Freeman v. Commercial Union Assur. Co.

• Citation: 317 S.W.2d 563
• Decision Date: 07 October 1958
• Docket Number: No. 7043,7043
• Parties: Roy J. FREEMAN, Appellant, v. COMMERCIAL UNION ASSURANCE COMPANY, Ltd., Appellee.
• Court: Court of Appeals of Texas. Court of Civil Appeals of Texas

Page 563

317 S.W.2d 563

Roy J. FREEMAN, Appellant, v. COMMERCIAL UNION ASSURANCE COMPANY, Ltd., Appellee.

No. 7043.

Court of Civil Appeals of Texas, Texarkana.

Oct. 7, 1958.

Rehearing Denied Nov. 11, 1958.

Sidney C. Lee, Texarkana, for appellant.

Norman C. Russell and Atchley & Russell, Texarkana, for appellee.

FANNING, Justice.

Roy J. Freeman and D. H. Lee sued Commericial Union Assurance Company, Ltd., upon a policy of fire insurance issued by said company insuring Freeman and Lee against loss by fire of a certain building owned by Freeman and mortgaged to Lee. The amount of the policy was $3,750, and Lee's debt, secured by a mortgage on the building, was greater than the amount of the policy. The insurance company first denied liability as to both Freeman and Lee but later admitted liability as to Lee and paid him $3,750, the full amount of the policy.

The insurance company then filed its second amended original answer alleging that it was not liable to Freeman for various reasons and prayed judgment to determine that it was not liable to Freeman under such policy and that it should be subrogated to Lee's rights as a mortgagee to the extent of the payment which it had made to Lee and praying for a lien to the extent of such payment.

Among the defenses asserted by the insurance company it was contended in effect that the policy in question had been forfeited and voided as to Freeman by reason of the violation by Freeman of basic conditions in the policy in that Freeman insured the premises on the representation that same were to be used and occupied as a tenant dwelling and that in fact the property was used in conducting a furniture business and that the hazard incidental to the risk on said premises had been increased by reason of Freeman's use of same in the conduct of a business and that such hazard increase was within the knowledge and control of said insured and was not usual and incidental to the occupancy as described and contemplated in the said policy. The policy in question in the section entitled 'Description of Property' and above the term 'occupancy' listed the insured building in question as 'Tenant Dwelling.' The policy in question contained certain basic conditions, among which were the following 'Line 1. Basic Conditions:

'This entire policy shall be void if, whether before or after a loss, the insured has wilfully concealed or misrepresented any material fact or circumstance concerning this insurance, or the subject thereof, or the interest of the insured therein * * *

'Line 31. Basic Conditions:

'Unless otherwise provided in writing and added hereto, this Company shall not be liable for loss occurring * * *: (a) while the hazard is increased by any means within the knowledge and control of the insured, provided such increase in hazard is not usual and incidental to the occupancy as hereon described; or (b) while a described building, whether intended for occupancy by owner or tenant is vacated beyond a period of 30 consecutive days; or * * * (d) following a change in ownership of the insured property; or (e) while any other stipulation or condition of this policy is being violated.'

Following the payment of $3,750 to Lee and following the filing of the insurance company's second amended original answer, Freeman and Lee took nonsuits and the trial proceeded on the remaining matters. Trial was to a jury. The jury in response to the special issues submitted found in effect: (1) That a certain conveyance of the building and lot in question from Freeman to Avery Murrah on October 22, 1956, was without consideration; (2) that such conveyance did not result in Murrah receiving any beneficial interest; (3) that the conveyance in question was in accordance with an agreement between Freeman and Murrah that Murrah would hold the ownership to such land at the pleasure of Freeman; (4) that at or prior to such conveyance Freeman and Murrah agreed that Murrah would reconvey the property in question to Freeman upon Freeman's request; (5) that the conveyance in question was based upon an agreement between Freeman and Murrah that such deed was to be held by Murrah for the use and benefit of Freeman; (6) that on or about December 25, 1956, the date of the destruction of the house located on the premises in question, Freeman was not the owner of such house and the property upon which such was situated; (7) that Freeman made use of the house prior to its destruction by fire on or about December 25, 1956, for the purpose of operating a furniture business; (8) that in so using said house the hazard incidental to such use was increased; (9) that the hazard was so increased by means within the knowledge and control of Freeman; and (10) that such increase in hazard was not usual and incidental to the occupancy of said house as a tenant dwelling. The trial court, upon the findings of the jury and upon additional findings of the court on the undisputed evidence in the case, granted the insurance company's motion for judgment and rendered judgment for the insurance company against Freeman as prayed for by the company. Freeman's amended motion for new trial was overruled and he has appealed.

