Underwriters at Lloyds, London v. Harkins, 93

• Citation: 427 S.W.2d 659
• Decision Date: 10 April 1968
• Docket Number: No. 93,93
• Parties: UNDERWRITERS AT LLOYDS, LONDON et al., Appellants, v. T. I. HARKINS et al., Appellees. . Houston (14th Dist.)
• Court: Texas Court of Appeals

Page 659

427 S.W.2d 659

UNDERWRITERS AT LLOYDS, LONDON et al., Appellants, v. T. I. HARKINS et al., Appellees.

No. 93.

Court of Civil Appeals of Texas Houston (14th Dist.).

April 10, 1968.

Rehearing Denied May 8, 1968.

Robert A. Hall, J. Eugene Clements, Baker, Botts, Shepherd & Coates, Houseton, for appellants.

Tom Alexander, Jonathan Day, Butler, Binion, Rice, Cook & Knapp, Houston, for appellees.

SAM D. JOHNSON, Justice.

This was a suit on a livestock insurance policy brought by the assureds, T. I. Harkins and Tony Bellardi, who are appellees here. The suit was brought on a Lloyds' Livestock Policy under the provisions of which the insurer agreed to pay to the assureds the actual value of a race horse, Benedicto, provided the horse died while the policy was in force. The insurance policy in question characterizes the duration of insurance coverage as 'from noon 1st November, 1961 to 31st October, 1962, both days inclusive.' Benedicto became sick on October 14, 1962. He subsequently died four days after the recited policy expiration date, on November 4, 1962. Notification of death, the only notice of any kind given to the Underwriters, was given the next day, November 5, 1962.

The insurance policy contained a 'Thirty Days Extension Clause' which recited as follows: 'In consideration of the premium paid hereon, it is hereby agreed that this insurance is extended to cover the death of any animal hereby insured occurring within thirty days after the expiry date specified in this Insurance as a result of any accident occurring, or illness or disease manifesting itself, during the period of this Insurance, provided that the accident, illness or disease has been notified to the Underwriters in writing prior to the said expiry date of this Insurance and subject otherwise to all the terms and conditions of this Insurance.'

Benedicto was a race horse who had a highly successful career. While in transit from Kentucky to Houston, Benedicto manifested symptoms of shipping fever, which is a respiratory infection. The driver of Benedicto's van phoned Benedicto's trainer, Mr. Garrison on October 14, 1962, and notified him that the horse was not shipping well, and that Benedicto was being examined by a veterinarian in Nacogdoches. The driver also gave T. I. Harkins, one of the appellees, this same information. On October 15, 1962, the date of Benedicto's arrival in Houston, he was again seen by a veterinarian, Dr. E. H. Williams. Between the first date, October 14, 1962, the November 5, 1962, the date of death, Benedicto was examined and treated by veterinarians on some seventeen occasions. During this period, Dr. Williams, a Houston veterinarian, felt that Benedicto was improving and would do all right. Those that had occasion to see Benedicto seemed to have confidence that he was improving and would recover.

It wasn't until two or three days before Benedicto died that he became dull and listless, went off his feed, and though he improved the next day, relapsed and died rather quickly. From the time of Benedicto's arrival in Houston until after his death, appellee, T. I . Harkins, was in Louisiana where his mother was in critical condition. Harkins was generally informed of Benedicto's condition as he stayed in contact with his Houston office by phone. It was not shown, however, that the appellee, Tony Bellardi, was unavailable during this time. Other employees apparently were in daily contact with Benedicto during all of this period.

A post-mortem examination was conducted by Dr. Paul H. Kramer, a Houston veterinarian, which revealed that Benedicto died of pneumonia. Both Dr. Kramer and Dr. Williams testified that the condition which led to Benedicto's death manifested itself before the expiration date of the policy and that, regardless of treatment, Benedicto's condition was probably irreversible a number of days before his death.

