Court Opinion

ID: 9653478
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:47:29.112078+00
Date Added: 2024-06-11T18:12:59.518396
License: Public Domain

STEPHENSON, Justice
(dissenting).
I respectfully dissent.
At the outset, it must be kept in mind that this was not an action brought to reform an insurance contract because of mutual mistake. There are no pleadings and no evidence even suggesting that the effective date of the policy was the result of mistake on the part of anyone. It is an action to avoid liability upon a contract of insurance issued by a duly authorized agent, because a loss had occurred before the contract of insurance was issued, but after the effective date of the policy.
It is agreed that no misrepresentation and no fraud is involved and that neither Bobby Hardin, acting for Burch in securing the policy of insurance, nor Barron, acting for Ideal Insurance Agency, had any knowledge of the loss at the time it was agreed the effective date of the insurance policy would be 12:01 a.m., July 18, 1967. It is also agreed that this policy was not actually signed until July 19, 1967, after the loss occurred about midnight, July 18, 1967. In other words, the policy showed on its face that even though it was dated July 19, 1967, that it was the intention of the parties to make the effective date July 18, 1967.
The appellant insurance company relies upon the case, Alliance Ins. Co. v. Continental Gin Co., supra, as supporting its contention that the parties to an insurance contract cannot cover a loss which has already occurred because it is against public policy. I do not think the Commission of Appeals in its opinion passed upon the question facing us in the present case. The facts of that case showed the insurance agent wrote a binder October 19, 1920, and then issued a policy October 20, 1920, and the property was *414destroyed by fire October 20, or 21, 1920. The real question for determination was which insurance policies were in effect at the time of the loss, and the court held the other policies had not been cancelled.
The Court of Civil Appeals decisions cited to us by the appellant insurance company do not pass upon the precise question facing us. In both Trinity Universal Ins. Co. v. Rogers, supra, and Mallard v. Hardware Indemnity Ins. Co., supra, the courts held the insureds had not accepted the renewal policies before the loss. Apparently, the insureds knew of the loss in each case before the attempted acceptance. In United States Casualty Co. v. Rodriguez, supra, both the insured and the agent for the insurance company knew of the loss before the policy was issued.
The Supreme Court of Texas lays to rest the question of an agent’s authority in Shal-ler v. Commercial Standard Insurance Company, 158 Tex. 143, 309 S.W.2d 59 (1958), in which it is written:
“It is undisputed that Howard Williams was licensed by the State of Texas and duly appointed by respondent as its local recording agent. As such, his authority and the extent thereof was controlled by the provisions of the insurance code and his designation as the type of agent prescribed therein. The purpose of the statute was to vest local recording agents with authority co-extensive with that of the company insofar as writing insurance is concerned and to remove all questions of the local agent’s actual or apparent authority from the field of cavil or dispute.”
Ideal Insurance Agency had the legal authority to issue this insurance policy, and there is no legal prohibition against predating the policy. No attempt was made to conceal the pre-dating, as the policy shows on its face the effective date and the issuance date.
The case of New Hampshire Fire Insurance Company v. Plainsman Elevators, Inc., 371 S.W.2d 68 (Amarillo Tex.Civ.App., 1963, writ ref. n.r.e.) involved a rider on an insurance policy already in existence. The installation of a drier was completed October 31, 1959, the rider was dated November 25, 1959, and made effective November 1, 1959 — the loss was sustained November 6, 1959. The insurance agent testified someone from insured’s office called him before November 6, 1959 for the additional coverage and that he collected a premium from November 1, 1959. The court allowed recovery on the policy, and, after quoting the Shaller case, supra, said:
“It is stated in 44 C.J.S. Insurance § 266, p. 1070 as follows:
“ ‘The effective date of the policy does not depend on the time of delivery if the parties have agreed on another date, and the policy is effective from the time agreed on, although it is not delivered until after loss. When so stipulated, the policy on delivery may take effect as of a previous date.’ ”
Assuming this insurance agent, Ideal Insurance Agency, had the authority to predate this policy, in the absence of knowledge of a loss or fraud, it is no answer to say the policy took effect July 18, 1967 at 12:01 a.m., unless there had been a loss before the time of actual issuance. ’ It seems to me it would be against public policy to permit an insurance company to collect an insurance premium for a policy of insurance that would be considered in effect only if there had been no loss. What is the purpose of having an insurance policy in effect if there is no coverage ? It is also contrary to the contract made by the parties, evidencing a clear intention that coverage be effective at 12:01 a.m., July 18, 1967.
I would affirm the judgment.