Southern Nat. Ins. Co. of Austin v. Barr

• Decision Date: 15 May 1912
• Citation: 148 S.W. 845
• Parties: SOUTHERN NAT. INS. CO. OF AUSTIN v. BARR.
• Court: Texas Court of Appeals

148 S.W. 845

SOUTHERN NAT. INS. CO. OF AUSTIN v. BARR.

Court of Civil Appeals of Texas. Austin.

May 15, 1912.

Appeal from District Court, Travis County; Geo. Calhoun, Judge.

Action by Mrs. W. B. Barr against the Southern National Insurance Company of Austin. From a judgment for plaintiff, defendant appeals. Reversed and rendered.

Geo. S. Wright, of Dallas, and W. P. Allen, of Austin, for appellant. Fiset & McClendon, of Austin, for appellee.

RICE, J.

Appellee brought this suit against appellant to recover the sum of $687.20, claimed as a balance due her on a policy of insurance in the sum of $1,000, issued by it covering her residence, which had been partially destroyed by fire.

Appellant answered by general denial, and specially that at the time of the fire there was on the property $3,850 insurance in the Royal Exchange Assurance Company, which, under the terms of defendant's policy, should contribute to the loss; that defendant's proportion of the loss and damage to the property was $312.80, which sum had been paid by it in full settlement of plaintiff's claim.

By supplemental petition, plaintiff replied that the Royal Exchange Assurance Company's policy provided for forfeiture, if other insurance was secured by plaintiff; that the securing of the defendant's policy avoided the Royal policy; and that such void policy was not insurance, within the meaning of the pro rata clause of defendant's policy.

It appeared from the evidence that appellee, on February 7, 1908, took out a policy of insurance on her residence in the Royal Exchange Assurance Company of London, England, for the sum of $3,850, which expired February 7, 1911. This policy contained the following provision: "This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the insured now or shall hereafter make or procure any other contract of insurance, whether valid or not, on the property or any portion thereof covered, in whole or in part, by this policy."

On June 9, 1909, appellee took out a policy of insurance in the Southern National Insurance Company, appellant, for $1,000, covering the same building for a period of one year from date of issuance. The fire occurred February 19, 1910, resulting in a partial loss of said building, estimated at $1,517.09. The second policy contained, among other provisions, the following: "This company shall not be liable under this policy for a greater proportion of any loss on the described property * * * than the amount hereby insured shall bear to the whole insurance, whether valid or not, * * * covering such property." Appellee did not obtain or procure the consent of the Royal Exchange Assurance Company for this additional insurance; nor was any such consent entered upon such policy when the second policy was taken out; nor, indeed, is it claimed that she did obtain such consent, but it is conceded that said company was not even apprised thereof till after the fire. Subsequent to the loss and prior to the institution of this suit, appellant paid to Mrs. Barr, appellee herein, the sum of $312.80, being in full, as it claimed, of the amount due her under its policy, contending that the clause in its policy, above quoted, only rendered it liable for said amount, which was its proportionate share of said loss.

The court instructed the jury, in effect, that on account of the taking out of the second policy, without the consent of the first company, that the policy in said Royal Exchange Company eo instanti became void under its terms and conditions, and constituted no insurance upon the premises of plaintiff described therein, and ceased to affect the question of the liability of the first company under the claim for proportionate payment, and refused a peremptory instruction in behalf of appellant. There was a verdict and judgment in favor of appellee for the amount sued for, and appellant has prosecuted this appeal, assigning the action of the court in both respects as error.

It seems that formerly, where insurance policies contained a provision limiting the insurer's liability to a proportionate part of the loss, based upon the "whole amount insured," that the courts held that the "whole amount insured" embraced only subsisting valid policies at the time of the loss. See Hand v. Insurance Co., 57 N. Y. 41; Forbush v. Insurance Co., 4 Gray (Mass.) 337; Hygum v. Insurance Co., 11 Iowa, 21. Since then, however, doubtless for the purpose of protecting themselves against the necessity of contesting with the assured any question of the validity or invalidity of other existing policies, a provision limiting the liability to no greater proportion of the loss than the sum insured bears to the whole insurance, whether valid or not, was inserted in the policies, which provision has been held to be reasonable. We do not believe that the first policy, under its provisions, became absolutely null and void, ipso facto, by reason of the issuance of the second policy, but are inclined to the opinion that such second policy was, by reason thereof, voidable only since, notwithstanding the happening of this contingency, said company had the right to waive said provision and continue said policy in force. It is said in 19 Cyc. p. 746, on the subject of additional insurance, that "upon the assumption that the assured will be less careful to protect his property from loss in proportion as the amount of his insurance is increased a usual stipulation of the policy is one that the contract shall be vitiated if additional insurance shall be procured on the property, without the insurer's consent. Such provision is valid and reasonable. There is a strange conflict of opinion as to whether the policy becomes void ipso facto, or whether the doing of the prohibited act renders the policy only voidable at the instance of the insurer. A number of courts give a literal effect to the stipulation, and avoidance immediately results. Other courts assert that the provision is inserted for the benefit of the company and may be waived by it, as any other provision intended for its benefit; and hence the policy is voidable only."

"The term `void' is equivocal. It may import absolutely null, or merely voidable. It is an indefinite expression that has no fixed meaning, and what is only `voidable' is often called `void.' It is a common practice of Legislatures and courts to use the words `void' and `voidable' interchangeably, where the distinction between them is not material to the question or case under consideration.

"`Void' has with lexicographers a well-defined meaning as of no legal force or effect whatsoever, or null and incapable of confirmation or ratification. But it is sometimes and not infrequently used in enactments, in opinions, in contracts, and in arguments in the sense of voidable; that is capable of being avoided. The word `void,' when used in any of these instruments, will therefore be construed in the one sense or the other as shall best effectuate the intent in its use, which will be determined from the whole language of the instrument and the manifest purpose it was framed to accomplish.

"Where the word `void' is used to secure a right or to confer a benefit on the property, it will, as a rule, be held to mean null and incapable of confirmation; but, if used respecting the rights of individuals capable of protecting themselves, it will often be held to mean voidable only."

The above extracts are from cases collated in volume 8, Words and Phrases, p. 7334. To the same effect is the text in 29 American & Eng. Ency. Law, p. 1068. So that, if the clause in the first policy be given the construction justified by the above authorities (which accords with our belief), then the fact that additional insurance was taken out by Mrs....