Federal Ins. Co. v. Bock, 51

• Decision Date: 10 September 1964
• Docket Number: No. 51,51
• Citation: 382 S.W.2d 305
• Parties: FEDERAL INSURANCE COMPANY et al., Appellants, v. George F. BOCK et al., Appellees.
• Court: Texas Court of Appeals

Page 305

382 S.W.2d 305

FEDERAL INSURANCE COMPANY et al., Appellants, v. George F. BOCK et al., Appellees.

No. 51.

Court of Civil Appeals of Texas, Corpus Christi.

Sept. 10, 1964.

Rehearing Denied Oct. 8, 1964.

J. S. Covington, Jr., and Newton Gresham, of Fullbright, Crooker, Freeman, Bates & Jaworski, Houston, for appellant.

Ross Meredith, of Webb, Webb & Meredith, Elgin, Allen McMurrey, of Maynard & McMurrey, Bastrop, for appellee.

GREEN, Chief Justice.

In a trial before the court on a written stipulation of facts, appellees, hereafter referred to as Bock, recovered judgment against appellants, hereafter called Federal, from which Federal appeals. We affirm.

At all times concerned, Bock was actively engaged in the business of processing and cold storage of meats at the Bock Building in Galveston. For this purpose cold storage vaults refrigerated by electrically powered machinery were used, with the electricity furnished solely by Houston Lighting and Power Company. Prior to and on September 11, 1961, and thereafter, the refrigerating machinery and all of its electrical equipment were in good operating condition and capable of keeping all meats in the vaults from spoiling if supplied with the customary amount of electricity. On or about 3:00 p. m., Monday, September 11, 1961, the electrical transmission lines of Houston Lighting and Power Company from the mainland to Galveston were damaged, approximately five miles from Bock's building, by the winds of Hurricane Carla, resulting in a complete stoppage of electricity to the city of Galveston, and to Bock. Power was not restored to Bock until about 11:45 a. m., Thursday, September 14, 1961. The resulting lack of refrigeration caused the temperature in the cold storage vaults to rise, resulting in loss of from 10% to 15% of the meat, being an agreed money loss of $2,418.36. Hurricane Carla did no damage to the Bock Building or to any of its refrigerating or electrical equipment. It was stipulated that enither Bock nor any other person or corporation did any act or left undone any act which caused, aggravated or extended in any way the loss sustained by Bock. There was no dispute concerning the failure of Bock or of any other person or corporation to take the necessary precautions, in so far as they could possibly do so, to prevent the loss.

At the time of the loss, the meat inventory of Bock in the building was insured by Federal under policies which stated, in part, as follows:

'(Federal) does insure (Bock) against direct loss resulting from * * * windstorm, hurricane * * *'.

In its decree granting Bock recovery, the trial court made the following express finding:

'That the term '* * * direct loss by windstorm and hurricane * * *' as used in the insurance policies issued by the defendants in insuring the plaintiffs includes the losses suffered by the plaintiffs, same being losses occasioned by wind-caused interruption to power supply resulting in spoilage of coldstorage meats.'

The issue we are called upon to decide is whether the trial court erred in his holding that the provision in the policies 'direct loss resulting from * * * windstorm, hurricane' includes the loss sustained by Bock.

Both parties agree that they have found no Texas case interpreting the meaning of 'direct loss' in an insurance policy where the peril insured against (the hurricane) (1) acts upon uninsured property (the transmission lines) (2) at a significant distance from the point of ultimate loss (five miles) (3) at a time significantly in advance of the actual loss (the winds died down in a few hours, but the power remained off for three days, causing the heat to rise gradually and spoil the meat) (4) but which peril is within the chain of events leading to the loss. We feel, however, that there are a number of Texas decisions which show the Texas trend to support the ruling made by the trial court under the the fact situation presented.

In Hall v. Great National Lloyds, 154 Tex. 200, 275 S.W.2d 88, the Supreme Court stated:

'In construing the terms of the policy, we shall determine the everyday meaning of the words and in 'common parlance' and "the usual and popular understanding of the terms" used. U. S. Ins. Co. v. Boyer, Tex. , 269 S.W.2d 340, 341; Security Ins. Co. v. Sellers-Sammons-Signor Motor Co., 1921, Tex.Civ.App., 235 S.W. 617, refused. If the terms of the contract are susceptible of more than one meaning they will be construed strictly against the insurer.'

See, also, Trahan v. Southland Life Insurance Co., 155 Tex. 548, 289 S.W.2d 753.

The courts recognize a distinction between the terms 'loss' and 'direct loss' as used in an insurance policy. Travelers Indemnity Company v. Jarrett, Tex.Civ.App., 369 S.W.2d 653, n. w. h. However, we have found no Texas authority which gives 'direct loss' the restricted meaning as contended for by Federal, to-wit, 'a loss by reason of the operation of the force of the designated peril upon the insured object.' A proper definition of 'direct loss' is 'loss proximately caused by the peril insured against', and the term 'proximate cause' as applied in insurance cases has essentially the same meaning as it does in negligence cases, except that in insurance cases, the element of foreseeableness or anticipation of the injury as the result of the peril insured against is not required. Reliance Insurance Co. v. Naman, 118 Tex. 21, 6 S.W.2d 743; Federal Life Ins. Co. v. Raley, 130 Tex. 408, 109 S.W.2d 972; Provident Life & Accident Ins. Co. v. Holt, Tex.Civ.App., 27 S.W.2d 556; Camden Fire Ins. Ass'n v. Moore, Tex.Civ.App., 206 S.W.2d 104, writ ref. n. r. e.; Farmers Insurance Exchange v. Wallace, Tex.Civ.App., 275 S.W.2d 864, writ ref. n. r. e. Thus, in a suit on a policy insuring for 'direct loss' caused by the named peril, a proper definition of proximate cause would be 'that cause which in a natural and continuous sepauence unbroken by any new and intervening cause, produces a loss, and without which the loss would not have occurred.' Provident Life & Accident Ins. Co. v. Holt, supra; 32 Tex.Jur.2d, Insurance, Sec. 365, pp. 562 et seq.

United States Insurance Company of Waco v. Boyer, 153 Tex. 415, 269 S.W.2d 340, was a suit upon the collision clause of a standard automobile policy. While the insured car was parked on a downtown street in Waco, a windstorm demolished a building, and the car was crushed under falling brick and timbers. The car was not damaged by the winds blowing directly against it. The car owner did not purchase windstorm insurance but did have collision insurance. The 'windstorm provision' would pay 'for direct and accidental loss of or damage to the automobile, hereinafter called loss, caused by windstorm * * *.' The Suprme Court reversed a judgment for plaintiff...