Home Ins. Co. v. Henderson

• Decision Date: 28 May 1924
• Docket Number: (No. 2928.)
• Citation: 263 S.W. 650
• Parties: HOME INS. CO. OF NEW YORK v. HENDERSON.
• Court: Texas Court of Appeals

263 S.W. 650

HOME INS. CO. OF NEW YORK v. HENDERSON.

(No. 2928.)

Court of Civil Appeals of Texas. Texarkana.

May 28, 1924.

Rehearing Denied June 12, 1924.

Appeal from District Court, Henderson County; W. R. Bishop, Judge.

Action by E. M. Henderson against the Home Insurance Company of New York. Judgment for plaintiff, and defendant appeals. Reversed and rendered.

The suit is by appellee against appellant insurance company on a policy of fire insurance insuring a certain automobile against fire and theft for the term of one year, from August 9, 1921, to the amount of $1,500. A fire occurred on March 9, 1922, while the policy was in effect, injuring and damaging the automobile to the extent, as admitted, of $1,500. The automobile was of the value, at the time of the fire, of $1,800. The policy contained a loss payable clause in favor of the Oil Belt Motor Company as owner of 10 purchase-money notes given by the owner of the automobile. The insurance company paid the Oil Belt Motor Company $625, but refused to pay the insured the balance of the $1,500, claiming and pleading, in this suit, that the policy, according to its terms, became null and void on account of this breach, except as to the interest of the Oil Belt Motor Company which was paid it. The appellee sued for the balance of $875, and the court awarded judgment in his favor for that amount.

The case was tried before the court on an agreed state of facts. The agreed facts are that Burt Curtis, on August 9, 1921, purchased the Studebaker automobile from the Oil Belt Motor Company, paying therefor $1,000 cash and executing 10 notes, aggregating $1,038.18, payable monthly on the first day of each month, beginning September 1, 1921, and executing a chattel mortgage on the automobile to secure the payment of the notes. The notes were in the sum of $100 each, except the last note, which was for $138.18, with interest at the rate of 10 per cent. per annum from date, and provided, viz.:

"This note is one of a series of notes, and failure to pay any of them, or the interest thereon, when due, at option of the holder, matures all of said notes not then due, and the holder is hereby authorized to immediately institute proceedings for collection and the foreclosure of the chattel mortgage lien retained in the bill of sale and chattel mortgage of even date."

After the purchase of the automobile, and on August 9, 1921, Burt Curtis procured from the appellant the policy in suit. The following was attached to, and formed a part of, the policy:

"Loss Payable.

"This company does not ordinarily issue a policy on property of this character of that described above when the same is incumbered in any way, and it is expressly agreed that this policy is issued on condition of the literal truth of statements made to this company (but which shall not be a waiver of the company's rights in case of inaccuracy of any other statements made to the company) that: The insured has paid in cash $1,000 on account of the purchase price of the insured property, and that he yet owes thereon a balance of $1,038.18, and that the same is the only indebtedness or incumbrance of any kind or amount on said insured property, and that the same is now represented by 9 notes payable, one on the first day of each month, beginning with September 1, 1921. And this policy shall be wholly void if any such statement is inaccurate in any respect, or if any change is made in any of the notes representing said indebtedness or incumbrance, or otherwise than by payment thereof, or if the property shall become otherwise incumbered in any way whatever, by any lien or any amount whatever, or if any of said notes shall not be completely paid and the indebtedness represented thereby wholly discharged on or before 10 days after the maturity thereof, without grace. But the loss, if any, hereunder, shall be payable to Oil Belt Motor Company, as owner of said notes, as its interest may appear, subject to all the terms and conditions of the policy, save that this insurance, as to the interest of said owner of the said notes only, shall not be invalidated by the failure of the assured to pay any of said notes within the time specified above, and in such case the liabilities of this company, under this policy, shall be to the said Oil Belt Motor Company only, and shall be limited to the amount of the principal and interest then unpaid on said notes."

At the time of the damage to the automobile, by fire, on March 9, 1922, the first four of the purchase-money notes had been fully paid by the assured to the Oil Belt Motor Company, but the remaining six notes were unpaid. The notes due and payable on January 1, 1922, February 1, 1922, and March 1, 1922, were all past due and unpaid, in whole or in part, as to both principal and interest. The insurance company having paid to the Oil Belt Motor Company the amount of the unpaid notes, the latter company indorsed each of said unpaid notes to the appellant insurance company. At the time of the fire the automobile belonged to the...