Foundation Reserve Ins. Co. v. Wesson

• Decision Date: 24 October 1969
• Docket Number: No. 17326,17326
• Citation: 447 S.W.2d 436
• Parties: FOUNDATION RESERVE INSURANCE CO., Inc., Appellant, v. Ed S. WESSON, Appellee. . Dallas
• Court: Texas Court of Appeals

Page 436

447 S.W.2d 436

FOUNDATION RESERVE INSURANCE CO., Inc., Appellant, v. Ed S. WESSON, Appellee.

No. 17326.

Court of Civil Appeals of Texas Dallas.

Oct. 24, 1969.

Rehearing Denied Nov. 21, 1969.

L. W. Anderson, Dallas, for appellant.

John H. McElhaney, Walter H. Dunlap, Turner, Rodgers, Winn, Scurlock & Terry, Dallas, for appellee.

BATEMAN, Justice.

The appellee Ed S. Wesson, a local recording insurance agent, recovered from the appellant Foundation Reserve Insurance Company, Inc. a judgment for $1,032.88, representing unearned premiums paid by him on behalf of some of his customers for automobile insurance policies issued by the appellant but which were soon thereafter cancelled by appellant. Appellant denies liability for the return of such premiums because it says it never received them. The controlling question, therefore, raised in varying phraseology by all seven of appellant's points of error, is whether payment of the premiums by Wesson to one V. G. Marshall was legally payment to appellant. Appellant says that Marshall was a mere broker without actual or apparent authority to act for it, while Wesson contends that Marshall was appellant's agent with actual, or at least apparent, authority to write the insurance for appellant and to collect the premiums and remit them to appellant.

There was no jury, after rendering the judgment the court filed findings of fact and conclusions of law. The court found that appellant had supplied Marshall with insurance policy forms, and that some of the policies in question were typed thereon and validated in Marshall's office and some were typed and validated at the home office of appellant and sent to Marshall; that in either case Marshall sent each policy to Wesson along with a separate bill; that on prior occasions the parties had handled other automobile insurance business in the same manner, Wesson paying the premium to Marshall, and Marshall remitting same to appellant; that on the policies in question Wesson paid the premiums to Marshall in the same manner as before, but that Marshall did not transmit these premiums to appellant, whereupon appellant cancelled the policies; that Wesson at his own expense replaced the cancelled policies, obtaining from many of his customers assignments of their causes of action against appellant. The court further found that Marshall had actual authority from appellant to accept and transmit premium payments to it; that appellant also clothed Marshall with certain indicia of actual or apparent authority to act as its agent in billing for and collecting insurance premiums from Wesson, and that Wesson relied thereon in paying the premiums to Marshall.

The trial court concluded that Marshall had actual as well as apparent authority to bill for and collect the premiums and that his acts in doing so legally constituted payment to appellant, and that Wesson, by express written assignment and/or under the doctrine of subrogation, owns the cause of action and is entitled to recover.

If the record contains any evidence of sufficient probative force to support the judgment of the trial court, that judgment should not be disturbed on appeal. Banks v. Collins, 152 Tex. 265, 257 S.W.2d 97, 99 (1953). The findings of fact clearly support the judgment, and in determining whether those findings are supported by any evidence of probative value we must give credence only to the evidence favorable to the findings, indulging all reasonable inferences to be drawn therefrom in favor of the findings and disregarding all evidence to the contrary. Brown v. Frontier Theatres, Inc., 369 S.W.2d 299, 301 (Tex.1963).

It appears without dispute that appellant was a New Mexico insurance corporation not licensed to do business in Texas, but that it did insure automobiles for Texas residents who had difficulty in placing their business with domestic companies. It did so through Texas insurance brokers. V. G. Marshall was such a broker residing in Fort Worth, Texas. He was licensed to place such business in non-admitted insurers pursuant to Article 21.38 of the Texas Insurance Code, in effect at the time of the transactions here involved. ¹ Appellant supplied Marshall with a quantity of its blank policy forms and authorized Marshall to fill up the blank spaces in such forms, deliver the policies to the agent applying therefor, and collect and remit the premiums.

Wesson was a licensed local recording agent residing in Dallas, Texas. He was not licensed to place business in non-admitted carriers. From time to time his customers required insurance which could not be obtained from the companies regularly represented by him, and in such cases he would tender such business to brokers such as Marshall. Although Marshall wrote business in several non-admitted companies, Wesson specified that the several policies in question be placed with appellant because its rates were the most 'attractive.' He had had similar dealings with Marshall over a period of years. Marshall would either send the application to appellant, and when the policy was issued and returned to him he would send it to the local agent, such as Wesson, or he would simply issue the policy out of his own office and deliver it to the local agent, sending a copy to appellant. Under either method he would send Wesson a bill for the premium with each policy. He would also send Wesson a monthly statement of the total premiums thus accrued during the month. Appellant billed Marshall monthly for the premiums on all such business written in the preceding month. Wesson promptly paid all of Marshall's statements to him, less his commission and a special discount offered by Marshall to encourage prompt payment.

However, Marshall became insolvent and did not pay appellant the premiums for the policies in question, whereupon appellant cancelled them. Wesson then placed the business elsewhere and paid the premiums himself.

We hold that the question of agency is one of fact, and that agency and the extent of the agent's authority may be shown by circumstantial evidence. Fireman's Fund Indemnity Co. v. Boyle Gen. Tire Co., 381 S.W.2d 937, 938 (Tex.Civ.App., Waco 1964, reformed and affirmed 392 S.W.2d 352); National Guarantly Fire Ins. Co. v. King...