F. H. Vahlsing, Inc. v. Hartford Fire Ins. Co., 10109.

• Decision Date: 11 August 1937
• Docket Number: No. 10109.,10109.
• Parties: F. H. VAHLSING, Inc., v. HARTFORD FIRE INS. CO.
• Court: Texas Court of Appeals

108 S.W.2d 947

F. H. VAHLSING, Inc., v. HARTFORD FIRE INS. CO.

No. 10109.

Court of Civil Appeals of Texas. San Antonio.

August 11, 1937.

Rehearing Denied October 6, 1937.

COPYRIGHT MATERIAL OMITTED

Appeal from Ninety-Second District Court, Hidalgo County; Bryce Ferguson, Judge.

Suit by the Hartford Fire Insurance Company against F. H. Vahlsing, Inc. From a judgment in favor of the plaintiff, the defendant appeals.

Affirmed.

L. L. Gragg and Brown & Bader, all of Edinburg, for appellant.

King, Wood & Morrow, of Houston, Strickland, Ewers & Wilkens and R. D. Cox, Jr., all of Mission, and H. Earl Cox, of Houston, for appellee.

SLATTON, Justice.

Hartford Fire Insurance Company sued F. H. Vahlsing, Inc., in the Ninety-Second district court of Hidalgo county, seeking to recover $17,509.25, to which suit the T. & N. O. Railroad Company was made a party.

It was alleged that the insurance company insured the T. & N. O. Railroad Company against loss by fire, and that fifteen railroad cars were damaged by fire while in the possession of the railroad company on the 8th day of February, 1935. It was asserted that the entire loss amounted to $27,586.97, and under the contract of fire insurance the railroad company carried the first $10,000 of such loss. It was further alleged that the insurance company had paid the railroad company the amount sued for and received from the railroad company written articles of subrogation.

Allegations were made that F. H. Vahlsing, Inc., a New York corporation, was engaged in the business of shipping vegetables from Elsa, Tex., that it had leased sheds and buildings from the railroad company located at Elsa, Tex., and that under the terms of the written lease contract the said F. H. Vahlsing, Inc., had agreed to be responsible for cars placed on the spur contiguous to its leased premises in the event of the damage or destruction of such cars by fire.

It was further alleged that the railroad company had refused to file suit against F. H. Vahlsing, Inc., and for such reason the railroad company was made a party defendant. Detailed allegations were made by the insurance company claiming all things necessary to have been done by the parties concerned to place legal liability upon F. H. Vahlsing, Inc., for the amount sued for.

F. H. Vahlsing, Inc., answered by general and special demurrer, general and special denial, and many allegations of negligence on the part of the railroad company, and that such negligence was the proximate cause of the fire and damage resulting therefrom.

The railroad company answered by disclaimer.

The cause was tried to a jury and in answer to special issues the trial court rendered judgment in favor of the appellee, Hartford Fire Insurance Company, and against F. H. Vahlsing, Inc., appellant, for the sum of $12,435.68.

The appellant, F. H. Vahlsing, Inc., perfected its appeal and is before this court with 183 assignments of error and 82 propositions predicated thereon, upon which it claims its right for reversal of the judgment entered by the trial court.

Appellant's first 10 propositions challenge the right of the insurance company to recover against it in the absence of pleading and proof, on the part of the insurance company, that the damage by fire was occasioned by the act or negligence of appellant, through its officers, servants, and employees.

The master policy which was issued to the T. & N. O. Railroad Company by the appellee had this provision: "This Company may require from the insured an assignment of all rights of recovery against any party for loss or damage to the extent that payment therefor is made by this Company."

The subsidiary policy delivered by appellee to the railroad company provided that "this policy is subsidiary to and forms a part of, but is not additional to, the general policy." The following provision with reference to subrogation is contained in such policy: "If this company shall claim that the fire was caused by the act or neglect of any person or corporation, private or municipal, this company shall, on payment of the loss, be subrogated to the extent of such payment to all right of recovery by the insured for the loss resulting therefrom, and such right shall be assigned to this company by the insured on receiving such payment."

