Merchants' & Mfrs.' Lloyd's Ins. Exch. v. Southern T. Co.

• Decision Date: 06 April 1918
• Docket Number: (No. 8824.)
• Citation: 205 S.W. 352
• Parties: MERCHANTS' & MFRS.' LLOYDS' INS. EXCH. et al. v. SOUTHERN TRADING CO. OF TEXAS.
• Court: Texas Court of Appeals

205 S.W. 352

MERCHANTS' & MFRS.' LLOYDS' INS. EXCH. et al. v. SOUTHERN TRADING CO. OF TEXAS.

(No. 8824.)

Court of Civil Appeals of Texas. Ft. Worth.

April 6, 1918.

Rehearing Denied June 15, 1918.

Appeal from District Court, Tarrant County; R. E. L. Roy, Judge.

Suit by the Southern Trading Company of Texas against the Merchants' & Manufacturers' Lloyd's Insurance Exchange and others. From a decree for plaintiff, defendants appeal. Affirmed.

Bryan, Stone & Wade and E. H. Ratcliff, all of Ft. Worth, for appellants. S. C. Rowe, of Ft. Worth, and Thos. H. Ball, of Houston, for appellee.

CONNER, C. J.

The appellee, a corporation, filed this suit in the district court of Tarrant county against the appellants, Merchants' & Manufacturers' Lloyd's Insurance Exchange, I. H. Kempner, and B. J. Cunningham, as its attorneys in fact, and against said I. H. Kempner, B. J. Cunningham, and 74 other individuals, firms, and corporations, residing in and citizens of various counties in Texas, alleging that said insurance exchange "is an association or partnership composed of" the other persons, partnerships, and corporations made defendants in the suit; that the business of said insurance exchange is in charge of I. H. Kempner and B. J. Cunningham as attorneys in fact, the business being conducted at Galveston, Tex.; that the insurance exchange and "members thereof" are engaged in the fire insurance business in Texas, and that the insurance exchange and the 76 other defendants named are all jointly and severally liable for losses suffered while policies of insurance issued by them are in force. The appellee further alleged that on January 6, 1916, the insurance exchange and the other defendants named made and delivered to plaintiff their certain policy of insurance of that date for $1,500 as follows: $500 on a certain one-story building and $1,000 on merchandise located in said one-story building, "consisting principally of steam engines, gasoline engines, pumps, press powers, steam cylinders, hydraulic rams, and such other machinery not more hazardous such as is usually kept for sale in a machine shop." It was further alleged that on the same date said defendants issued another policy to appellee for $3,500, "on their stock of merchandise, consisting principally of new and secondhand machinery, gasoline engines, pumps, shafting, belting, pulleys, gin outfits, boilers, tanks, and such other machinery not more hazardous and held in trust by them or sold, but not delivered, while contained in the two-story building." Both buildings were situated upon the same lot in the city of Ft. Worth, the two houses closely adjoining. It is further alleged that on June 3, 1916, when said policies were in full force, the property thereunder insured was either totally destroyed by fire or greatly damaged, so that appellee suffered a loss greatly in excess of the amount of said policies; that appellee had complied with all the terms, conditions, and stipulations of the policies, but that the defendants had failed and refused to pay the same. It was alleged that it became the duty of Kempner and Cunningham as attorneys to pay the amount of the said policies, but that they had wrongfully refused to do so, etc. The insurance exchange and 56 of the other 76 defendants named in the petition answered, the remaining 20 defendants, not having been served with citations, were, as we are authorized to infer from the record, dismissed. The defendants who answered pleaded in abatement misjoinder of parties and a want of jurisdiction in the district court, and also to the merits pleading breach of a promissory warranty by which it was alleged the assured agreed to make and prepare in the regular course of business after the date of the policies a set of books which should clearly and plainly present a complete record of business transacted, including a "complete record of all of the property which shall go into the premises and be added to the stock, and all property taken from the stock, whether by the assured or by others, even though not technically purchases or technically sales," and on this account and for other reasons stated the answering defendants denied liability, etc. The case was submitted to the jury under a general charge of the court, and the jury rendered a general verdict for the plaintiff, upon which verdict a judgment was entered against the insurance exchange and the 56 other defendants, who answered jointly and severally, for the full amount of the policies declared upon, from which judgment an appeal has been duly prosecuted to this court.

