Lloyds Cas. Insurer v. McCrary

Citation229 S.W.2d 605,149 Tex. 172
Decision Date12 April 1950
Docket NumberNo. A-2537,A-2537
PartiesLLOYDS CASUALTY INSURER v. McCRARY et al.
CourtSupreme Court of Texas

Kemper, Wilson & Schmidt, Houston, for appellant.

Norman, Stone, Rounsaville & Hassell, Jacksonville, Shook & Shook, Dallas, Adams & Morgan, Crockett, for appellees.

HART, Justice.

This case comes to us on a certificate under Rule 461, Texas Rules of Civil Procedure, from the Court of Civil Appeals at Texarkana. The following summary of the pertinent facts is taken from the certificate, the tentative opinion of the Court of Civil Appeals, and the transcript. We have not taken into consideration any additional or different facts which may appear in the statement of facts, since it is not our practice to do so in answering certified questions. Renfro Drug Co. v. Lawson, 138 Tex. 434, 160 S.W.2d 246, 146 A.L.R. 732; Employers' Liability Assurance Corporation v. Young County Lumber Co., 122 Tex. 647, 64 S.W.2d 339; Scott v. Gardner, 137 Tex. 628, 156 S.W.2d 513, 141 A.L.R. 50.

Lloyds Casualty Insurer issued to Ed Grimes, doing business as Crockett Butane Gas Service, in Crockett, Houston County, a 'Manufacturers and Contractors Policy' of liability insurance. During the policy period, Ed Grimes and his son, J. N. Grimes, who was his partner in the business known as Crockett Butane Gas Service, installed a butane gas system in a house belonging to I. D. McCrary and rented to M. D. Nunnally, near Jacksonville, Cherokee County. The installation was not completed in that the pressure gauge, valves and fittings on the butane gas storage tanks did not operate properly, and J. N. Grimes knew of these defects and intended to complete the installation at a later date by repairing or exchanging the defective apparatus. Before the defect was corrected, a leak in the butane gas system caused a fire which destroyed McCrary's house and Nunnally's household goods. They sued Ed Grimes and J. N. Grimes for their property damage, and the Grimeses notified the insurer, which refused to defend the suit. Judgment was recovered by McCrary and Nunnally against the Grimeses, but execution was returned nulla bona, and McCrary and Nunnally then sued the insurer to recover the amount of their judgment. The Grimeses intervened, asserting that the insurer was liable to them for the expenses of defending the damage suit. The insurer filed a plea of privilege, and controverting pleas were filed by the plaintiffs and interveners on the ground that venue lay in Cherokee County under Subdivision 23 of Article 1995, Vernon's Ann.Civ.St. After hearing evidence, the district court overruled the plea of privilege. Upon appeal, the Court of Civil Appeals first wrote an opinion reversing the judgment of the district court, but on the motion of the appellees, certified to us three questions. Since our holding on the first question makes it unnecessary to answer the other questions, we quote only the first question:

'Question No. 1: Did this court err in holding that, under the provisions of the insurance policy above set out unaided by Sec. 11, Art. 6053, Vernon's Annotated Texas Statutes, no cause of action against appellant, the insurance carrier, was shown?'

All parties concede that the burden rested on the plaintiffs and the interveners to show a cause of action against the insurer to maintain venue in the county where the suit was filed, under Subdivision 23 of Article 1995. Victoria Bank & Trust Co. v. Monteith, 138 Tex. 216, 158 S.W.2d 63. The grounds on which the insurer contends that no cause of action against it was shown are first, that the policy did not cover the accident causing the damage; and, second, that the policy covered only Ed Grimes individually and therefore did not cover the partnership composed of Ed Grimes and his son, J. N. Grimes, against whom the judgment was recovered in the damage suit.