Appellant by his Pints 1, 2, 3 and 4, contends that the trial court erred in permitting Marvin Self, a witness for appellee, to testify, over plaintiff's objections, to the effect that if property was insured for use as a tenant dwelling and the tenants moved out and after that the owner stored furniture in the house thereon and used such house for the sale of furniture and storage of furniture, that there would be a different rate for the insurance and that this rate would be higher; as to the component parts going to make up the rate of charge of the fire insurance policy involved in the suit; that when a building is occupied for commercial purposes it is rated under mercantile, and in this connection a building with a composition roof would have a basic charge of $1.15, the key rate charge being $1, making a total of $2.15, that there would then be experience credit, that on the date of the policy involved in this suit, the experience credit was 36% of $2.15, that the rate on the policy involved in the suit would be $1.37 for $100 of insurance for one year, and that for three years (as the policy was written for), it would be $3.15, and that on the basis of the insurance issued in the amount of $4,500 the rate for a 3-year policy for $4,500 on a furniture store would have a premium of $153.80, less a fire record credit of 10% or $15.38, making a $138.42 net premium. Appellant Freeman made various objections to this testimony to the effect that same was not the best evidence and that the best evidence would be the orders promulgated by the Texas Insurance Commission and the rate book promulgated by the Texas Insurance Commission.

The witness Marvin Self, in being qualified, testified to the effect that he was an insurance underwriter, had been in the insurance business for over 23 years, had been an insurance examiner for eight years and had had three years' experience as a local agent. He further testified to the effect that he estimated rates nearly every day, and upon being interrogated as to the charges made for fire insurance upon a building used for commercial purposes, he gave the charges involved in computing the cost of such insurance. Self testified as to the rates as above outlined and also testified as follows:

'Questioned by the Court:

'Q. You are testifying from your own personal knowledge, are you not, as to these rates? A. My own personal knowledge and experience gained over some twenty-odd years.'

'Direct Examination Continued:

'Q. You are or are not referring to any written memorandum or any other paper to recall these rates? A. No.'

Following the above testimony, the witness Self further testified on voir dire by appellant's counsel as follows with appellant making the hereinafter quoted objection thereto:

'Mr. Lee: If the Court please, may I take him on voir dire?

'The Court: Yes.

'Questioned by Mr. Lee:

'Q. Are you testifying to matters contained in orders of the Texas Insurance Commission? A. I don't know what you mean orders. We have what is furnished us. It contains all the rules and rating schedules.

'Q. Is that promulgated by the Texas Insurance Commission? A. Yes, and furnished to all agents.

'Q. Are you testifying to what is contained in that book that you mentioned? A. That is where I get the information. We don't have any source except in that book put out by the Board of Insurance Commissioners.

'Mr. Lee: If the Court please, we renew our objections to this testimony as to rates for the reason that the book containing those regulations and rates is the best evidence as to what they are.

'The Court: Objection over-ruled.

'Mr. Lee: Note our exception.'

No attempt was made by appellee to introduce in evidence the officially promulgated rates of the Texas Insurance Commission or the duly promulgated rate book of the Texas Insurance Commission. Appellee's position, among other things, is that the witness Self was simply interrogated on the various differences in the rates upon the uses inquired about based upon his independent recollection and knowledge and that such evidence was admissible and further that the testimony of Self was merely collateral to the principal issues in the case and that by reason thereof the best evidence rule, even if it were applicable, would not make such evidence inadmissible.

In Vise v. Foster, Tex.Civ.App., 247 S.W.2d 274, wr. ref., n. r. e., a witness was permitted to testify as to his personal knowledge of the market prices of East Texas crude oil. It appeared that a written memorandum had been sent to him quoting such prices; however, he was held to be a competent witness and the objection to his testimony was held to go to its weight and not to its admissibility.

In Shock v. Mrs. Ragsdale's Foods Co., Tex.Civ.App., 228 S.W.2d 353...