Inasmuch as several questions presented arise out of the peculiar wording and circumstances of the policies declared upon, we will here refer to them with some particularity. They are substantially the same, save that one of the policies, as already indicated, covered the one-story building and the merchandise therein situated, and the other covered the merchandise situated in the adjoining two-story building on the same lot. The policies were issued by I. H. Kempner and B. J. Cunningham as "joint attorneys for each underwriter." The policies provided that:

"Each of the individual underwriters hereto, as separate underwriters, each acting separately and not jointly, or one for the other, nor for any of the others, each represented by and acting through I. H. Kempner and B. J. Cunningham of the city of Galveston, Texas, as attorneys in fact for each underwriter, in consideration of the stipulations and conditions therein contained and of the payment to and receipt by each of them of his respective proportion of the sum of seventy-eight and seventy-five one hundredth dollars as premium does hereby separately insure the Southern Trading Co. of Texas, etc., * * * against all direct loss or damage by fire except as hereinafter provided to an amount not exceeding for each underwriter his pro rata portion of percentage as indicated by the rider attached, of the amount hereof insured," etc.

Attached to the policies was a list of the underwriters, purporting to show by figures opposite their respective names their individual subscription to the assets of the company, and the percentage of the total risks assumed under the policies contracted by each of them, respectively, to wit, I. H. Kempner, president, Texas Bank & T. Co., subscribed $21,000, 10 per cent.; I. H. Kempner, Bank & Cotton factor, subscribed $15,000, 7½ per cent.; then follows some 70 or more other named persons, firms, or corporations, with subscriptions ranging from $10,000 to $1,000, and with percentage of loss assumed from 5 to one-half of 1 per cent.

Arising out of such wording of the policies appellants insist that the court erred in not sustaining their plea of misjoinder of parties and causes of action, the contention being that where the liabilities of each underwriter is fixed at a certain and definite percentage of the loss, and the policy stipulates that the liability of each is separate and distinct from that of any and all other underwriters, it is a misjoinder of parties and causes of action for the plaintiff to join all underwriters in one suit. While it possibly should be held otherwise under the strict rule of the common law, in equity and under our liberal system of pleading and practice, we feel no hesitation in saying that the plea of misjoinder was not well taken. "The fundamental rule as to parties to suits in equity is that, however numerous they may be, all persons interested in the subject of the suit and its results should be made parties. The reason for the rule is the aim of the court of equity to do complete justice by embracing the whole subject, deciding upon and settling the rights of all persons interested in the subject of the suit, to make the performance of the order perfectly safe to those who have to obey it, and to prevent further litigation." 16 Cyc. 181. The principle thus announced has been applied in many of our decisions. Thus it is said in Moore v. Minerva, 17 Tex. 20, to be "common in chancery, when several claim under the same title to decree to each one his own particular interest; and our proceeding by petition is analogous to a proceeding in chancery. There is no inconvenience in such rule; it dispenses with a multiplicity of suits, which is a favored object, always to be encouraged by our jurisprudence," etc. That was a case where a negro mother and her children instituted a suit to establish their freedom, claiming, under a deed of manumission to the mother, damages for services being also claimed, and the court said:

"The parties, all claiming their freedom under the same title, might well unite in the action; and, so far as the damages for the deprivation of their liberty is involved, though the damage would be separate and to each individual according to the proof of the value of their services, there can be a separate judgment. The judgment and decree would be in favor of each for his freedom, and the damages assessed to each."

We see no reason why the rule thus indicated is not equally applicable here. As will be observed, the defendants in this action all joined by their authorized agents in the execution of the policies of insurance declared upon. They are parties to the policies, all jointly interested in them and all liable thereunder, and even if their liability is but several, and even though in the adjustment of the litigation the court should find it to be necessary to adjudge damages against each defendant severally to the extent only of the liability incurred by him. The court nevertheless retained jurisdiction over all.

We will not, however, dwell at length upon the general principles last above indicated, for we think we have statutes which control the subject. By an act of the Legislature entitled "An act to authorize unincorporated joint-stock companies or associations to sue and be sued in their company or distinguishing name, and to prescribe the mode and...