defendant in error, after the fire, presented a claim to the insurance company for the $4,000 due under a policy it alleged the company had agreed to renew. The insurer denied liability, whereupon the mercantile corporation filed its suit in the district court of Coleman county, Tex., to enforce its claim and recover under said policy, just as if it had actually been renewed, issued, and delivered.

The case was tried in the district court before a jury. The special issues submitted to the jury and the answers of the jury thereto are as follows:

"Question No. 1. Did L. V. Stockard as the agent of the Austin Fire Insurance Company, for said company, make an agreement with G. E. Adams, for the Adams-Childers partnership, that the policies of insurance, if any, then held by said firm in said company, would be renewed when they expired, for a period of one year, and that policies would not be permitted to expire but would be kept in force by renewing for another year from the date of the expiration of the policy, and unless so advised to the contrary, a renewal of the policy would be issued for another term of one year and be delivered to the bookkeeper of the firm upon agreement of the firm to pay when delivered whatever amount of annual premium was due on each policy, such policies to be for the same amount as the policies expiring and upon the same terms as the one expiring, and was this to be done from year to year as to all policies expiring in defendant company, if no notice was given to the contrary? Answer this question Yes or No. Yes.

"Question No. 2. Did L. V. Stockard as agent for the Austin Fire Insurance Company, for said insurance company, on or about February 16, 1917, make an agreement with G. E. Adams, acting for Adams-Childers Company, if any, that the insurance transferred to the company would be continued with said company in the same way and upon the same terms as had been done with the partnership of Adams & Childers? Answer this question Yes or No. Yes.

"Question No. 3. Did L. V. Stockard as agent for the Austin Fire Insurance Company for said company, on or about February 16, 1917, make an agreement with S. W. Childers, acting for the Adams-Childers Company, if any, that the insurance transferred to the company would be continued with said company or corporation in the same way and upon the same terms as it had been with the partnership of Adams & Childers? Answer this question Yes or No. Yes.

"Question No. 4. Did L. V. Stockard have authority from defendant Austin Fire Insurance Company, to make such agreement, if any you find were made? Answer this question Yes or No. Yes.

"Question No. 5. Did L. V. Stockard have apparent authority as agent for the Austin Fire Insurance Company, to make such agreement, if any you find were made? Answer this question, Yes or No. Yes.

"Question No. 6. Did G. E. Adams inform L. V. Stockard not to renew any more insurance policies as they expired, for the Adams-Childers Company, and that he was going to place the insurance with some reciprocal underwriters or mutual companies? Answer this question Yes or No. No.

"Question No. 7. Did L. V. Stockard fail to renew the policy in the Austin Fire Insurance Company, being policy No. 136310, expiring September 27, 1917, in the sum of $4,000, because G. E. Adams for the plaintiff told him (Stockard) that he should not renew the policies carried by said Stockard which expired in August and September, 1917, as Adams intended to take out the insurance in reciprocal underwriters or mutual companies? Answer this question, Yes or No. No."

Upon the aforesaid answers of the jury, the trial court entered judgment in favor of the Adams-Childers Company, and against the Austin Fire Insurance Company, for $4,000 and interest. The insurance company then brought the case by writ of error to the Court of Civil Appeals at Austin. That court, in an opinion by Chief Justice Key, affirmed the judgment of the district court. See 232 S. W. 339. The insurance company's application for writ of error was granted, and the cause is now before us for examination and recommendation.

In the Supreme Court, the plaintiff in error abandons many of the contentions urged by it in the district court and Court of Civil Appeals and presents here but one assignment of error. That assignment is to the effect that the trial court erred in refusing to peremptorily instruct the jury to return a verdict in its favor. This one assignment of error is divided into several propositions which may be grouped into three principal contentions. We shall now discuss these three in turn.

In the first place, plaintiff in error says that Stockard was not authorized by it, as its agent, to look after the expirations of defendant in error's policies in its company; that, if he made any such agreement and assumed any such burden, it was on his own account personally and not binding on his principal; that if any one was liable to defendant in error in damages for dereliction of duty or breach of contract, it was Stockard, individually and alone. The contention of the insurance company is that these theories just presented are established by the undisputed testimony. Certain terms of the contract made by agent Stockard with the insured are undisputed. For instance, he himself sets out such provisions, as follows:

"In that conversation that I had with them, I did tell them that I would, on the policies then existing or that might thereafter be issued by me, renew them from time to time, and keep them renewed from time to time, unless they directed me not to do so. I told them that I would keep the policies renewed and not let them expire on him without giving him notice."

From this quotation it is clear that Stockard agreed to keep these policies renewed or advise the insured of his inability to do so, unless the insured company, itself, should advise him in advance not to issue the policies. In other words, Stockard relieved the insured of the necessity of keeping up with its policies and the dates of their expirations. It was further undisputed that Stockard was to deliver the policies in due course, after issuance, to the bookkeeper of insured, who was authorized to pay the premiums demanded by the insurance company from year to year. Stockard did not deny his obligation to look after these renewals. He attempted to excuse himself for failing to renew the policy in suit by testifying that he did not renew it because the insured directed him not to do so. The jury, upon conflicting evidence in this connection, found against this contention of Stockard. The jury also found, likewise upon conflicting testimony, that Stockard, as agent of said company, agreed to renew this very policy in the Austin Fire Insurance Company, and not merely in any company represented by Stockard and to be chosen by him. The jury further decided that Stockard had actual authority, as well as apparent authority, to make this contract with defendant in error to renew the policy in suit.

These findings of the jury were approved by the trial court in awarding judgment against the insurance company. They were acquiesced in by the Court of Civil...