In response to special issues the jury found, in substance, that the illness or disease which caused Benedicto's death on November 4, 1962, had manifested itself prior to October 31, 1962; the illness or disease contracted by Benedicto on or before October 14, 1962, was reported to appellants within a reasonable time; the failure of appellees to notify the insurance company of the illness or disease contracted by Benedicto on or before October 14, 1962, did not result in actual harm, detriment and prejudice to the appellants; the illness or disease which actually caused Benedicto's death was reported to the insurance company within a reasonable time after it manifested itself; the failure of appellees to notify the insurance company prior to October 31, 1962, of the illness or disease which caused Benedicto's death did not result in actual harm, detriment and prejudice to the appellants; the failure of appellees to notify the insurance company after October 31, 1962, of the illness or disease which caused the death of Benedicto did not result in actual harm, detriment and prejudice to the appellants; and that the actual value of Benedicto at the time of the first manifestation of the disease or illness which caused his death was $5,000.00.

The trial court entered judgment on the verdict for the appellees and against the appellants in the sum of $5,000.00 and appeal is duly perfected to this court. Appellants present some 25 points of error, but we believe there are four basic contentions.

First, that appellees are precluded from recovery since Benedicto died four days after the livestock policy expired, the thirty day extension clause never having become operative. By its terms, the policy of insurance was to expire at noon, October 31, 1962. There was thus no insurance coverage on the date of Benedicto's death four days later unless there was an extension of the duration of the policy. Appellees' position is that their notice of Benedicto's death was effective to render operative the 'Thirty Days Extension Clause' thus extending the contract beyond the date on which it would otherwise have expired and that their notice of death on November 5, 1962, satisfied the contractual requirement of notification of accident, illness or disease in writing prior to the expiry date of the policy of insurance. We do not agree.

The policy stated, '* * * this insurance is extended to cover the death * * * occurring within thirty days after the expiry date * * * as a result of any * * * illness or disease manifesting itself, during the period of this insurance, Provided that the accident, illness or disease has been notified to the Underwriters in writing prior to the expiry date * * *.' (Emphasis added). It required notice to the Underwriters of illness, not death, prior, not after, the expiration date of the policy. The extension requirement is plain, definite, certain and unambiguous. By the policy terms, affirmative action on the part of the appellees was necessary to prevent the automatic termination of the policy on October 31, 1962, and it was uncontested that appellees failed to give such notification.

'Where the terms of an insurance policy are plain, definite and unambiguous, the courts cannot vary these terms * * * courts will not so construe plain language as to make a contract embrace that which it was intended not to include.' Royal Indem. Co. v. Marshall (Tex.Sup.Ct.), 388 S.W.2d 176. We cannot make a new contract for the parties but must give effect to the agreement that is theirs. '* * * a contract is to be construed in accordance with its plain language * * * terms used in an insurance contract, like any other contract, are to be given their plain, ordinary and generally accepted meaning unless the policy itself shows them to have been meant in a technical or different sense.' General Am. Indem. Co. v. Pepper, 161 Tex. 263, 339 S.W.2d 660.

Similar interpretation is applied to expiration dates of policies of insurance. 'Courts cannot disregard a plain unambiguous statement in the policy as to the expiration date, in the absence of an allegation of accident, mistake, or fraud.' Appleman, Insurance, Sec. 7175. 'In the absence of an allegation of accident, mistake, or fraud, the court could not disregard the plain and unambiguous statement in the policy that the expiration date thereof was at noon, March 19, 1932.' Dillon v. General Exchange Ins. Corp., Tex.Civ.App., 60 S.W.2d 331, no writ hist. In the case at bar, there were no allegations of fraud, accident or mistake. The parties are therefore bound by the clearly expressed terms of the policy.

By its unambiguous terms the thirty day extension clause never became operative in the absence of the required notification that was necessary to activate the extension. Recovery is therefore precluded as a matter of law, since Benedicto died four days after the expiration date of the policy in question.

Appellants' second contention is that plaintiffs are precluded from recovery because they failed to give notice of Benedicto's illness, such notice being a condition precedent to recovery. This 'immediate notice' provision, it should be noted, is altogether separate from the previously discussed notice provision required to keep the policy in force after its expiration date.

Condition number six of the policy provided, 'It is a condition precedent to any liability of the Underwriters hereunder that * * * (b) * * * In the event of any illness, disease, lameness, injury, accident or physical disability, the Assured shall immediately, at his own expense, employ a qualified Veterinary Surgeon and shall, if required by the Underwriters, allow removal for...