Reliance Ins. Co. of Philadelphia v. Dalton

• Decision Date: 17 March 1915
• Docket Number: (No. 5401.)
• Citation: 178 S.W. 966
• Parties: RELIANCE INS. CO. OF PHILADELPHIA v. DALTON.
• Court: Texas Court of Appeals

178 S.W. 966

RELIANCE INS. CO. OF PHILADELPHIA v. DALTON.

(No. 5401.)

Court of Civil Appeals of Texas. Austin.

March 17, 1915.

Error from District Court, McLennan County; Richard I. Munroe, Judge.

Action by Crate Dalton against the Reliance Insurance Company of Philadelphia.

Judgment for plaintiff and denial of a new trial, and defendant brings error. Reversed and remanded.

Wm. Thompson, of Dallas, and Jno. S. Patterson, of Austin, for plaintiff in error. Williams & Williams and Witt & Saunders, all of Waco, for defendant in error.

KEY, C. J.

Crate Dalton, as plaintiff, bought this suit against the Reliance Insurance Company of Philadelphia, as defendant, and sought to recover upon a fire insurance policy for $5,000, issued on May 17, 1912, on the Woman's Building of the Texas Christian University, in the city of Waco. The policy was issued in favor of Otto Stolley and others, but had been duly transferred to the plaintiff, who was the owner of the building at the time it was destroyed by fire on November 11, 1912.

The defendant answered by general and special exceptions, a general denial, and a special plea alleging, among other things, that the policy was void because the plaintiff had taken out other insurance on the property without the knowledge or consent of the defendant. The plaintiff replied to the latter plea and averred that the stipulation in the policy referred to was contrary to law and null and void, because of the fact that the state insurance board had placed the property in question in a classification known as co-insurance, and that under the rules and regulations adopted by that board the contract prohibiting additional insurance without the consent of the defendant was void. The defendant replied to that plea by a general demurrer, special exceptions, a general denial, and a special plea in which it was alleged, among other things, that the act of the Legislature authorizing the insurance board to make the rules and regulations pleaded and relied on by the plaintiff was unconstitutional and void.

Allan D. Sanford, as trustee for the defendant and other insurance companies, filed a plea of intervention, alleging that Otto Stolley and others had a mortgage on the property, and that the policy sued on was payable to them as their interest might appear; that the defendant had paid the mortgagees $2,005.74 and was subrogated to the interest of the mortgagees, which was evidenced by certain notes and liens which had been assigned to him as trustee for all of the companies having policies upon the property, and asked that he be subrogated to all the rights of Otto Stolley and others, and that, if the plaintiff recovered, he have judgment against him for the use of the defendant for the amount paid upon the policy, and that it be credited upon any judgment the plaintiff might obtain. There were some other pleas which we deem it unnecessary to refer to.

The court overruled all exceptions. The case went to trial before a jury, and resulted in a judgment in favor of the plaintiff against the defendant for $5,000 and in favor of Sanford, as trustee, for $2,005.74 as a credit on the judgment for the plaintiff, leaving a net judgment in favor of the plaintiff for the balance. The defendant's motion for a new trial was overruled, and it has brought the case to this court by writ of error.

Though the defendant in the court below has become the plaintiff in error in this court, and the plaintiff in that court is the defendant in error in this, in the further progress of this opinion the plaintiff and the defendant in the trial court will be designated as "appellant" and "appellee" in this court. With this explanation of the case, we shall now proceed to a consideration of the questions which we deem it necessary to decide.

1. Appellant complains of the action of the trial court in refusing to give a requested instruction directing a verdict for it. The contract of insurance, which is the policy sued on, limits the total amount of insurance to $15,000 and stipulates that the entire policy shall become void if the assured shall procure other insurance without the written consent of the company indorsed upon or added to the policy. The uncontradicted proof shows that the plaintiff procured other insurance upon the property, amounting to $10,000, without the written consent of the defendant, and therefore it is contended that the policy was void and the plaintiff not entitled to recover. Whatever may be the decisions in other jurisdictions, we regard it as settled in this state, in accordance with the weight of authority, that it may be shown by parol evidence that an insurance company has lost its right to invoke such a stipulation in the contract of insurance in either of three ways, which are: (1) By subsequent contract; (2) by waiver; and (3) by estoppel. Such, in effect, was the ruling of this court in British American Assurance Co. v. Francisco, 123 S. W. 1144, as to the question of parol waiver; and, by analogy, the same rule would apply as to subsequent contract or estoppel. In fact, in the law of insurance, estoppel and a waiver are often treated as one and the same, though the text-writers make a distinction between them. The case cited was approved by the Supreme Court, and therefore the law is settled against appellant's contention in this regard.

It is also contended on behalf of appellant that the testimony relating to the questions of consent to the additional insurance and of waiver or estoppel was not sufficient to justify the court in submitting either of those questions to the jury, and that therefore appellant's request for an instructed verdict should have been granted. In view of the testimony given by the appellee to the effect that he told appellant's agent Hays that he had procured the additional $10,000 insurance, we overrule that contention, although other testimony given by the same witness may tend to impair the force of that testimony.

2. Appellee testified that before procuring the additional insurance, and while consulting Miss Johnson, one of appellant's agents, about another matter, he told her that he intended to take out additional insurance upon the property as certain improvements then in progress or contemplated should progress, and stated that Miss Johnson requested him to place such additional insurance with her firm, known as Hays Bros. He also testified, as before stated, that he notified Hays before the fire that he had procured the $10,000 additional insurance. He stated that he met Hays on the street and told him of such additional insurance, and that Hays told him that he had better come to the office, as he did not regard such business as transacted unless it was done in the office. He also stated that he told Miss Johnson that he might increase his insurance to $30,000, and that she still insisted on the additional insurance being placed with her firm, and stated that his policies were what are known as co-insurance policies. The proof shows that under a co-insurance policy additional insurance is not prohibited. Both Hays and Miss Johnson denied having had any such conversations with and making any such statements to appellee. In charging the jury the trial court did not undertake to define the terms "waiver" and "estoppel," nor explain to them what facts would or would not constitute either; but, after briefly stating the nature of the suit, instructed the jury as follows:

"You are instructed that if you believe from the evidence that the plaintiff, Crate Dalton, after the policy sued on herein had been issued and transferred to him, gave notice or procured the giving of notice by the firm of Friedlander & Luedde to the firm of Hays Bros. of the writing or procuring of other policies or contracts of insurance on the property covered by the policy herein sued on by said firm of Friedlander & Luedde, or if you believe from the evidence that the said firm of Hays Bros., through Miss Johnson, waived the giving of notice...