Court Opinion

ID: 9776760
Source: CourtListenerOpinion
Date Created: 2023-08-29 19:44:02.807363+00
Date Added: 2024-06-11T07:32:42.319934
License: Public Domain

WALKER, Justice
(dissenting),
I respectfully dissent. In so far as relevant here, the face of the policy provides as follows:
REPUBLIC INSURANCE COMPANY
A Capital Stock Company Home Office
2727 Turtle Creek Boulevard Dallas, Texas 75219
INSURED: Silverton Elevators, Inc. Silverton, Tex. 792S7
In Consideration of the stipulations and conditions herein or added hereto which are made a part of this policy . . . does insure Silverton Elevators, Inc. and legal representatives . . . against direct loss resulting from any of the Perils (listed below) which have a premium inserted opposite thereto (Column 6) and only on the property described and located as provided hereon.

DESCRIPTION OF PROPERTY
Item No. Amount of Insurance See definitions of Building, Household Goods, Stock, Furniture, Fixtures, and, or Machinery, and Contents
7,000.00 [Description of Building]
3,000.00 HOUSEHOLD GOODS
* * *
Unless otherwise provided, insurance on personal property shall cover only while in the described building.

Loss on building items shall be payable to ASSURED ONLY Address as Mortgagee or Trustee, as their interest may appear at time of loss, subject to Mortgage Clause (without contribution) printed elsewhere in this policy.
Subject to Article 6.13 of the Texas Insurance Code, 1951, liability hereunder shall not exceed the actual cash value of the property at the time of loss, ascertained with proper deduction for depreciation; nor shall it exceed the amount it would cost to repair or replace the property with material of like kind and quality within a reasonable time after the loss, without allowance for any increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair, and without compensation for loss resulting from interruption of business or manufacture; nor shall it exceed the interest of the insured, or the specific amounts shown under “Amount of Insurance.”
*756The following definitions, among others, appear on the second page of the policy:
HOUSEHOLD GOODS — Insurance on household goods shall include all personal property, usual to a residence, of the insured and his family.
Household Goods Extension — At the option of the insured, up to 10% of the insurance written specifically on “Household Goods” in a residence may be applied as excess insurance as follows: (a) on household goods of the insured elsewhere on the premises and when temporarily removed to any other location in the United States of America, Canada, and Mexico, and, (b) while on the premises on household goods of servants and on household goods of others in the custody of the insured.

