Thomas v. North River Ins. Co.

• Decision Date: 10 December 1925
• Docket Number: (No. 541-4281.)
• Citation: 277 S.W. 1041
• Parties: THOMAS et al. v. NORTH RIVER INS. CO.
• Court: Texas Supreme Court

Page 1041

277 S.W. 1041

THOMAS et al. v. NORTH RIVER INS. CO.

(No. 541-4281.)

Commission of Appeals of Texas, Section B.

December 10, 1925.

Error to Court of Civil Appeals of Third Supreme Judicial District.

Action by J. C. Thomas and others against the North River Insurance Company. Judgment for plaintiffs was reversed by the Court of Civil Appeals (264 S. W. 589), judgment rendered for defendant, and plaintiffs bring error. Affirmed.

Critz & Woodward, of Coleman, for plaintiffs in error.

Thompson, Knight, Baker & Harris and Jack F. Hyman, all of Dallas, for defendant in error.

SHORT, J.

The trustees of school district No. 7, Coleman county, Tex., brought this suit against the North River Insurance Company, a foreign corporation, to recover upon a fire insurance policy issued by defendant in error covering a period of five years, in which $18 in cash was paid and four promissory notes were executed and delivered for the remainder of the premium. There were two insurance policies in fact, one covering tornado, and the other fire. The alleged loss was occasioned by the destruction of the property by fire at a time when one of the notes was past due. There was a provision in all the notes stipulating:

"This note being given in payment of above policy of insurance, it is hereby agreed that, if this note be not paid at maturity, said policy shall be suspended, inoperative, and of no force or effect so long as this note remains overdue and unpaid."

The case was tried without the intervention of a jury, and resulted in a judgment in favor of the school district for the amount of the policy less the unpaid premium represented by the notes. The defendant in error, having given due notice of appeal, prosecuted its appeal to the Court of Civil Appeals, which, upon a consideration of the case, rendered judgment reversing the judgment of the trial court and rendering a judgment in favor of the defendant in error. The school district, through its trustees, has been granted a writ of error by the Supreme Court, based upon the importance of the question involved. A complete statement of the material facts is found in the opinion of the Court of Civil Appeals in volume 264 S. W. 589, on account of which we do not think further statement by us necessary.

The plaintiffs in error have presented thirteen assignments of error in their application for writ of error, nine of which relate to the alleged error committed by the Court of Civil Appeals in construing articles 4953 and 4955 of the Revised Civil Statutes of 1911, both of which are set out in the opinion of the Court of Civil Appeals and need not be repeated here.

Article 4953 provides that the policy issued by any life insurance company shall contain the entire contract between the parties, while article 4955 provides that all the provisions of the laws of this state applicable to life, fire, marine, inland, lightning, or tornado insurance companies, shall, so far as the same are applicable, govern and apply to all companies transacting any other kind of insurance business in this state, so far as they are not in conflict with provisions of law made especially applicable thereto. The contention of the plaintiffs in error is that the provision in the note above quoted is void for the reason that said provision is not contained in the policy as provided by article 4953, while the contention of the defendant in error, which has been upheld by the Court of Civil Appeals, is that the true construction of article 4955 has no relation to life insurance companies or in fact to fire, marine, inland, lightning, or tornado insurance companies, but only has reference to all companies transacting any other kind of business in this state except those mentioned.

It is obvious that in this case the insurance company had the authority, under the laws governing fire insurance companies, to put in the note a stipulation to the effect that, if the note was not paid at maturity, the policy should be suspended and of no force so long as the note remained overdue and unpaid. This we think is clear, regardless of the various statutes discussed, and without any necessity of determining the rather intricate questions as to whether article 4955 would make the law relative to life and other companies applicable to fire companies.

The State Fire Insurance Commission Act (Acts 1913, c. 106) was evidently passed for the purpose of regulating the business of fire insurance in the state, which it does at very great length. Section 24 of this act became article 4898, Vernon's Complete Texas Statutes, or Vernon's Sayles' Ann. Civ. St. 1914,...