finding there was an accident when the action, the deliberate fumigation of a rice mill was performed negligently, and the effect was neither the intended nor the expected result had the fumigation been performed non-negligently
How later courts described this case
- finding there was an accident when the action, the deliberate fumigation of a rice mill was performed negligently, and the effect was neither the intended nor the expected result had the fumigation been performed non-negligently
- noting this Court’s prior holding "that an issue of waiver would have been raised but for the execution of a nonwaiver agreement the day after late notice of an accident had been received by the insurer”
- observing that contractual doctrine of waiver rests on principle “that any competent adult can abandon a legal right and if he does so then he has lost it forever”
- holding that even a non-waiver clause may be waived
Written by the judges who cited it.
The opinion
Dissenting Opinion
NORVELL, Justice.
Because of “waiver”, the Court has refused to give effect to the written non-waiver agreement executed by the parties on July 22, 1957. It is, in effect, said that the non-waiver agreement may mean nothing contractually because there is a fact issue as to whether the insurance company, at some time before the execution of the written agreement, intended to relinquish a known contractual right, namely, that of notice in accordance with the provisions of the insurance policy. This holding is not predicated upon fraud, overreaching, or other inequitable conduct which would in good conscience prevent a party to a contract from insisting upon its terms. Accordingly, I think that we should take the parties at their word.
The written contract plainly stated “that no action heretofore or hereafter taken by Massachusetts Bonding and Insurance Company shall be construed as a waiver of the right, if any, of the Massachusetts Bonding and Insurance Company to deny liability to the Orkin Exterminating Company, Inc. under a policy of insurance which is claimed by Orkin Exterminating Company, Inc. to cover claims asserted or which may hereafter be asserted by R. L. Williams and J. M. Chumney, doing business as a partnership under the name of Gulf Coast Rice Mills, * * * ” However, despite this rather carefully and clearly worded contractual statement made by the parties that there was no waiver on the part of the in-, surance company for “action heretofore taken”, i. e. prior to July 22,1957, this Court now holds that because of “action hereto *403 fore taken” the company has waived its right to deny liability upon the policy. It is said that, “The conduct of the (insurance) Company here is inconsistent in several respects with an intention to deny liability on the ground of delay in giving notice, and a genuine issue of the fact of waiver is thereby raised”. I cannot agree with this statement. An insurance company certainly has the right to investigate before being called upon to admit or deny liability upon a claim and non-waiver agreements are taken for that purpose. A judicial holding that some prior investigation would (depending upon a jury’s answer) operate to render ineffectual a non-waiver agreement subsequently made by the parties, would in part, at least, defeat the legitimate purpose of a bilateral non-waiver contract. The parties have contracted that past actions of the insurance company should not operate as a waiver and in the absence of fraud or overreaching, such contract should be respected.
Under the law of Texas, there are important distinctions between waiver and estoppel. The Court in its opinion recognizes this distinction, and although the Court of Civil Appeals based its decision at least in part upon estoppel, this Court adopts ■“waiver” as the basis of its holding that a summary judgment was erroneous. In view of this, I shall not discuss estoppel other than to say that in my opinion the estoppel basis is also untenable. On July 22, 1957, Orkin Exterminating Company, Inc. was a free contracting agency. If it was willing to have the insurance company to defend the Gulf Coast Rice Mills action without an admission of liability, they were free to so contract.
I respectfully dissent from the judgment of the Court. I would reverse the judgment of the Court of Civil Appeals and affirm the judgment of the trial court.
GREENHILL, J., joins in this dissent.