CONTENTS — Insurance on “Contents” shall include all property included above in “Stock,” “Furniture, Fixtures, and, or Machinery,” “Household Goods,” and, if not otherwise insured, personal property of the employees, officers, or partners; any loss to such personal property shall, at the option of this Company, be adjusted with and payable to the insured.
The policy on its face purports to insure “Household Goods,” but only while in the described building and only to the extent of the interest of Silverton Elevators, Inc. therein. Upon looking to the definitions, which are expressly incorporated by reference in the face of the policy, we find that the policy covers “all personal property, usual to a residence, of the insured and his family.” Coverage was thus extended in an appropriate case to the family of the insured. At the option of the insured, up to 10% of the stipulated amount might be applied as excess insurance to the household goods of servants and household goods of others in the custody of the insured. There is, however, nothing in the policy extending the full coverage to household goods not owned by the named insured. If the policy had been written to insure “Contents,” the personal property of employees and officers of the insured, including Tid-well, would have been protected. This was not done, and the policy as written does not purport, and cannot reasonably be construed, to provide full coverage for property owned by persons other than Silverton Elevators, Inc.
The provision limiting liability to the interest of the insured obviously applies to both real and personal property. Since the Court does not hold otherwise, no purpose will be served by a discussion of the point. According to the majority opinion, the provision limiting liability “falls within the category of ownership provisions which may be waived; the insurer may be es-topped from denying liability to the true owner on policies issued in the names of third parties covering the risks on identified property with full knowledge by the company that the property is actually owned by one for whose benefit the policy was written and maintained.” (Emphasis supplied) It will be noted that the Court there assumes that the policy covered Tid-well’s property, and that is the question presented for decision. There is no contention and has been no suggestion that the ‘limitation of liability would, in itself and under the facts of this case, deprive respondents of a recovery to which they might otherwise be entitled under the provisions of the policy. It is, however, one of the provisions that should be considered in determining the coverage afforded by the policy as written. It must be eliminated in some way before the policy can be said to^ cover all household goods, regardless of by whom owned, located in the described dwelling. This the Court attempts to do by holding that the limitation of liability provision has been waived. I do not agree.
The net effect of the majority holding is to extend the policy coverage and create an entirely different contract by waiver or estoppel. That is contrary, of course, to the established rule in Texas and most other jurisdictions. Washington Nat. Ins. Co. *757v. Craddock, 130 Tex. 251, 109 S.W.2d 165; Great American Reserve Ins. Co. v. Mitchell, Tex.Civ.App., 335 S.W.2d 707 (wr. ref.) ; Massachusetts Bonding & Ins. Co. v. Dallas Steam Laundry & Dye Works, Tex.Civ.App., 85 S.W.2d 937 (wr. ref.); 43 Am.Jur.2d, Insurance § 1184; Annotation, 1 A.L.R.2d 1139.
As pointed out by the Supreme Court of Michigan in Ruddock v. Detroit Life Ins. Co., 209 Mich. 638, 177 N.W. 242, “to apply the doctrine of estoppel and waiver here would make this contract of insurance cover a loss it never covered by its terms, to create a liability not created by the contract and never assumed by the defendant under the terms of the policy.” Neither doctrine can properly be made to serve that purpose. In Great American Reserve Ins. Co. v. Mitchell, Tex.Civ.App., 335 S.W.2d 707 (wr. ref.), the court reviewed the authorities and correctly stated the Texas rule as follows:
. Waiver and estoppel may operate to avoid a forfeiture of a policy, but they have consistently been denied operative force to change, re-write and enlarge the risks covered by a policy. In other words, waiver and estoppel can not create a new and different contract with respect to risks covered by the policy. This has been the settled law in Texas since the decision in Washington Nat. Ins. Co. v. Craddock, 130 Tex. 251, 109 S.W.2d 165, 113 A.L.R. 854. . . .
None of the cases cited in support of the waiver holding is pertinent here. Most of them involved the so-called sole and unconditional ownership clause, which provided that the entire policy would be void if the interest of the insured was other than sole and unconditional ownership. Others involved a stipulation that the policy would be void in case of a change of ownership unless otherwise provided by agreement endorsed on the policy. The policy in Old Colony Insurance Co. v. Messer, Tex.Civ.App., 328 S.W.2d 335 (wr. ref. n. r. e.) covered the dwelling that was damaged by fire, but it contained a provision limiting liability to the interest of the insured and another making the policy void if the insured had concealed any material fact. These provisions as well as lack of insurable interest were pled by the insurance company in bar. Although the jury made findings tending to support an estoppel theory, the Court of Civil Appeals affirmed the trial court’s judgment in favor of the true owner on the basis of its holding that the provisions in question had been waived by issuance of the policy and acceptance of the premiums with knowledge of the ownership of the property. Be that as it may, there was no question of coverage in the case, and the decision does not stand for the proposition that the limitation of liability may be waived out of the policy for the purpose of determining coverage.
There is no sole and unconditional ownership or similar provision involved in the present case. Petitioner does not urge lack of insurable interest and, contrary to the suggestion in the majority opinion, we are not concerned with a “requirement that the named insured own or possess a beneficial interest in the insured property.” The provision limiting liability to the interest of the insured is not a requirement, warranty or representation. It is not a condition of forfeiture, but it is of considerable importance here in determining the property covered by the policy. So far as I am able to determine, the present case is the first in which our Court has held, albeit somewhat circuitously, that an insurance company may “waive” itself into liability for a loss not covered by the policy.
It is my opinion that respondents are not entitled to recover on the policy as written, and that is all they have attempted to do thus far. Tidwell may show his right to recover by offering evidence and obtaining findings that establish mutual mistake and the terms of the true agreement. See Aetna Ins. Co. v. Brannon, 99 Tex. 391, 89 S.W. 1057. The trial court would then be in position to enter a judgment based on the *758coverage actually agreed upon and intended by the parties. It would also be in position to insure that petitioner receives the appropriate premium for the risk actually assumed. I would reverse the judgments of the courts below and remand the cause in the interest of justice.
GREENHILL, C. J., and POPE and REAVLEY, JJ., join in this dissent.