American Central Ins. Co. v. Terry

Texas Commission of Appeals

American Central Ins. Co. v. Terry

26 S.W.2d 162

CourtTexas Commission of Appeals

DecidedMarch 26, 1930

DocketNo. 1341—5462

StatusPublished

Cited by31 cases

This text of 26 S.W.2d 162 (American Central Ins. Co. v. Terry) is published on Counsel Stack Legal Research, covering Texas Commission of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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American Central Ins. Co. v. Terry, 26 S.W.2d 162 (Tex. Super. Ct. 1930).

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Opinion

SHARP, J.

For a partial statement of the nature and result of this suit, we quote as follows from the opinion of the Court of Civil Appeals:

“This suit was filed by the defendant in error Terry against the plaintiff in error for recovery of $4,500 and accrued interest on a fire insurance policy. The property insured was the residence of the defendant in error, situated in Clarksville, Tex., which was .burned' in December, 1925. The defendant in error claimed that there was a total loss, and -asked judgment for the full amount of the policy. The Paris Building & Loan Association intervened in the suit, claiming to be a creditor of the insured to the amount of $2,717.05 secured by a lien on the proceeds of the policy. In addition to filing exceptions [163]*163and a general denial, tlie plaintiff In error sought to abate tbe action upon tbe ground that an agreement for an arbitration had been entered into between it and the defendant in error Terry, and no award had been made by the arbitrators selected. It pleaded the following provisions of the policy:

“ ‘In the event of disagreement as to the amount of loss the same shall, as above provided, be ascertained by two competent and disinterested appraisers, the insured and this company each selecting one, and the two so chosen shall first select a competent and disinterested umpire; the appraisers together shall then estimate and appraise the loss, stating separately the sound value and damage, and failing to agree shall submit their differences to the umpire; and the award in writing of any two shall determine the amount of such loss.’

“The policy further stipulated that the loss should not become payable until sixty days after the ascertainment, estimate, and satisfactory proof of the loss therein required had been received by the company, including an award by the appraisers appraising, if any had been required. The court overruled the plea in abatement, and submitted the following issue, which was answered in the affirmative:

“ ‘Was the building in issue in this ease after the fire a total loss? Answer yes or nb. In this connection you are instructed that there can be no total loss so long as the remnant of the structure standing is reasonably adapted for use as a basis on which to restore the building to the condition in which it was before the injury. Whether it is adapted depends upon the question whether a reasonably prudent owner, uninsured, desiring such a structure as the one in question was before the injury, would, in proceeding to restore the building to its original condition, utilize such remnant as such basis.’

“Other interrogatories were propounded, the answers to which were rendered unnecessary by the affirmative answer to the first interrogatory. Upon the answer given the court rendered a judgment against the plaintiff in error for the full amount of the policy.

“This is the second appeal in this case. The first is reported in 298 S. W. 658, to which reference is made for a fuller statement of the pleadings.

“There are, w:e think, but two questions presented which call for special consideration and discussion. One is, did the court err in overruling the plaintiff in error’s' plea in abatement? The other is, does the evidence support the verdict of the jury finding that there was a total loss?

“It appears that, before any suit was filed, the defendant in error Terry entered into a written agreement with the plaintiff in error to arbitrate their differences as to the extent of the loss. Terry claimed that the loss was total, while the'representative of the plaintiff in error contended that it was only partial. After reciting the provisions of the policy relating to arbitration in case of disagreement as to the amount of the loss, the arbitration agreement contained the following stipulation:

“ ‘Witnesseth: That J. P. Kunkel and A. L. Hartshorne shall appraise and ascertain the sound value of the loss .upon the property damaged and destroyed by the fire of December 13, 1925; as specified below. Provided, that the said appraisers shall first select a competent and disinterested umpire, who shall act with them in matters of difference only. The award of any two of them made in writing in accordance with this submission shall be binding upon both parties as to the amount of such loss. It is expressly understood that this appraisement is for the purpose of ascertaining and fixing the amount of sound value and loss and damage only to the property hereinafter described, and shall not determine, waive, or invalidate any other right or rights of either party.’

“The two arbitrators selected failed to agree upon the amount of the loss, and also failed to agree upon an umpire. After that failure, this suit was filed; the plaintiff’s petition alleging that the property insured was totally destroyed. In the first trial the jury found that the building was only partially destroyed, but that judgment was reversed on appeal and the case remanded. It was in the second trial that the jury returned a verdict finding, in effect, that the building was totally destroyed.”

An appeal was made to the Court of Civil Appeals for the Sixth Supreme Judicial District by the American Central Insurance Company, and the case was affirmed. 15 S.W. (2d) 81. A writ of error was granted by the Supreme Court.

The policy involved in this suit contains the following provisions:

“In the event of disagreement as to the amount of loss the same shall, as above provided, be ascertained by two competent and disinterested appraisers, the insured and this compány each selecting- one, and the two so chosen shall first select a competent and disinterested umpire; the appraisers together shall then estimate and appraise the loss, stating separately’sound value and damage, and, failing to agree, shall submit their differences to the umpire; and the award in writing of any two shall determine the amount of such loss. * *■ *

“No suit or action on this policy, for the recovery of any claim, shall be sustainable in any court of law or equity until after full [164]*164compliance by the insured with all the foregoing requirements.”

Article 4929, Revised Civil Statutes, reads as follows: “A fire insurance policy, in ease of a total loss by fire of property insured, shall be held and considered to be a liquidated demand against the company for the full' amount of such policy. The provisions of th.s article shall not apply to personal property.”

The test of what constitutes a total loss 'has been settled in this state and in an exhaustive and able opinion, rendered by the Supreme Court, speaking through Justice Denman in the case of Royal Ins. Co. v. McIntyre, 90 Tex. 170, 37 S. W. 1068, 1074, 35 L. R. A. 672, 59 Am. St. Rep. 797, after reviewing many authorities and cases, says: “After a careful consideration ' of the question, we are of opinion that there can be no total loss of a building so long as the remnant of the structure standing is reasonably adapted for use as a basis upon which to restore the building to the condition in which it was before the injury; that whether it is so adapted depends upon the question whether a reasonably prudent owner, uninsured, desiring such a structure as the one in question was before injury, would, in proceeding to restore the building to its original condition, utilize such remnant as such basis.”

In the case of National Liberty Insurance Co. v. Dansby (Tex. Com. App.) 260 S. W.

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