Pacific Fire Insurance Company v. Paul Donald, 148 Tex. 277

Mr. Justice Sharp delivered the opinion of the Court. Paul Donald brought this suit against four insurance companies, one of which is the petitioner, Pacific Fire Insurance Company, New York, New York, to recover for the loss of 5500 bales of hay which were destroyed by fire on October 6, 1935, while stored in a building situated in Bowie, Texas. Respondent based his action on an alleged oral contract between himself and Henry Moore, agent of petitioner.

The trial was to the court without a jury, and judgment was in favor of respondent and against petitioner, in the sum of $1,100 plus interest, and this judgment was affirmed by the Court of Civil Appeals, 217 S. W. (2d) 431. Petitioner’s application for writ of error contains only three points:

(1) That the Court of Civil Appeals erred in finding and holding that petitioner entered into a binding parol contract to insure hay owned by respondent; (2) that the Court of Civil Appeals erred in refusing petitioner’s request for findings of fact under grounds contained in his motion for rehearing; and (3) that the Court of Civil Appeals erred in overruling petitioner’s first point, which reads: “The court abused its discretion and therefore erred in refusing to dismiss this cause for want of prosecution.” This Court is limited to a consideration of the points contained in an application for writ of error, and all other points relied upon in the trial court and Court of Civil Appeals, and not contained in the application for writ of error, are waived.

Rule 476, T. R. C. P.; Railroad Commission v. Mackhank Petroleum Co., 144 Texas 393, 190 S. W. (2d) 802; Texas & Pacific Ry. Co. v. Perkins (Tex. Com. Appls), 48 S. W. (2d) 249. The controlling question presented here is whether there was any evidence to sustain the trial court’s finding that petitioner and respondent entered into a valid parol contract to insure respondent’s hay. Petitioner contends that there was no evidence to sustain the trial court’s finding on this point, and the writ of error was granted on this contention.

The law placed the burden on the trial court to determine the issues of fact in this case. The evidence may be conflicting, but the decisions of the trial court and Court of Civil Appeals on conflicting evidence are binding on this Court. Sid Katz, Inc. v. Walsh & Burney Co., 142 Texas 232, 177 S. W. (2d) 49, and cases cited.

Since the trial court decided all questions of fact against petitioner, and both the trial court and the Court of Civil Appeals held that the evidence supported the judgment in favor of respondent, the case presents a question of fact, and not a question of law, and this Court on review is not authorized to overrule the judgment of the trial court if it is supported by any evidence.

Article 1728, Vernon’s Texas Civil Statutes, 1948; Texas Power & Light Co. v. Doering Hotel Co., 139 Texas 351, 162 S. W. (2d) 938, and authorities cited. Since the trial court and the Court of Civil Appeals have determined the issues of fact in favor of respondent, it is unnecessary to set out in this opinion all of the evidence introduced in the trial court, and only the material parts of the testimony supporting the judgment of the trial court will be set out in this opinion. Paul Donald testified that during the summer of 1935 he bought some hay which he planned to store in Bowie, Texas.

He first contemplated placing it in a barn owned by Gilmer & Coker, and in July he telephoned Henry Moore, agent of petitioner, and requested the rate on about 5,000 bales of hay if stored therein. Moore called back and informed Donald of the rate, and also told him, “you know there are a lot of companies won’t take this hay business and I have one that will, and you have some policies with it, and it is an easier matter for a company to take a policy where there is a previous coverage with a man,” and told Donald that the company was the Pacific.

Donald told Moore to hold up the matter, as he was changing the storage to the lumber yard owned by Donald and his brother, and that once the hay was stored away he would tell Moore the number of bales to be insured, and Moore agreed to this. When the hay had been stored away in the lumber yard, Paul Donald on or about September 1st went by to check it and shut the gate, and before leaving for Wichita Falls he stopped by Henry Moore’s office and asked Moore to write the insurance on 5500 bales of hay at 20^ per bale, to which Moore agreed.

