DIAMOND v. DUNCAN.
(Nos. 2324, 3377.)
(Supreme Court of Texas.
June 26, 1915.)
1. Insurance ©=^103 — Agent of Insured-1 Failure to Reinsure — -Liability.
In an action against an insurance broker undertaking to keep property insured, that a policy in an insolvent company did not expire until throe months after the destruction of the property by fire did not relieve the broker from liability for the loss sustained by the insurer because of its worthlessness.
[Ed. Note. — For other cases, see Insurance, Cent. Dig. § 130; Dee. Dig. ©=»103.]
2. Insurance 103 — Agent of Insured-Failure to Reinsure — Liability—Damages.
In an action against an insurance broker undertaking to keep property 'insured and neglecting to secure valid new policies for a pe*956riod during which the property was destroyed by fire, the damages recoverable by the insured were to be diminished by the amount of the unpaid premiums thereon, or the cost of the insurance.
[Ed. Note. — For other eases, see Insurance, Cent. Dig. § 130; Dec. Dig. <@=103.]
3. Insurance <@=>103 — Failure to Reinsure —Liability—Pleading.
The right of the broker to have the amount of unpaid premiums deducted from the amount of the insured’s recovery was defensive matter which should have been pleaded.
[Ed. Note. — For other cases, see Insurance, Cent. Dig. 130; Dec. Dig. <@=103.]
4. Insurance <@=103 — Failure to Reinsure —Liability—Burden oe Proof.
The burden was upon the broker to prove the amount of the unpaid premiums, if admissible in mitigation of damages on the general issue.
TEd. Note. — For other cases, see Insurance, Cent. Dig. § 130; Dec. Dig. <@=103J
5. Insurance <@=103 — Failure to Reinsure —Liability.
In an action against an insurance broker for negligence in not securing valid new policies on property destroyed by fire, where the burden of showing the amount of unpaid premiums allowable in mitigation of damages was on the defendant and there was no proof on the question, the court’s failure to submit it was not error, and the refusal of his request for a peremptory verdict on the theory that plaintiff and failed to make out his case by his omission of such proof was proper.
[Ed. Note. — For other cases, see Insurance, Cent. Dig. § 130; Dec. Dig. <§=103.]
6. Appeal and Error <@=1171 — Reversal-Amount of Recovery.
In an action against an insurance broker for negligence in failing to obtain valid policies on property destroyed by fire, where a judgment in plaintiff’s favor was affirmed in the Court of Civil Appeals and in the Supreme Court, and where the amount of the premiums which should have been allowed in reduction of damages was trivial in comparison with the amount in controversy, the judgment will not be reversed on rehearing.
[Ed. Note. — For other eases, see Appeal and g. <@= Error, Cent. Dig. 1171.1 4546-4554; Dec. Di
Hawkins, X, dissenting.
On motion for rehearing.
Motion overruled.
For former opinion, see, 172 S. W. 1100.
PHILLIPS, C. J.
[1] It was erroneously stated, in the opinion of the late Chief Justice rendered upon the original hearing of the case, that the smaller of the two policies of insurance involved — the one for $200 — had expired before the fire occurred. This policy did not expire, according to its t.erms, until about three months after the destruction of the property by fire. Under the findings of the jury, however, this circumstance does not in our opinion relieve the plaintiff in error of liability for the loss sustained by Duncan because of the worthlessness of the policy.
[2,3] We should possibly advert to one other matter. It is again urged by the plaintiff in error in his motion that the judgment in Duncan’s favor for the loss sustained by him on account of Diamond’s failure to comply with his agreement to renew the former’s policies, as found by the jury, ought now to be reversed because of the charge on the measure of damages, and the refusal of his requested instruction for a peremptory verdict. The contention is that the charge did not require that the jury in assessing the damages should deduct from the amount of the policies the amount of the premiums thereon, or the cost of the insurance if Diamond had performed his agreement. It appears that Duncan had not paid the amount of the premiums; and we agree that his measure of damages was the amount o.f the policies, less the premiums or cost of the insurance. We accordingly held on the original hearing that Diamond would have been entitled to such credit in the assessment of the damages, if it had been pleaded by him; but inasmuch as he did not plead it, nor prove it, he was in no position to complain.
We are still inclined to the view that this was defensive matter and ought to have been pleaded. Right of Way Oil Company v. Gladys City Oil, etc., Co., 157 S. W. 737, 51 L. R. A. (N. S.) 268. It should not be overlooked that the policies were in fact issued by Diamond as the insurance agent, and the cause of action arose upon his agreement, substantially, to maintain the insurance on the property in that amount, the worthlessness of the policies within his knowledge, and his failure to notify Duncan that they had become worthless. If Duncan had not paid for them, Diamond was, of course, entitled to offset the amount of the premiums; but we think it was incumbent upon him to make the plea.
