First Nat'l Bank of Waxahachie v. Lancashire Ins. Co.

• Decision Date: 24 November 1884
• Docket Number: Case No. 1665.
• Citation: 62 Tex. 461
• Court: Texas Supreme Court
• Parties: FIRST NATIONAL BANK OF WAXAHACHIE v. THE LANCASHIRE INSURANCE CO.

62 Tex. 461

FIRST NATIONAL BANK OF WAXAHACHIE

v.THE LANCASHIRE INSURANCE CO.

Case No. 1665.

Supreme Court of Texas.

Nov. 24, 1884.

APPEAL from Ellis. Tried below before the Hon. Geo. N. Aldredge.

The appellee (an English insurance company) issued to Patrick, McMillan & Co. an open policy of insurance, for the purpose of insuring against loss or damage by fire such property as might be entered by appellee's agents, in a book attached to the policy. This policy was, with the consent of appellee, assigned, in October, 1883, to appellant. Appellee received, first, from Patrick, McMillan & Co., and afterwards from appellant, a number of premiums under the policy, and made a corresponding number of entries in the book, attached to the policy. Among the entries made in the book was that of November 1, 1883, whereby appellant claimed to be insured from November 1, 1883, to November 6, 1883, to the amount of $6,000 on certain cotton specified in the entry. This cotton having been destroyed by fire on the 5th day of November, 1883, appellant sued, making the above mentioned policy the basis of the suit, setting up its issuance to Patrick, McMillan & Co., its assignment to appellant, the entry of November the 1st in the book attached to the policy, the destruction by fire of the cotton specified in the entry, and various other matters hereinafter stated more at large. To appellant's first amended original petition appellee presented demurrers, general and special; and these having been sustained by the court, and appellant declining to amend, a final judgment was entered against appellant dismissing the amended petition and awarding costs to appellee. From this judgment sustaining the demurrers of appellee and dismissing appellant's cause of action, appellant prosecutes an appeal.

The written words of the policy which set forth particularly the character and limitations of the contract, the character of the property insured, the relation of the assured to the property, its locality, etc., were as follows:

“Whereas Patrick, McMillan & Co. have paid as per indorsement the sum of _______ dollars to the Lancashire Insurance Company for insuring from loss or damage by fire the property hereinafter described, not exceeding the sum specified on each article, viz.: on goods, wares, merchandise, produce, or other property, … their own, or held by them in trust or on commission, or sold but not delivered, as shall be specified and indorsed in the book attached by this company or its legally authorized and commissioned agents, and for such amounts in such store houses and places, and at such rates of premium as shall be approved and indorsed in book attached hereto by one of the officers of this company, or its legally authorized and commissioned agents at Waxahachie, Texas. No entry to be binding on this company until countersigned by the duly authorized and commissioned agents of this company; … The said Lancashire Insurance Company hereby agree to make good unto the said assured, their executors, administrators and assigns, all such immediate loss or damage, not exceeding in amount the sum or sums insured, as above specified, nor the interest of the assured in the property, except as herein provided, as shall happen by fire to the property so specified and located, but not otherwise or elsewhere, from the 14th day of October, 1882, at 12 o'clock at noon, until revoked.”

The plaintiff first alleged that the cotton destroyed was its own. It then alleged that if not its own, the cotton was held by it in trust.

3d. If the cotton was not its own or held by it in trust, then plaintiff alleged that “said policy and said entry (No. 12) in said book covered and insured, and was intended to cover and insure, all cotton at and between said dates on and to be placed on said yard, purchased by one S. W. King, and paid for with funds of plaintiff in pursuance of an agreement and understanding between plaintiff and said King, that the cotton so purchased and paid for should secure and stand bound for said money; that the proceeds of such cotton when sold shall go and be paid to plaintiff; that the bills of lading for such cotton, when the same was shipped off for sale, should be issued in the name or be assigned to plaintiff--the said agreement being that plaintiff should in effect be the owner of said cotton, and being made to the end that the funds of plaintiff used in the purchase of the same might be repaid and made good to plaintiff out of the proceeds of said cotton.”

Plaintiff further set up that the defendant was estopped to deny that it was the owner of the cotton for reasons referred to in the opinion.

The defendant filed a general demurrer and special exceptions, and answered at great length to the merits.

The court sustained the general demurrer.

The plaintiff declined to amend and the cause was dismissed.

S. C. McCormick, for appellant, cited, on sufficiency of petition: Georgia Home Ins. Co. v. Jacobs, 56 Tex., 372; Wood on Fire Ins., sec. 270, p. 500; sec. 492, pp. 823 and 824; secs. 419 and 420, pp. 724 to 728; and sec. 417, pp. 715 and 716; May on Ins. (2d ed.), §§ 468 and 469, pp. 710 to 714; Rising Sun Ins. Co. v. Slaughter, 20 Ind., 520;Nichols v. Fayette Ins. Co., 1 Allen (Mass.), 63;Fowler v. N. Y. Ins. Co., 23 Barb. (N. Y.), 150;Franklin v. National Ins. Co., 43 Mo., 491; Nautes v. Thompson, 2 East, 509; Rockford Ins. Co. v. Nelson, 65 Ill., 415.

That appellee was bound by the course of past dealing, he cited: Dewees v. Lockhart, 1 Tex., 535;Cross v. Shutliffe, 1 Am. Dec., 645;S. C., 2 Bay (S. C.), 220;Coit v. Commerial Ins. Co., 5 Am. Dec., 282;7 Johns. (N. Y.), 375;Sampson v. Gazzan, 30 Am. Dec., 578;S. C., 6 Port. (Ala.), 123; Brough v. Whitmore, 4 Term R., 206; Hough v. City Fire Ins. Co., 29 Conn., 10.

DELANY, J. COM. APP.

Notwithstanding the length of the pleadings and the number of the assignments of error, the questions to be determined in this case are very few.

The policy was originally issued to Patrick, McMillan & Co., and by them transferred to the plaintiff, with the consent of the insurance company.

Under this policy, goods, wares and merchandise might be insured, but only under certain circumstances. By the written terms of the policy, the assured must sustain certain definite relations to the property. It must be their own property, or held by them in trust or on commission, or sold but not delivered.

It must also be at the place specified in the entry, which by the terms of the contract was to be made in the book accompanying the policy.

It is easy to see why the plaintiff, in its pleadings, did not rest content with the allegation that the property destroyed was its own, or was held by it in trust. In either case the petition would have been good upon demurrer, because it would have stated a case which came fully within the terms of the policy.

But as the proof might not have...