The lease contract entered into by and between appellant and the railroad company, in article VI, provides: "Lessee further agrees to be responsible for cars placed for the use and benefit of or upon the request of the lessee whether said cars are owned by the lessor or others and in the event of their damage or destruction by fire originating on the premises of the lessee or through the negligence of the lessee's employees, agents or officers, the lessee agrees to promptly pay the value of said cars or the amount of such damages thereto on presentation of a bill therefor, according to the established practice of railroads in settling such matters among themselves. It is understood that this paragraph shall not impose upon the lessee the burden of paying for cars which may be damaged or destroyed by fire originating from the locomotives of lessor or by fire originating from negligence of lessor's officers or employees."

Appellant makes the contention that its lease contract with the railroad company is a contract of indemnity with reference to its liability to the railroad company for damage to cars occasioned by fire, and claims that the appellee by its contract of insurance with the railroad company, being one of indemnity, would not be subrogated to the rights of the railroad company in virtue of the appellant's relation of landlord and tenant to the railroad company,

In Joyce's The Law of Insurance (2d Ed.) vol. 5, p. 5913, it is said: "Where the insured has entered into a contract with third parties, by the terms of which such third parties are liable to the insured for any loss or damage to the property insured, the insurer will, upon payment of the loss, be entitled to be subrogated to the rights of the insured under the contract."

In 26 Corpus Juris, at page 458, § 620, it is said: "The right of subrogation is not limited to cases where the liability of the third person is founded in tort; but any right of the insured to indemnity will pass to the insurer upon payment of the loss."

The lease contract between the appellant and the railroad company, and particularly article VI, above quoted, provided that appellant "agrees to be responsible for cars placed for the use and benefit of or upon the request of the lessee * * * and in the event of their damage or destruction by fire originating on the premises of the lessee * * * the lessee agrees to promptly pay the value of said cars or the amount of such damages thereto on presentation of a bill therefor. * * *"

We construe this to mean an agreement to pay. The fire insurance contract, as between the insurance company and the railroad company, provided that the railroad company might be required to assign whatever right it might have against a third party upon the payment of the loss by the insurance company. The insurance company paid the loss to the railroad company and it in turn delivered to the insurance company an assignment of whatever cause of action it had as against the appellant. It then follows that, if the railroad company would be entitled to recover for the loss as against the appellant, the insurance company in this action stands in its shoes and would also be entitled to recover. See Chicago, St. Louis & New Orleans R. R. Co. v. Pullman Southern Co., 139 U.S. 79, 11 S.Ct. 490, 35 L.Ed. 97; 5 Tex.Jur. p. 7; Cooley's Briefs on Insurance (2d Ed.) vol. 7, p. 6686; Hartford Fire Insurance Co. v. Galveston, H. & S. A. Ry. Co. (Tex. Com.App.) 239 S.W. 919.

Then, too, the railroad company under the quoted provision of the lease had a good cause of action against appellant for the destruction by fire of the cars. It had a right to assign such cause of action. 5 Tex.Jur. p. 7.

It could make no difference to the rights of appellant that the consideration for the assignment was the payment by the insurance company to the railroad company of the amount for which appellee was liable under its policies of fire insurance. 5 Tex. Jur. p. 27. It is said: "An assignee of a chose in action who sues the assignor in respect thereof must show that a consideration passed. This is upon a principle well settled in the law of contracts. But if the action is against the original obligor, the assignee may recover without such a showing, consideration for the transfer being no affair of the obligor, for it can make no difference to him whether recovery is by the assignor or by the assignee." See Iowa State Insurance Co. v. Missouri Southern Ry. Co., 223 Mo.App. 148, 9 S.W.(2d) 255.

Appellant also contends that in any event the appellee would only be entitled to recover of it such portion of the amount found by the jury as being the damages suffered by the railroad company that was in excess of the railroad company's retention of the first $10,000 of any loss. The contract of insurance between the railroad company and the appellee provided that the railroad company retained the first $10,000 of the loss of any one fire, and the record shows that the loss here was more than $27,000, and that the insurance company paid the railroad company such amount less the $10,000.

In 6 Blashfield's Cyclopedia of Automobile Law and Practice (Permanent Edition), page 508, it is said: "If the amount of damages set by the jury is less than or equal to the insurance paid, the insurer is the sole owner; if the amount is greater, the insurer is only a partial owner."

The amount fixed by the jury in the case before us was less than the amount paid by the insurance company. We think, from the authorities, that the appellee is the sole owner thereof. Patitucci v. Gerhardt, 206 Wis. 358, 240 N.W. 385; Terry v. Reciprocal Exchange (Mo.App.) 268 S. W. 421; ...