Ranger County Mut. Ins. Co. v. Chrysler Credit Corp.

• Citation: 501 S.W.2d 295
• Decision Date: 19 September 1973
• Docket Number: No. B--4015,B--4015
• Parties: RANGER COUNTY MUTUAL INSURANCE COMPANY, Petitioner, v. CHRYSLER CREDIT CORPORATION, Respondent.
• Court: Supreme Court of Texas

Page 295

501 S.W.2d 295

RANGER COUNTY MUTUAL INSURANCE COMPANY, Petitioner, v. CHRYSLER CREDIT CORPORATION, Respondent.

No. B--4015.

Supreme Court of Texas.

Sept. 19, 1973.

Rehearing Denied Dec. 12, 1973.

Thompson, Coe, Cousins, Irons & Porter, Arthur W. Stone, Dallas, for petitioner.

Irion, Cain, Magee & Davis, Tedford E. Kimbell, Dallas, for respondent.

DANIEL, Justice.

This case involves the construction and effect of an automobile insurance binder which was not introduced in evidence. The suit was brought by Chrysler Credit Corporation, mortgagee, against Ranger County Mutual Insurance Company alleging that Ranger had issued a binder to its mortgagor, James Willie Edwards, insuring from risk of collision a 1970 Dodge automobile, with Chrysler's interest insured as a lienholder. Chrysler alleged and proved that such a binder was issued on February 15, 1971, but did not allege or offer evidence that the binder contract or any policy of insurance was in effect when the subject loss occurred on July 12, 1971. Ranger alleged that the binder was effective only until April 1, 1971, and expired by its own terms without any policy ever having been issued. It is undisputed that no policy was actually issued.

Chrysler not only failed to introduce the binder contract upon which it sued, but it objected to an introduction of a purported copy of same by Ranger. The trial court sustained the objection to this exhibit and copies of other exhibits offered by Ranger to show expiration of the binder contract by its own terms on April 1, 1971, on the grounds that a proper predicate had not been laid for the admission of secondary evidence. At the close of the evidence, Chrysler requested submission of no issues and both parties filed motions for a directed verdict. The trial court dismissed the jury, overruled Ranger's motion, and granted Chrysler's motion for judgment in the sum of $1,700.00. The Court of Civil Appeals affirmed. 492 S.W.2d 371. We reverse and rendered.

Chrysler contended and the Court of Civil Appeals held that the following admissions, stipulations and undisputed evidence were sufficient to support the trial court's judgment: that an automobile insurance binder was issued by Ranger on February 15, 1971, with Edwards as the named insured and Chrysler as the loss payee; that on the same day, A. V. May, Corsicana insurance agent who placed the policy with Ranger's recording agent, notified Chrysler of the binder and said, 'actual policy will follow in a few days'; that Ranger paid a loss to Edwards and Chrysler resulting from a collision on February 24, 1971; that Ranger notified the producing agent, A. V. May, in writing on or about March 22, 1971, that it was unable to approve the application of Edwards for insurance on the automobile, but would extend its binder until April 1, 1971; that if a policy had been issued, it would have been the Texas Standard Automobile Liability Insurance Policy, together with the Standard Form 112--A Loss Payable Clause for protection of lienholder; and that no notice was given by Ranger to Chrysler concerning its inability to issue a policy on the termination date of the binder.

It is undisputed that the insurance broker, A. V. May, had no agency agreement with Ranger. He merely acted for Edwards in obtaining the binder contract through Ranger's local recording agent. In fact, it was stipulated that 'Mr. A. V. May had no written agency agreement with the Defendant . . .' and that 'Ranger Allied Underwriters is the local recording agent for Ranger County Mutual Insurance Company for the purpose of issuing binders for automobile liability insurance.' May's letter to Chrysler was not as agent for Ranger. Thus, this appeal presents no questions relating to the effect of any direct contractual obligations or estoppels between the parties due to acts or omissions of A. V. May.

Ranger sought to introduce a purported copy of the original binder agreement, which recites that it is for a period of 40 days from February 14, 1971, and that 'liability hereunder shall terminate with the issuance of a policy, or upon date binder is otherwise terminated,' along with copies of two notices from Ranger to A. V. May dated March 22, 1971, stating that it could not approve the application of Edwards because of his driving record; but stating 'We are hereby extending the binder on this risk until 4/1/1971, a period of ten additional days coverage, in order to give you time to place coverage elsewhere.' Ranger, as Petitioner, does not complain here of the Court of Civil Appeals' holding that the trial court properly sustained Chrysler's objections to these documents. Its only point here is that there is no evidence in the record to support the holding of the Court of Civil Appeals that, as a matter of law, the binder contract was in force at the time of the loss.

The Court of Civil Appeals concedes that, 'If...