No rate or premium was ever mentioned in regard to storage in the lumber yard building, and as to the duration of the insurance, Paul Donald testified that there was “no definite understanding but I told him it wouldn’t be any two or three year program.” And Donald also testified: “I told him I would have it out of there before the winter was over.” Nothing further was said or done in regard to the insuranee. The lumber yard and the hay stored therein were completely destroyed by fire on October 6, 1935.

The next time the insurance of the hay was discussed by Donald and Moore was several days after the fire, when Donald stopped by Moore’s office to report the loss; and Moore denied any liability, asserting that Donald had not requested insurance to be written on the hay. The record discloses that Moore had written insurance before for the Donald brothers on other things than hay, and it appears that Moore would send them a bill for the premium some time later after the property was insured.

Donald introduced in evidence a former policy on the law library of Donald & Donald, issued by the Pacific Fire Insurance Company of New York, through its agent Henry Moore, dated February 15, 1934, for a term of "one year. Donald also introduced the statement that Henry Moore rendered for two policies on that library, both in Pacific, and one of which was the policy introduced in evidence. The statement shows policies dated February 15, 1934, total premiums of $71.89, with a cash payment of $40 on the premium, made on March 2, 1934; and balance due of $31.89.

The testimony of agent Moore corroborated that of Paul Donald to the effect that in the summer of 1935 he had had a conversation with Paul Donald concerning insurance on some hay to be stored in the Gilmer & Coker barn, and that he quoted Paul Donald a rate on hay if stored in that building. He denied having agreed to insure the hay in the lumber yard where it burned. On cross examination Henry Moore testified to the effect that when customers requested insurance, his usual procedure was to send them a bill for the premium the following month, and that on occasions he would carry over the bill another month.

The Legislature has delegated to the State Insurance Commission the power and authority “to prescribe, fix, determine and promulgate the rates of premiums to be charged and collected by fire insurance companies transacting business in this State.”

Article 4878 et seq., Vernon’s Texas Civil Statutes, 1948. See also

Article 4682a. Moore had no power to make insurance rates. That authority rests with the State Insurance Commission. The statutes of this State do not prohibit parol agreements of fire insurance. Republic Ins. Co. v. Poole (Tex. Civ. App.), 257 S. W. 624, writ of error refused; 24 Tex. Jur., p. 662, sec. 7. A parol contract to insure is valid and enforcible. Springfield Fire & Marine Ins. Co. v. Hubbs-Johnson Motor Co. (Tex. Com. App.), 42 S. W. (2d) 248; Cohen v. Continental Fire Ins. Co., 67 Texas 325, 3 S. W. 296, 60 Am. Rep. 24; Ginners’ Mutual Underwriters’ Ass’n v. Fisher (Tex. Civ. App.), 222 S.

W. 285; 24 Tex. Jur., p. 662, sec. 7; Cooley’s Briefs on Insurance (2d ed.), Vol. 1, p. 497; Appleman on Insurance & Practice, Vol. 12, sec. 7191. Donald testified that Moore agreed to write insurance in his favor on 5500 bales of hay at 20^5 per bale in the Pacific. Moore testified that the rate of premium on hay is promulgated on so much per hundred, and the rate he quoted to Donald was on the hay to be stored in the Gilmer & Coker barn, and the rate so quoted was so much per hundred on a basis of one year.

It is undisputed that Moore was the agent of petitioner and authorized to represent it in making insurance contracts. There is nothing in the record to indicate that Donald expected any other kind of policy than the usual standard form of policy in use by the insurer at the time. In view of this testimony, the rule stated in the note annotating the cases in connection with the opinion of the Supreme Court of Washington in the case of Chenier et al. v. Insurance Company of North America, 72 Wash. 27, 129 Pac. 905, 48 L. R. A. N. S. 319, Ann. Cas. 1914D, 649, is applicable. On page 653 of Ann.

Cas. 1914D the rule is stated as follows: “It is well settled that an oral agreement to insure against fire is presumed to be made in contemplation of a policy containing the terms and conditions in customary use, and impliedly to adopt the same, and it is on this ground that such agreements are sustained as complete and binding contracts.” In support of this rule a long list of decisions and authorities is cited. See also Connecticut Fire Ins. Co. et al. v. Fields (Tex. Civ. App.), 236 S. W. 790, and Dalton v. Norwich Union Fire Ins. Soc. (Tex. Com. App.), 213 S. W. 230.

