Central Federal Fire Ins. Co. v. Lewis

• Decision Date: 10 February 1930
• Docket Number: No. 9343.,9343.
• Parties: CENTRAL FEDERAL FIRE INS. CO. v. LEWIS et al.
• Court: Texas Court of Appeals

26 S.W.2d 474

CENTRAL FEDERAL FIRE INS. CO. v. LEWIS et al.

No. 9343.

Court of Civil Appeals of Texas. Galveston.

February 10, 1930.

Rehearing Denied February 27, 1930.

Appeal from District Court, Harris County; Walter E. Monteith, Judge.

Action by Mell Lewis against the Central Federal Fire Insurance Company, in which A. W. Kloppenburg and others intervened. From the judgment for plaintiff and interveners, defendant appeals.

Affirmed.

Burgess, Burgess, Chrestman & Brundidge and L. E. Elliott, all of Dallas, for appellant.

Hunt & Hunt and H. G. Butts, all of Houston, for appellee Lewis.

Charles Fertsch, of Hallettsville, and Walter F. Brown, of Houston, for appellees Kloppenburg and others.

GRAVES, J.

The insurance company, defendant below, appeals from a $12,856.38 judgment in favor of Mell Lewis, plaintiff, and A. W. Kloppenburg et al., interveners below, of which total $8,484.45 was apportioned to Lewis and $4,371.93 to Kloppenburg and two others in the aggregate, rendered by the court, as for the maturity of its obligations to them under two policies of insurance issued by it to Lewis as the owner of a furnished brick hotel building at Hallettsville, Tex., with a "loss payable" clause in favor of interveners as holders of a mortgage on the building, whereby it agreed to pay him for the total destruction of the properties by fire $10,000 on the building and $2,500 on the furniture, fixtures, and equipment, upon its own findings and this verdict of a jury:

"Special Issue No. 1. Would a reasonably prudent owner, uninsured, desiring such a structure as the one owned by Mell Lewis in Hallettsville, Texas, was before the fire, in proceeding to restore the building to its original condition have utilized the portions of said building left standing after said fire? To which the jury answered: `He would not.'

"Special Issue No. 2. What was the actual cash value of the premises in question at Hallettsville, Texas, just prior to the fire on October 27, 1927? To which the jury answered: `$15,000.00.'

"Special Issue No. 3. What was the actual cash value of the premises in question at Hallettsville, immediately after said fire? To which the jury answered: `$1,800.00.'

"Special Issue No. 4. What was the actual cash value of the personal property situated in said hotel and destroyed by fire on October 27, 1927? To which the jury answered: `$2,416.00.'"

The litigants will be designated as they severally were in the trial court.

Although the terms of the policies required that as a condition precedent, no proofs of loss resulting from the fire, which occurred on 27th day of October, 1927, and destroyed at least the main superstructure of the building, together with all its insured contents, were ever made, the plaintiff relying upon and the court finding that such a denial of liability as rendered such proofs unnecessary had been seasonably made by the defendant through its state manager.

In this court the defendant contends:

(1) That its requested peremptory instruction for a verdict in its favor as against the plaintiff, Mell Lewis, should have been given, because (a) the undisputed testimony shows that, long after the alleged denial of liability by its state manager, Parsons, and after the receipt by him of advices from its attorneys that the company was not required to definitely state its attitude toward liability until proofs of loss had been furnished, and when the filing would have been within time, the plaintiff refused to furnish such proofs on the ground that notice of loss had been given and that proofs thereof were unnecessary by reason of the fact that the loss was total; (b) it conclusively appears from letters of plaintiffs' counsel demanding definite action of adjustment, or denial of liability, that he did not fail to furnish the required proofs of loss because of the alleged denial of liability by defendant's state manager, Parsons, nor in any way rely thereon to his injury; (c) the plaintiff wholly failed to prove that the building was a total loss, as he alleged, there being no evidence that the rock foundation of it was either in any way damaged by the fire, or that it could not have been used as a basis for reproducing thereon such a building as existed before the fire.

These propositions are overruled. In the first place, the pleadings and evidence were amply sufficient to show that, within the time specified in the policies sued on for furnishing proofs of loss, the defendant, through its admitted state manager, Parsons, not only first notified the plaintiff that it denied liability under and would not pay the policies, but later requested him to surrender them to it; this action upon the insurer's part constituted an anticipatory breach of its contract, rendered proofs of loss unnecessary, and conferred an immediate cause of action upon the insured. Oklahoma Fire Ins. Co. v. McKey (Tex. Civ. App.) 152 S. W. 440; Fire Ass'n of Philadelphia v. Jones (Tex. Civ. App.) 40 S. W. 44, 46; Connecticut Fire Ins. Co. v. Hilbrant (Tex. Civ. App.) 73 S. W. 558; Scottish Union & Nat. Ins. Co. v. Moore, 36 Tex. Civ. App. 312, 81 S. W. 573; Merchants' Ins. Co. v. Nowlin (Tex. Civ. App.) 56 S. W. 198; Delaware Underwriters v. Brock, 109 Tex. 425, 211 S. W. 779; Georgia Home Insurance Co. v. Jacobs, 56 Tex. 372; Fidelity Phoenix Fire Insurance Co. v. Oldsmobile Sales Co. (Tex. Civ. App.) 261 S. W. 492; Fireman's Fund Insurance Co. v. Galloway (Tex. Civ. App.) 281 S. W. 283.

The denial of liability testified to was to the plaintiff himself, was unequivocal and absolute, whereupon the rights of the parties became fixed in the stated legal effect resulting from it, as well as from the demand for surrender of the policies, which was not waived by letters from his attorney urging adjustment of the loss, or giving other reasons for the claim that proofs thereof were not necessary.

Furthermore, the advice by letter from its attorneys to plaintiff, relied upon in this connection by the defendant company, did not undertake to withdraw this previously made and unqualified denial of liability direct to the plaintiff himself, nor did it request the plaintiff to furnish any proofs of loss; the only information being that, if he wished to do so, he could file them, in which event he would have to wait sixty days longer before taking action against the company. Obviously the right to sue, already acquired as a result of the anticipatory breach of the contract, was not abrogated by these mere unilateral suggestions.

In the second place, such a denial of liability having been shown, which in itself constituted an anticipatory breach of the contract, it was unnecessary for the plaintiff to go further and prove that he relied upon that denial and would otherwise have filed the proofs of loss; in any event, however, instead of being conclusive the other way, we think the evidence in his behalf, especially the testimony of his attorney that he did not know proofs had not been filed until he got the previously discussed letter from the insurer's attorneys, dated January 14, 1928, after which he did not file any because liability under the policies had been denied, was sufficient to establish...