[4, 5] If the proof was admissible in mitigation of the damages on the general issue, without the necessity of a pleading, it is clear that the burden was upon Diamond to make it. He was an insurance agent. Duncan was not. The cost of the insurance or the amount of the premiums was a fact peculiarly within his knowledge. Certainly he was in better position to know what the amount was than Duncan. It is elementary law that the burden of proof is on him who best knows the facts, or in whose knowledge the fact peculiarly lies. 1 Greenleaf on Evidence, § 79; Ryan v. Railway Co., 65 Tex. 13, 57 Am. Rep. 589. In his brief in the Court of Civil Appeals Diamond contended that there was no sufficient proof to show what the amount of the premiums was, and that therefore the alleged error could not be cured by remittitur. Sinqe the burden was upon him to make the proof, and, according to his contention, there was no proof on the question, the charge of the court was not erroneous in failing to submit it. The requested instruction for a peremptory verdict proceeded upon the theory that Duncan had failed to make out his case in having *957omitted to make this proof, and for the same reason the trial court correctly refused it.
[6] This case was tried in January, 1910. The judgment in Duncan’s favor was affirmed in the Court of Civil Appeals on June S, 1911. A writ of error was granted hy this court October 5, 1911. The case was decided here, affirming both judgments, January 27, 1915. At best, the amount of the premiums was trivial in comparison with the amount properly in controversy. We overrule the contention of the plaintiff in error on the question for the reasons we have stated. But, if the question were not subject to be thus disposed of upon a ground that is clear and satisfactory, it would in our opinion amount to almost a travesty to now reverse these judgments and order a new trial on account of a .small error in the amount of the verdict.
With the correction noted in the original opinion, the motion for rehearing is overruled.
HAWKINS, J.
(dissenting). Plaintiff in error complains that the charge to the jury assumed, as a matter of law, that Diamond was under the affirmative duty of notifying Duncan of the insolvency of Traders’ Insurance Company, or of procuring for Duncan new and solvent insurance. I find no merit in that contention, inasmuch as “renew” in the charge was apparently used by the trial court and understood by the jury as including keeping up the insurance, in a solvent company. And it seems to have been so treated by the Court of Civil Appeals.
However, the charge of the court on the measure of damages was clearly erroneous in permitting recovery of the full amount of insurance which, under the jury’s finding, Diamond should have had kept in force for Duncan. From that sum should have been deducted the amount of the premiums which such substitute insurance would have cost Duncan. His recoverable damages, if any, should be merely compensatory.
The amount of such premiums was not established by the evidence; consequently, the amount which Duncan was entitled to recover was not established; wherefore plaintiff failed to make out his case. Logically, then, defendant’s requested special charge No. 1, directing a verdict for defendant, should have been given. This point was duly presented in the motion for a new trial, and in the assignments of error filed in the trial court, and in appellant’s brief in the Court of Civil Appeals, at page 54 et seq., under “Second Assignment of Error” (No. 5, in Tr.), and four distinct propositions thereunder, and was also duly presented to this court. The establishment of the proper measure of damages being an essential and affirmative part of Duncan’s case, there rested upon Diamond no duty of pleading or proving what the cost of the premium for such substitute insurance would have been. I do not consider the cost thereof a matter so peculiarly witjfin the knowledge of Diamond ,as to constitute an exception tó the general rule, nor as bringing this .case within the rule which this court announced in Right of Way Oil Co. v. Gladys City Oil, Gas & Mfg. Co., 157 S. W. 737, 51 L. R. A. (N. S.) 268, in which this court said:
“If, however, the person who produced the oil acted in good faith, he would be entitled to have deducted the cost of bringing it to the surface and to the market. The contention of plaintiff in error is in effect that the owner must concede the good faith of the trespasser and prove that which is Jmown only to his adversary, the cost of producing the oil.” (Italics mine.)
Emphasis was there laid on the fact that the cost of producing the oil was known to the trespasser only. Here, it seems to me, it would have been easy for the plaintiff to have proved what the substitute insurance would have cost Duncan. My present strong conviction is that the rule announced in the cited case ought not to he applied to the facts of this case; although I confess that, since this motion was filed, I have been unable to find opportunity for going thoroughly into that question. I think that, at least, the motion for a rehearing should be granted.