And the risk will be regarded as beginning with the completion of the contract, which in this instance was when Moore agreed to insure the hay. Shubert v. McLain (Tex. Civ. App.), 27 S. W. (2d) 846; Western National Ins. Co. v. Le Clare, 163 Fed. (2d) 337; Potter et al. v. Phenix Ins. Co., 63 Fed. 382. There is no dispute over the fact that conversations were had relative to the original plan of storing hay in the Gilmer & Coker bam.

Moore quoted a rate on hay if stored in that barn, and that rate must have been based upon a consideration at least of the subject matter, risk, and duration, and it was in those conversations that the Pacific was mentioned. The only change by the parties was the location of the hay, from the Gilmer & Coker barn to the lumber yard. At most this would merely change the rate of premium, which would automatically be determined by the rates on file with the State Insurance Commission.

Hence there was needed only an agreement of the agent to insure the hay in the new location, and Donald testified that he so agreed to insure the 5500 bales at 20$ per bale in the lumber yard. These facts show that the parties expressly or impliedly considered the essentials of a valid oral contract. The trial court found that a valid oral contract of insurance was made by Moore as the agent of the Pacific Fire Insurance Company.

In reaching this conclusion the trial court was justified in construing the conversations between Moore and Donald in connection with the surrounding circumstances and previous dealings between the parties. Since the rates had been fixed by the State Insurance Commission, it was not essential that they be specifically agreed to by the parties. Robinson v. Franklin Fire Ins. Co., 225 Mo. App. 960, 35 S. W. (2d) 635; Globe & Rutgers F. Ins. Co. v. Eureka Sawmill Co., 227 Ala. 667, 151 So. 827; Globe & Rutgers F. Ins. Co. v. Draper, 66 Fed. (2d) 985.

Petitioner contends that the pleading and deposition by Paul Donald introduced in evidence, to the effect that he did not know with which company he had contracted, are binding on him. This is the second trial of this case. Both trials were before the same judge. The judgment entered in the first trial was set aside, and there is no contention made here that it is res judicata of the matters involved in the suit. The trial judge heard the evidence and passed upon the credibility of the witnesses.

Since the respondent in his testimony at the second trial named the petitioner, and no objection was made to this testimony, it was admissible under Rule 67 T. R. C. P. The general rule prevails that when a litigant admits positive and definite facts, which if true would defeat his right to recover, and such statements or admissions are not subsequently modified or explained by him to show that he was mistaken, although testifying in good faith, he is conclusively bound by such statements or admissions.

But in this instance Paul Donald explained his previous testimony, and the trial court accepted his theory of the case, and hence the general rule is not controlling. Stanolind Oil & Gas Co. et al. v. State, et al., 136 Texas 5, 145 S. W. (2d) 569, and authorities cited; Foster v. Woodward et ux., (Tex. Civ. App.), 134 S. W. (2d) 417; 17 Tex. Jur., pp. 576 and 581. This case was submitted to the court, and after hearing the evidence judgment was entered for respondent, as above indicated. Both the trial court and the Court of Civil Appeals found that there was sufficient evidence to support the judgment.

This Court will not set aside a judgment of the trial court unless it can be said, as a matter of law, that there was no evidence of a probative nature to support the judgment entered. We have examined the entire record, including the statement of facts, and have found evidence to support the judgment of the trial court. Therefore this Court is not justified in holding to the contrary. Gulf Production Co. et al. v. Continental Oil Co. et al., 139 Texas 183, 164 S. W. (2d) 488; Merrell et ux. v. Dorothy Hume Timmons, et vir 138 Texas 250, 158 S. W. (2d) 278; Beer v. Landman, 88 Texas 450, 31 S. W. 805; 11 Tex.

Jur., p. 871, sec. 113. We have considered the other questions presented, and find no reversible error. The judgments of the trial court and Court of Civil Appeals are affirmed. Opinion delivered October 12, 1949.