Taylor v. Colonial Savings Ass'n

• Decision Date: 31 December 1975
• Docket Number: No. 16545,16545
• Citation: 533 S.W.2d 61
• Parties: Waymon Joel TAYLOR, Appellant, v. COLONIAL SAVINGS ASSOCIATION, Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 61

533 S.W.2d 61

Waymon Joel TAYLOR, Appellant, v. COLONIAL SAVINGS ASSOCIATION, Appellee.

No. 16545.

Court of Civil Appeals of Texas Houston (1st Dist.).

Dec. 31, 1975.

Rehearing Denied Feb. 12, 1976.

Hicks, Hirsch, Glover & Cochran, Iris Hefter Robinson, Houston, for appellant.

Vinson, Elkins, Searls, Connally & Smith, Frank C. Gibbs, III, Houston, for appellee.

ON MOTION FOR REHEARING

PEDEN, Justice.

We withdraw the opinion we filed on November 6, 1975, in this case and substitute this opinion for it.

The plaintiff, Waymon Taylor, appeals from the entry of a judgment notwithstanding the verdict. Colonial Savings, his mortgagee, had obtained a fire insurance policy on the mortgaged property at Taylor's expense, as authorized by the deed of trust, and Taylor sued Colonial, alleging that it negligently failed to obtain insurance coverage on his garage apartment, the one of his two buildings that was later damaged by fire.

The jury made these findings in response to special issues:

1) Colonial Savings Association undertook to provide fire insurance coverage on Mr. Taylor's premises.

2) Colonial or its officers or representatives were aware that there were two structures on the premises.

3) (submitted conditionally) Colonial or its officers or representatives failed to relay this information to the C. M. Burton Insurance Agency.

4) (submitted conditionally) The failure to relay this information to the C. M. Burton Insurance Agency was negligence.

5) (submitted conditionally) The negligence was the proximate cause of Mr. Taylor's not being able to recover for the fire loss to his property.

10) The jury did not find Taylor negligent in the way he examined his insurance policy.

12) Taylor failed to request issuance of fire insurance on the garage apartment.

13) The jury did not find this failure to be negligence.

14) Reasonable restoration cost was $5,594.20.

Taylor's first point of error is that the trial court erred in granting Colonial's motion for judgment notwithstanding the verdict on the grounds that the findings in answer to Special Issues 3, 4 and 5 should be disregarded for the reason that, as a matter of law, appellee had no duty to perform or omit to perform acts pertaining to the transaction in question. Taylor argues that a duty to act in a non-negligent manner arises whenever an affirmative course of action is undertaken, even though the service is gratuitous.

We look to the evidence. Taylor obtained the property in 1967 from a Mr. and Mrs. J. E. Reynolds, who conveyed it 'subject to the existing lien with Colonial Savings Association.' The Reynolds, as grantors, had executed a deed of trust to secure the lien. It contained this provision 'The grantors further agree . . . to keep all improvements now on or hereafter placed on the property hereby conveyed, insured against loss or damage by fire and other hazards . . . in such amounts as may be required by such holder (but such amounts shall never be required for more than the unpaid balance owing on said indebtedness, or the largest amount obtainable), with all loss or damage payable, by the terms of each policy, to the holder of said indebtedness as its interest shall appear . . . In the event the grantors fail . . . to furnish hazard insurance policies and pay the premiums thereon, as hereinbefore provided, the holder of the indebtedness . . . may . . . procure such insurance and add the amount paid . . . to the indebtedness held by it . . .'

Taylor testified that when he bought the Reynolds' equity in the property, Mr. Reynolds said it was insured and the insurance was being paid through Colonial. The next time he heard from Colonial was some time later, when the insurance had expired and Colonial had renewed it.

Colonial sent the following letter dated July 23, 1968:

'Mr. Waymon Joel Taylor, Sr.

1232 Richelieu Street

Houston, Texas 77018

'Re: Loan 800 - 0068

Property 846 E 26th St.

Sunset Heights

'Dear Mr. Taylor:

'The insurance coverage on the above captioned has expired today and we have bound $8,700 coverage with out agent on this property.

'Please let us know if you now live on this property. If you do reside at this address, you may wish to have this coverage written as a homeowner's instead of a straight fire policy.

'Let us know in order that we may have the agent write this coverage.

Yours truly,

/s/ Esse Priester'

Taylor agreed that he probably received this letter from one to three days after July 23, 1968. He testified that he called Colonial and told them he didn't live on the property and wasn't going to live there. He said he asked Colonial about liability coverage and was given the telephone number of the insurance agent, Mr. Burton. He talked to Burton about the two houses on the property. He received an insurance policy from Colonial a few days later, glanced at it and filed it away, thinking his buildings were adequately protected. He doesn't know whether the policy that Reynolds had covered both buildings. Reynolds told him the place was insured and he relied on that.

The insurance policy obtained by Colonial included $8,700 in fire insurance coverage. It provided that loss on building items be payable to Colonial as mortgagee or trustee as its interest may appear. The property described was 'One Comp. Asbestos Siding Building at 842 E. 26th Street, Houston, Texas . . .' The amount of Taylor's debt to Colonial is not in evidence. The title guaranty policy he obtained when he bought Reynolds' equity in January 1967, states that Reynolds' note to Colonial was in the original amount of $8,700.

Taylor based his suit on his claim that Colonial was negligent in not obtaining insurance coverage on the garage apartment; he neither pleaded nor proved that Colonial had any contractual duty to obtain insurance coverage on the garage apartment.

Taylor cites Fox v. Dallas Hotel Co., 111 Tex. 461, 240 S.W. 517 (1922) in support of his position that even though Colonial owed him no duty to obtain insurance coverage for him, once it undertook to do so it had a duty to act in a non-negligent manner. In that case the court held the Dallas Hotel Company liable for the death of Fox in a defective elevator maintained under contract by a third party. The hotel company contended that it owed Fox no duty, but the Texas Supreme Court held that it had a non-contract duty at common law to use property under its control so as not to injure others, stating that the general principle underlying this holding was this quotation from 1 Street's Foundations of Legal Liability 92:

"In every situation where a man undertakes to act or to pursue a particular...