With regard to the question of coverage, the following portions of the policy are pertinent:

                "Declarations               Schedule Manufacturers and Contractors Policy
                -------------------------------------------------------------------------------
                Item 1.  Name of
                         insured         Ed Grimes, dba Crockett       Butane Gas Service
                                         ------------------------------------------------------
                         Address         2nd Street      Crockett       Houston      Texas
                                         ------------------------------------------------------
                                         (No. Street      Town          County       State)
                         Location of      same
                         premises         ----
                         Interest of named insured in     Owner
                         premises                         -----
                                               Part occupied by
                                                 name insured            All
                                                                         ---
                         The business of the named                 Butane Gas Dealer
                         insured is                                -----------------
                

Item 3. The insurance afforded is only with respect to such and so many of the following coverages and divisions thereunder as are indicated by specific premium charge or charges. The limit of the company's liability against each such coverage and division thereunder shall be as stated herein, subject to all of the terms of this policy having reference thereto.

                The Letter "X" Appearing in the "No Insurance" Column Shall Mean That No
                Insurance is Afforded With Respect to the Hazard Stated in the Division
                Opposite Thereto
                ------------------------------------------------------------
                Coverage   Division    Hazards    No Insurance
                ------------------------------------------------------------
                B.         1.        Premises-                  $5,000.00
                                     Operations                 each
                                                                accident
                           -----------------------------------
                Property
                Damage     2.        Elevators         X
                           -----------------------------------
                Liability  3.        Independent                $10,000.00
                                     Contractors       X        aggregate
                           -----------------------------------
                           4.        Products          X
                           -----------------------------------  (aggregate
                                                                applies to
                                                                Div. 1, 3, 4
                           5.        Contractual       X        and 5 only)
                           -----------------------------------
                                                                                  Advance
                  Purposes of Use     Premium                R A T E S           Premiums
                                                        Coverage   Coverage  Coverage Coverage
                                       Bases               A          B         A        B
                ------------------------------------------------------------------------------
                1
                Premises-Operations  (a) Remuneration   (a) Per $100
                Code No. 8350-Butane                        of Remuneration
                Gas Operation        (b) Area of        (b) Per 100
                including gasoline,  Premises               Sq. Ft. Area
                fuel, oil mixing     $5,000.00             .26        .56      $27.50   $56.25
                or blending
                ------------------------------------------------------------------------------
                *     *     *     *     *     *     *     *     *     * *     *     *
                            Minimum Premiums      Total Advance Premium (A)$27.50 (B)$56.25
                            Div. 1 Div. 2 Div. 3
                Coverage A  $27.50
                Coverage B  $56.25                Total Advance Premium for the Policy $83.75"
                ------------------------------------------------------------------------------
                

'Lloyds Casualty Insurer

(A Lloyds insurance company, herein called the company)

'Houston, Texas

'Does hereby agree with the insured, named in the declarations made a part hereof, in consideration of the payment of the premium and of the statements contained in the declarations and subject to the limits of liability, exclusions, conditions and other terms of this policy:

'Insuring Agreements

'I. * * * Coverage B-Property Damage Liability-To pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law for damages because of injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the hazards hereinafter defined.

'Definition of Hazards

'Division 1. Premises-Operations. The ownership, maintenance or use of the premises, and all operations during the policy period which are necessary or incidental thereto.

* * *

* * *

'Division 4. Products. The handling or use of or the existence of any condition in goods or products manufactured, sold, handled or distributed by the named insured, if the accident occurs after the insured has relinquished possession thereof to others and away from premises owned, rented or controlled by the insured, except equipment of other property rented to or located for the use of others but not sold; and operations covered under divisions 1 and 3 of the Definition of Hazards, other than pick-up and delivery and the existence of tools, uninstalled equipment and abandoned or unused materials, if the accident occurs after such operations have been completed or abandoned at the place of occurrence thereof and away from such premises.'

* * *

* * *

'Exclusions

'This Policy Does Not Apply:

'(a) under division 1 of the Definition of Hazards, to:

'(3) operations, other than pick-up and delivery and the existence of tools, uninstalled equipment and abandoned or unused materials, if the accident occurs after such operations have been completed or abandoned at the place of occurrence thereof and away from premises owned, rented or controlled by the insured;

* * *

* * *

'(c) under divisions 1 and 4 of the Definition of Hazards, to the ownership or maintenance of signs, or to machinery, equipment or other property rented to or located for use by...

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