Fidelity Lloyds of America v. Geddie

• Decision Date: 25 June 1927
• Docket Number: (No. 803-4833.)
• Citation: 296 S.W. 500
• Parties: FIDELITY LLOYDS OF AMERICA v. GEDDIE.
• Court: Texas Supreme Court

296 S.W. 500

FIDELITY LLOYDS OF AMERICA v. GEDDIE.

(No. 803-4833.)

Commission of Appeals of Texas, Section B.

June 25, 1927.

Certified Questions from Court of Civil Appeals of Eighth Supreme Judicial District.

Action by J. M. Geddie against Fidelity Lloyds of America. Judgment for plaintiff, and defendant appealed to the Court of Civil Appeals. Question certified to Commission of Appeals. Question answered.

H. E. Johnson and John Davis, both of Dallas, for appellant.

Coker, Carter & Wilson, of Dallas, for appellee.

SPEER, J.

The case is before us upon the following certificate from the Court of Civil Appeals for the Eighth District:

"In this case the appellee, Geddie, purchased an automobile, in part payment therefor executing a note and mortgage upon the car in favor of the seller. The note and mortgage were assigned to the McFarland Investment Company. Appellant operating under Lloyds Plan (article 5013-5023 R. S.), issued to Geddie an insurance policy in the sum of $700, agreeing to indemnify against loss of the car by theft with loss payable clause in favor of the McFarland Investment Company as its interest might appear, subject to all the terms and conditions of the policy. The policy contained this stipulation: `In consideration of a reduction in premium, it is warranted by the assured that the automobile insured under this policy will be continuously equipped with a locking device known as Dill wheel (approved by Underwriters' Laboratories, Inc., and bearing their label). The assured undertakes during the currency of this policy to use all diligence and care in maintaining the efficiency of said locking device, and in locking the automobile when leaving the same unattended.'

"The car was equipped with a Dill wheel. Geddie left the car parked upon a street in Dallas, unattended and the wheel unlocked. While so parked the car was stolen and has not been recovered. No excuse was shown for failing to lock the wheel.

"Appellant paid to the McFarland Investment Company the balance due upon Geddie's note and took an assignment of the note and mortgage. No demand for payment of the note has ever been made by appellant. Prior to making such payment to the McFarland Company, appellant `had taken' a written statement from Geddie containing the information that the car had been stolen while standing unattended upon the street with the wheel unlocked. It is not shown this statement was given upon demand of appellant. Geddie brought this suit upon the policy to recover the value of the car less the amount paid to the McFarland Company and recovered as prayed for.

"Appellant defended upon the ground that the warranty as to locking the car while unattended had been breached. In avoidance thereof Geddie pleaded waiver of the breach and estoppel to rely thereon because of the voluntary payment by appellant to the McFarland Company of the amount due upon the note held by it, which payment was made with full knowledge of the breach of warranty, and that the McFarland Company and Geddie were asserting appellant was liable to them for the face value of the car.

"The appeal is presented upon agreed statement under article 2280 R. S. The only question presented is as to the sufficiency of the pleadings and facts to show waiver of the breach of the warranty or estoppel to rely thereon.

"Upon the facts stated this court held that appellant had not waived the breach of the warranty respecting locking the wheel and was not estopped to rely upon the breach of such warranty, and reversed the judgment of the court below and rendered judgment in favor of appellant. A copy of the opinion of this court is hereto attached and made a part hereof.

"The decision herein of this court is in conflict with the opinion and decision of the Court of Civil Appeals of the Sixth Supreme Judicial District of this State in Webber v. Fidelity-Lloyds of America, reported in 271 S. W. 118. This court refuses to concur with the said opinion rendered in Webber v. Fidelity Lloyds of America.

"The opinion of this court and the report of the opinion in the Webber Case appearing in 271 S. W. 118, clearly discloses the question of law involved in this case wherein a conflict of opinion has arisen, and that question is hereby respectfully certified to the Supreme Court for adjudication by it, under article 1855, R. S. 1925."

The conflict with the case of Webber v. Fidelity Lloyds of America (Tex. Civ. App.) 271 S. W. 118, referred to in the certificate, and this one, should be resolved in favor of the decision in the Webber Case. The conflict is apparent, and from the certificate appears to involve the identical question of law. Indeed, the two policies appear to be the same.

The fact that the policy in controversy contained a clause making the loss, if any, payable to the McFarland Investment Company as its interest might appear does not in any wise alter the fact that the contract proper is between the insurance company and the owner of the property. The effect of such clause is but to name the McFarland Investment Company as the party entitled to receive payment of the fund in the event a loss becomes payable under the terms of the policy. Hamburg-Bremen Fire Ins. Co. v. Ruddell, 37 Tex. Civ. App. 30, 82 S. W. 826. The authorities generally agree upon this matter. That...