Court Opinion

ID: 4898228
Source: CourtListenerOpinion
Date Created: 2021-09-03 00:13:14.375633+00
Date Added: 2024-06-11T13:58:08.492018
License: Public Domain

I would reverse the judgment of the Court of Civil Appeals and affirm the judgment of the trial court for the reason that at the time the loss occurred the property was insured by two companies for an aggregate sum beyond the limits specified in the concurrent insurance clause of the policy sued upon.
The description of the property contained in the policy issued by American Insurance Company which is the basis of this suit was as follows:
Item No. 1, $3,000 on the one-story composition roof, frame building. Item No. 2, $500 on household goods contained in this dwelling.
Following this description is the clause providing that:
 "(N)o other fire insurance is permitted unless the total amount, including this policy, on each item is inserted in the blanks which follow: Item No. 1 $3,000.00; 2 $500.00; 3 $ _____; 4 $ _____; 5 $ _____."
In the "Basic Conditions" of the policy under the subheading, 'Conditions suspending or restricting insurance' it is provided that:
 "(T)his Company shall not be liable for loss occurring * * * while any other stipulation or condition of this policy is being violated."
This policy was issued to A. J. Kelley on August 18, 1956 and covered a period of one year.
On September 11, 1956 the Home Insurance Company issued a second policy to Kelley which also covered a period of one year. Item 1 of the description covered the same frame building as that described in the American policy while Item 2 covered household furnishings in the building. The amounts listed for the respective items were $1,500 and $1,000. This policy also contained a concurrent insurance clause in terms identical with that contained in the American policy except that no amounts were set forth in the five blank spaces appearing therein.
Likewise the Home policy contained a provision that the company would not be *Page 375 
liable for loss occurring 'while any other stipulation or condition of this policy is being violated.'
On October 1, 1956 the property was destroyed by fire. At this time the clause contained in the American policy prohibiting other fire insurance upon the property was being violated. It follows that the company was not liable for the loss under the plain provisions of the insurance contract. There is no occasion for construing the contract nor is it necessary to refer to clauses contained in insurance contracts in use before the present form was promulgated.
The theory that the Home policy was void so that it could not constitute additional insurance within the concurrent insurance clause contained in the American policy is untenable because strictly and technically speaking, the Texas concurrent insurance clause does not render the second policy void. It is a suspending and not a nullifying provision. At any time within a year following September 11, 1956 it could have been rendered fully effective by cancelling the American policy. Likewise, at any time after the Home policy was issued, the American policy could be rendered enforceable (within its time limitations) by cancelling the Home policy. For example, had Kelley cancelled either of the policies on September 25, 1956 the other would have been valid and binding on October 1, 1956 when the fire occurred.
But perhaps the better approach to the problem is to inquire as to the purpose of the clause limiting concurrent or additional insurance. This provision or condition 'is deemed reasonable and proper because the moral hazard should not be increased without the knowledge of the insurer. It is considered that not infrequently the motive for the preservation of property decreases as insurance mounts.' Heldreth v. Federal Land Bank of Baltimore, 111 W. Va. 602,163 S.E. 50, 51; Oates v. Continental Ins. Co., 137 W. Va. 501,72 S.E.2d 886.
It is one thing to be involved in a $3,500 risk upon a particular property, but quite another to be involved in a $5,500 risk upon the same property. The American Insurance Company says that it agreed to insure Kelley's property for $3,500 and pay fire losses up to that amount provided the risk were not increased by his procuring additional insurance. And it is hardly an answer to its demand that this proviso be enforced, to say that Home Insurance will not have to pay;-that its policy was void. We would immediately encounter numerous anomalies and contradictions if we were to accept the theory that the Home policy is rendered void, not through some independent circumstance wholly disconnected from the existence of the American policy, but solely because of a provision contained in the Home policy itself, operating in connection with the American insurance. The danger of overinsurance lies in the mental attitude of the insured toward the property. This is true whether the overinsurance causes an unfavorable attitude or the overinsurance is the result of fraudulent design. In reflecting upon the insurance risk we may consider the meditative arsonist. When he insures the property which he intends to destroy with as many companies as possible, does he know or contemplate that all policies except the first will be void under their respective concurrent insurance clauses? May we safely rely upon this tenuous theory in saying that the risk of the first insurer was not increased by the procuring of the additional policies?
In my opinion we cannot. This may be an exceptional fact case. The trial court's findings indicate that Kelley was not motivated by bad faith. Yet the ruling here will control cases which arise in the future and we must consider the general or overall situation. Overinsurance followed by fire in an indicia of arson. The purpose of the concurrent insurance clause is to afford protection against an insured's design or temptation to burn the property or to fail to properly protect it *Page 376 
from fire. It is a legitimate subject for contract as parties need not make their contractual rights depend upon whether a jury believes arson or unlawful destruction of property has actually occurred. Such things are often difficult and sometimes impossible to prove.
In Hunter v. United States Fidelity Guaranty Co., Fla.,86 So.2d 421, 422, the Supreme Court of Florida considered a clause which is very similar to the Texas concurrent insurance clause now in use, viz.:
 "Total insurance (Applies to Fire and Lightning Insurance only)-Other fire insurance is prohibited unless the total amount of fire insurance, including the amount of this policy, is inserted in the blanks provided on the first page of this policy under the caption Total Insurance. This Company shall not be liable for loss while the Insured shall have any other fire insurance prohibited by this policy."
The Florida Court said:
 "In the instant case the contracts were clear and unambiguous, and the assured agreed that he would take out no additional insurance. It was on this condition that the insurer assumed the responsibility of the insurance."
I would follow such ruling. Graham v. American Eagle Fire Ins. Co., 4 Cir., 182 F.2d 500; Aetna Ins. Co. v. Jeremiah, 10 Cir., 187 F.2d 95. This is a contract case and the trial court properly treated it as such despite his findings absolving Kelley of improper motives in procuring the Home insurance. The holding of the majority to my mind destroys the effectiveness of the concurrent insurance clause and thus removed a legitimate provision from the insurance contract. Accordingly I respectfully dissent from the order affirming the judgment of the Court of Civil Appeals.
GRIFFIN and HAMILTON, JJ., join in this dissent.