Columbian Nat. Fire Ins. Co. v. Dixie Co-Op. M. O. House

• Decision Date: 14 October 1925
• Docket Number: (No. 520-4198.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 276 S.W. 219
• Parties: COLUMBIAN NAT. FIRE INS. CO. et al. v. DIXIE CO-OP. MAIL ORDER HOUSE et al.
• Court: Texas Supreme Court

276 S.W. 219

COLUMBIAN NAT. FIRE INS. CO. et al. v. DIXIE CO-OP. MAIL ORDER HOUSE et al.

(No. 520-4198.)^*

Commission of Appeals of Texas, Section B.

October 14, 1925.

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

Action by the Dixie Co-Operative Mail Order House against the Columbian National Fire Insurance Company and others. Judgment for plaintiff against all but one of defendants was reformed and affirmed in the Court of Civil Appeals (261 S. W. 174), and they bring error. Affirmed.

Thompson, Knight, Baker & Harris, of Dallas, and Andrews, Streetman, Logue & Mobley, of Houston, for plaintiffs in error.

Vinson, Elkins, Woods & Pollard, and Taliaferro & Sonfield, all of Houston, for defendants in error.

SPEER, J.

The Dixie Co-operative Mail Order House brought this suit against the United Mutual Fire Insurance Company and nine other fire insurance companies to recover the sum of $6,810.29, alleged to be the balance due upon a loss caused by fire to property of plaintiff, upon which each of the defendants had issued its policy of insurance, the aggregate of such policies being $68,000. The plaintiff's petition alleged the amount of each policy, and that, under the terms of such policies, each company was liable to it for its pro rata share of any loss by fire; that during the life of said policies it sustained a loss by fire; that all of the defendants except the United Mutual Fire Insurance Company recognized their liability and entered into an agreement with the plaintiff to the effect that the amount of plaintiff's loss was $46,310; that the United Mutual Fire Insurance Company did not participate in the adjustment, that company denying its liability upon the ground its policy had been canceled prior to the fire for nonpayment of the premium. It alleged that the plaintiff and the other nine defendant companies, assuming that the United Mutual Fire Insurance Company was liable notwithstanding its denial, apportioned the said $46,310 to the ten defendants, the share apportioned to the United Mutual Fire Insurance Company being $6,810.29; that under the arrangement the damaged goods were salvaged through the Underwriters Salvage Company for the benefit of the insurance companies, and the share of such salvage apportioned to the United Mutual Fire Insurance Company was $2,182.87. The nine defendant companies acknowledging liability paid to the plaintiff the respective portions allotted to them, and took from it a release in full of all liability.

The plaintiff sought primarily to recover the $6,810.29 from the United Mutual Fire Insurance Company, and, in the alternative, if its policy was not a valid policy, to recover said amount from the remaining nine defendants. It also garnished the salvage company as against the United Mutual Fire Insurance Company to reach the $2,182.87 held by it. All of the insurance companies except the United Mutual Fire Insurance Company filed a joint answer tendering the issues that the policy of the United Mutual Fire Insurance Company was a valid policy and that company liable to plaintiff, and further an accord and satisfaction by reason of the adjustment and payment above mentioned; the United Mutual Fire Insurance Company answered pleading that it was not liable to the plaintiff because the premium on its policy was never paid to it, and that the policy was canceled by it prior to the fire. The trustee in bankruptcy for the Dixie Co-operative Mail Order House intervened and joined with plaintiff in seeking to recover. The Underwriters Salvage Company answered and admitted that it held $2,182.87, part of the proceeds of the damaged property under the arrangement above set out.

The case was tried without a jury, and resulted in a judgment that the plaintiff take nothing against the United Mutual Fire Insurance Company, and that it recover of the other defendants judgment for specific sums aggregating $6,810.29, the same to be credited with $2,182.87, for which sum it had judgment against the garnishee, the salvage company. The trial court likewise allowed the salvage company an attorney's fee of $100, and taxed the same as cost against the defendants other than the United Mutual Fire Insurance Company. The defendants who suffered judgment appealed to the Court of Civil Appeals, and that court, upon a slight reformation of the judgment as to interest allowed, affirmed the judgment of the trial court. 261 S. W. 174. The cause is now before us upon writ of error granted to the judgment of affirmance by the Court of Civil Appeals.

Plaintiffs in error's first group of assignments raises the point that the United Mutual Fire Insurance Company is liable to the plaintiff, for which reason they are in no event liable, and the judgments of the trial court and the Court of Civil Appeals therefore erroneous. This involves a consideration of the authority of the local agents of that company to accept a belated payment of the premium. The agreed statement of facts contains the following:

"On April 15, 1920, the Parlati & Del Barto Insurance Agency were the duly authorized agents of the United Mutual Fire Insurance Company. On that date, through that agency the plaintiff contracted for a one-year fire insurance policy. The policy was issued, and was for $10,000, and described the plaintiff's stock. The premium on the policy was $109, and was not promptly paid to the agents issuing the policy. On June 5, 1920, the United Mutual Company notified the plaintiff by registered letter that the policy had been canceled for nonpayment of the premium. This notice was received June 7, 1920. This letter provides: `Please take notice that your policy of insurance No. 94012, issued by the United Mutual Fire insurance Company through Parlati Insurance Agency, its agents at Houston, Tex., and dated the 15th day of April, 1920, is hereby canceled, and that five days after this notice the same will close and be of no effect.' * * * On June 21, 1920, the plaintiff sent to Parlati & Del Barto Insurance Agency its check for $109 in payment of the premium under policy No. 94012. This check was cashed by said agency. Neither this sum nor any part of it has been refunded to plaintiff. At the time the check was sent, the agency of...