Brown v. American Transfer & Storage Co.

CONCURRING OPINION

GARWOOD, Justice.

I concur in the result with respect to the question of American’s entitlement to offset or credit on account of the insurance proceeds collected by Brown. The case of Wichita City Lines v. Puckett, 156 Tex. 456 , 295 S.W.2d 894 (1956) did not involve insurance having a waiver of subrogation clause. In my view that opinion’s statements respecting “clear and unambiguous” language to be “strictly construed” in order for such an offset or credit to be proper, should not be applied to a waiver of subrogation case where, as contemplated by the parties, the property involved in the transaction is insured by one party under a policy containing such a waiver in favor of the other.

Ordinarily, the only purpose of a waiver of subrogation in such circumstances is to extend a measure of liability protection to the party in whose favor the waiver is made, at essentially no cost to the insured party. This is a reasonable and legitimate use of insurance, and should, without artificial restrictions, normally be given effect where the presence of such insurance is not purely fortuitous and incidental so far as concerns the party in whose favor the sub-rogation waiver is made. If the agreement between the parties expressly or impliedly requires insurance having a waiver of sub-rogation, or if for the noninsured party the existence of such insurance is an express or implied condition of the transaction or any of its material terms, this should ordinarily suffice to require that policy proceeds paid the insured party be applied to reduce any liability which the party in whose favor the waiver is made would otherwise have to the insured for covered damage. If the transaction is not so conditioned and the agreement does not require insurance having a subrogation waiver, but such is nonetheless procured in connection with the transaction and pursuant to the mutual contemplation of the parties, the same result should obtain if an express or implied agreement or understanding between the parties to that effect is otherwise shown or if there is reasonable detrimental reliance by the party in whose favor the waiver is made.

Here, however, the insurance was purely fortuitous and incidental as to American. *940 The agreement between Brown and American did not require Brown to carry any insurance, nor did it provide that if insurance were carried it would contain a waiver of subrogation clause in favor of American. The insurance was entirely optional with Brown and was in no sense a condition on American’s part to the transaction or any of its terms. Although such insurance was in fact purchased by Brown through American (in its capacity as an agent), there is no testimony whatever by either Brown or American as to any express or implied agreement, understanding or intention in regard to either the waiver of subrogation provision or American’s entitlement to credit insurance proceeds paid Brown against liability it might have to him for covered damage. Nor do any of the documents between Brown and American speak to this matter in any way. There is no indication whatever of any detrimental reliance on American’s part (it apparently relied on the provision of its contract with Brown limiting its liability to a total of $25).

American points to the bill of lading’s provision that “[a]ny carrier or party liable on account of loss or damage to any of said property shall have the full benefit of any insurance that may have been effected upon or on account of said property.” However, there is no evidence that this document was part of the agreement between Brown and American, or that American relied on the quoted provision. The bill of lading was issued by Columbia Export Packers, Inc. (not by American, which described itself as a warehouseman, not a common carrier) and there is no evidence it was received by Brown, or that he was aware of its terms, prior to the delivery of the goods in Alaska. The insurance company paid Brown’s claim under a “Loan and Trust Receipt” form purportedly obligating him to repay the insurance company its “loan” to him out of any recovery he might effect from third parties for the damage in question. The form, in its “explanatory note,” in essence says that it is designed to circumvent the usual “benefit of insurance” clause in bills of lading. Subsequent to the insurance payment American wrote Brown expressly asserting that the insurance company had the right to recover from American what it had paid Brown if American were responsible for the damaged condition of the goods.

In my opinion, American’s pleadings fairly raised its claim to an offset or credit on account of the insurance proceeds paid Brown. Although the strict standards set out in Wichita City Lines v. Puckett, supra, are not properly applicable, American nevertheless failed to tender any evidence sufficient to sustain its entitlement to such relief.