Brown v. International Service Insurance Company

449 S.W.2d 491, 1969 Tex. App. LEXIS 2360

• Court: Court of Appeals of Texas
• Decided: December 31, 1969
• Docket: 7123
• Status: Published

Opinions

STEPHENSON, Justice.

This is an action brought by plaintiff upon defendant’s Scheduled Property Floater Policy of Insurance. The parties submitted this case to the trial court as an agreed case under Rules of Civil Procedure, rule 263. Judgment was rendered that plaintiff recover $250.00, as shown below, and plaintiff appealed. The parties will be referred to here, as they were in the trial court.

The agreed statement of facts showed the following in substance: One of the scheduled items listed in the policy of insurance was “One Gents’ Diamond Ring Center diamond l5%oo carat, Blue white, 2 baguette Diamonds with 18 Kt. mounting.” The limit of liability for this item stated in the policy was $2,000.00 After the policy of insurance sued upon became effective, the l5Jioo carat center diamond was removed from the gentlemen’s mounting and reset in a ladies’ platinum four-prong mounting with two baguette diamonds. Thereafter, the l5%oo carat diamond was damaged in that it was chipped from its girdle to its cutlet. That the l%o carat diamond was the same diamond as originally insured. That such diamond had a reasonable value of $2,-500.00 in the men’s mounting and in the ladies’ mounting. Both the men’s mounting with the two baguette diamonds and the ladies’ mounting with the two baguette diamonds had a reasonable value of $100.00 each. The reasonable value of the l5%oo carat diamond in its damaged condition was $735.00. The men’s mounting with two baguette diamonds was not damaged.

The judgment entered in the trial court contained this paragraph:

“The Defendant is correct in its contention that when the diamond was removed from the man’s mounting, as described in the insurance policy, and was mounted in a different mounting, it became an unscheduled item, and the Plaintiff is, therefore, entitled to recover $250.00.”

We consider the plaintiff’s points of error with the rules of law applicable to agreed cases before us. Both the trial court and this court are without authority to draw any inference or find any fact not embraced in the agreement unless as a matter of law such further inference or fact is necessarily compelled by the evi-dentiary facts agreed upon. Perry v. Aetna Life Ins. Co. of Conn., 380 S.W.2d 868 (Tyler, Tex.Civ.App., 1964, error ref. n. r. e.). There are no presumed findings in favor of the judgment. Strawn Independent School District v. Stuart, 21 S.W.2d 713 (Eastland, Tex.Civ.App., 1929), affirmed 36 S.W.2d 480 (Tex.Com.App., 1931).

We have concluded the trial court erred in denying plaintiff recovery under the policy for the damage to a scheduled item. Contracts of insurance are governed by the same rules as other contracts. First Texas Prudential Ins. Co. v. Ryan, 25 Tex. 377, 82 S.W.2d 635 (Tex.Com.App., 1935). The policy must be considered as a whole and effect be given to each part where reasonably possible. Where there is an ambiguity or uncertainty as to the meaning that construction must be given which is favorable to the insured. National Security Life & Cas. Co. v. Davis, 152 Tex. 316, 257 S.W.2d 943, 38 A.L.R.2d 764 (Tex.Sup., 1953). Contracts of insurance should receive a practical, reasonable and fair interpretation consonant with the apparent object and intent of the parties viewed in the light of their general object and purpose. San Jacinto Title Guaranty Co. v. Lemmon, 417 S.W.2d 429 (Eastland, Tex.Civ.App., 1967, error ref., n. r. e.).

We think a reasonable construction of this insurance policy indicates it was the clear intention of the parties to insure the l%o carat center diamond. The parties have agreed that the diamond damaged is the same diamond that was insured in this policy. A problem as to identification of an item to be insured could arise in many instances, and descriptive words must necessarily be used in the policy to be sure the insured and insurer have agreed upon the particular item covered. In this case, the policy under the heading “Scheduled Jewelry” described this diamond of a particular size as set in a gents’ mounting with two baguettes. Removing this diamond from the gents’ mounting and resetting it in the ladies’ mounting did not alter the fact that the l⁵%oo carat diamond was still insured, and did not in any way increase the risk that defendant was taking. There is no provision in this policy that the diamond could not be reset, which the insurer could have written into its policy if that had been its intention. Assume a case similar to the present in which the insured reset his diamond into another gents’ mounting with two baguette diamonds. Would the insurer still have made the same contention? Certainly the sex of the mounting could not in itself work a forfeiture of the coverage. The defendant accepted a portion of the $540.00 premium collected to insure the center diamond against damage and it would be unfair to the plaintiff to hold his protection forfeited because of the resetting, with no such provision written into the policy. There is no indication the premium would be any greater to insure a ladies’ ring than a gentlemen’s. The parties have agreed the 1⁵¾00 carat diamond had exactly the same value in both the ladies’ and gentlemen’s settings. The value of both mountings plus two baguette diamonds was agreed to be $100.00 and inconsequential in both instances.

The policy in the present case is easily distinguished from the policy in Automobile Ins. Co. of Hartford, Conn. v. Denny, 206 F.2d 401, 40 A.L.R.2d 865 (8th Cir., 1953) but the opinion is logical. In the Denny case, the insurance policy covered both unscheduled personal property and unscheduled jewelry. The trial court determined that a diamond in a bracelet at the time the policy was issued was not jewelry after being dismounted from the bracelet. The United States Court of Appeals for the 8th Circuit held it was jewelry and came under the policy provision for unscheduled personal jewelry, reversed the trial court’s judgment and limited the recovery to the policy liability provision on “Unscheduled Jewelry” to $250.00. The reasoning in that case supports our view that the word “jewelry” in the instant policy under “unscheduled jewelry” was used in a broad sense, and included mounted diamonds and if a diamond was dismounted it still included that diamond.

In an agreed case, it is the duty of this court to render such judgment as the trial court should have rendered. Hornsby v. Bartz, 230 S.W.2d 360 (El Paso, Tex.Civ.App., 1950, no writ). The parties agreed the center diamond had a value of $2,500.00 before it was damaged, and $735.00 after it was damaged. The difference of $1,765.00 is the amount plaintiff is entitled to recover, which is within the policy limit of $2,000.00.

The dissent in passing upon the amount of recovery treats the $2,000.00 shown by the policy to be “Limit of Liability” as if it were the agreed value of the diamond. The construction the majority places upon the $2,000.00 is that plaintiff may recover up to that amount according to the damage he has suffered. Using the strained construction that the dissent would impose in this case, if the agreed value of the diamond had been $4,000.00 and the difference in value before and after the damage had been $2,000.00, with a $2,000.00 limit of liability, the dissent would hold plaintiff could recover nothing.

Reversed and rendered.

5 . A portion of this automobile provision is quoted in footnote 1 in Miami Lincoln-Mercury, Inc. v. United Services Automobile Ass’n, 348 S.W.2d 276 (San Antonio, Tex.Civ.App., 1961, no writ). See also, Couch on Insurance 2d, § 6:3; 7 Amer.Jur.2d, Automobile Insurance, § 100-103, pp. 407-413.