Dumphy v. Commercial Union Assurance Co. ( 1915 )

The statement of facts of this case we copy from the opinion of the Court of Civil Appeals, as follows:

"December 26, 1906, appellee issued its policy for $2000, insuring Mrs. Dumphy during a period of five years from that date against loss by fire of a dwelling house owned by her. Afterwards Mrs. Dumphy sold the property so insured to one Hunter for $3500. Of this sum $1000 was then paid by Hunter, and the remainder was covered by his promissory notes in favor of Mrs. Dumphy. December 19, 1907, by a writing on the policy, appellee consenting, Mrs. Dumphy assigned her interest therein as owner of the property to Hunter's wife, to whom, it seems, the conveyance of the property from Mrs. Dumphy had been made. On the same day (December 19, 1907) appellee attached to the policy a rider as follows: "Any loss that may be ascertained and proven to be due the assured under this policy shall be held payable to Mrs. Matilda Dumphy as interest may appear." February 20, 1909, Hunter, without the consent or knowledge of either appellee or of Mrs. Dumphy, procured the issuance by another company of another policy, insuring the property in the further sum of $500, payable to Mrs. Dumphy as her interest appeared. May 22, 1909, the property was destroyed by fire. The notes made by Hunter to Mrs. Dumphy being unpaid, she, joined by her husband and the Hunters, sought by the suit they instituted against appellee a recovery of the amount of the policy it had issued. The Hunters afterwards took a non-suit, and the action was prosecuted by Mrs. Dumphy and her husband alone. The appeal is from a judgment in appellee's favor, rendered on a verdict instructed by the trial court.

By their assignments appellants complain of the action of the court in refusing to instruct a verdict in their favor and in instructing a verdict in favor of appellee.

The policy contained these stipulations:

"This entire policy, unless otherwise provided by agreement hereon or added hereto, shall be void if the insured now has or shall hereafter make or procure any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy."

"If, with the consent of this company, an interest under this policy shall exist in favor of a mortgagee or of any other person or corporation having an interest in the subject of insurance other than the interest of the insured as described therein, the conditions hereinbefore contained shall apply in the manner expressed in such provisions and conditions of insurance relating to such interest as shall be written upon, attached or appended hereto."

There are two questions in this case, either one of which is sufficient, in the judgment of the writer, to reverse the judgment of the Court of Civil Appeals.

First. The procurement of the subsequent policy of insurance under the conditions stated by Hunter without the knowledge or consent of Mrs. Dumphy, did not have the effect to destroy her rights in the policy.

Second. Mrs. Dumphy's rights in the policy were created by the rider, and were exempted from forfeiture by the terms of the policy, because the conditions of forfeiture expressed in the policy were not "written upon, attached or appended to the policy."

There is some conflict of authority upon the question as to the construction of the policy in this case, and upon which the Court of Civil Appeals has chosen to rest its opinion with that construction which is favorable to the insurance company and against the insured.

We think that it is well established, especially by the decisions of this court, that the conditions of forfeiture contained in an insurance policy must be strictly construed as against the company. British-American Assurance Co. v. Miller,91 Tex. 419, 39 L.R.A., 545, 66 Am. St., 901, 44 S.W. 60; East Texas Fire Ins. Co. v. Kempner, 87 Tex. 229, 47 Am. St., 99,27 S.W. 122; 19 Cyc., p. 656, sec. 3, and note.

Following this rule, the construction of the policy and rider in this case would be that Mrs. Dumphy is not affected by those conditions of forfeiture in the policy which are not reiterated, referred to or endorsed upon or in anywise made a part of the policy.

The procurement by Hunter of the policy of $500, payable to Mrs. Dumphy, without her consent, could not in any reasonable construction of the statute or of law make a forfeiture for her, since she had no part nor lot in the making of the contract, and knew nothing of it. It can in no sense whatever be construed as her act, nor is it the act of the owner of the property or the payee in the original policy, and Hunter was not a payee and had no interest except as husband to the payee in the original policy.

We, therefore, conclude that the trial court committed error in instructing the jury to find for the insurance company, and the Court of Civil Appeals also erred in affirming that judgment, for the reasons herein given, which are too plain, as we regard it, to admit of argument. It is, therefore, ordered that the judgments of the Court of Civil Appeals and the District Court be reversed, and the cause remanded to the District Court for further trial.