Court Opinion

ID: 4908936
Source: CourtListenerOpinion
Date Created: 2021-09-07 23:35:17.824296+00
Date Added: 2024-06-11T08:13:18.246664
License: Public Domain

Opinion by
White, P. J.
§ 320. Fire insurance; stipulation in as to future use of building; distinction between .representation and warranty in a contract; case siatecl. Appellee brought this suit upon a fire insurance policy issued by appellant, and recovered judgment for the amount of said policy and interest. In the policy of insurance the property insured was described as a “one-story, shingle-roof building, to be occupied as foundry and machine-shops.” Held, that said stipulation as to the future occupancy of the building is a luarranly that said building should be so occupied, and not a mere representation that it would be so *389occupied. The distinction between a representation and a warranty in contracts of insurance is that the former need not be strictly complied with — a substantial compliance therewith being sufficient; and the compliance need only be as to those particulars which are essential to be disclosed to the insurer. But not so with a warranty; for in the case of a warranty the question of materiality does not arise, it entering into and forming a part of the contract. Under settled rules of construction the stipulation above quoted must be held to be more than a representation. It relates to a matter which in a material degree affected the risk, and is closely connected and in harmony with other stipulations of kindred purpose, and must be regarded as expressing the intention of the parties. It bears the recognized indicia of a promissory warranty. [May on Ins. 170-183; Wood on Fire Ins. 59, 60; Texas Banking Co. v. Stone, 49 Tex. 4; Goddard v. Ins. Co. 67 Tex. 69.] The trial court therefore erred in not holding said clause to be a warranty, and in instructing the jury in effect that appellee was entitled to recover unless it had “wilfully deceived” appellant with respect to the future occupancy of the building. Because of this error, the judgment must be reversed.
§ 321. Increase of risk; stipulation as to. Another stipulation in said policy provided that, “if the risk be increased bjr any means whatever,” the policy should be void. It appeared from the evidence that one Draughton, who was the president of appellee company, owned and operated a planing-mill situated near the insured property, but upon his own land, and that appellee company had no interest in or control of said planing-mill or premises; that, after the issuance of the policy of insurance to appellee, said Draughton changed a flue in his planing-mill, whereby the fire escaping from said mill greatly increased the risk upon the insured property, and in fact caused the destruction of said property. Held: The stipulation as to increased risk cannot be extended to cover risks created on the adjacent property of inde*390pendent proprietors who use their own premises in a legitimate manner. The individual acts of Draughton, with respect to his individual property, cannot be held to create a liability against appellee or to divest appellee of any right which it had under the contract of insurance.
November 23, 1887.
Reversed and remanded.