author: SPURLOCK, Justice.

text:
    NEW YORK UNDERWRITERS INSURANCE COMPANY, Appellant, v. Harold W. COFFMAN et ux., Appellee.
    No. 17718.
    Court of Civil Appeals of Texas, Fort Worth.
    July 16, 1976.
    Rehearing Denied Sept. 10, 1976.

      Thompson, Coe, Cousins & Irons, and Larry L. Gollaher, Dallas, for appellant.
    C. Coit Mock, Fort Worth, for appellee.
   OPINION

SPURLOCK, Justice.

Harold W. Coffman and wife, Ollie Coff-man, appellees, initiated this action by suing New York Underwriters Insurance Company, appellant, on a policy of insurance which included what is generally known as “Boiler and Machinery” coverage. This policy insured an apartment complex owned and operated by the plaintiffs. The policy in general insured plaintiffs from losses occasioned by accidental damage to the air conditioning system, loss because of interruption of business caused thereby, the cost of temporary repair and expediting expenses of the air conditioning machinery, and the cost of repair or replacement of the damaged machinery. The insurance company contends that it is not liable because the plaintiffs did not give it notice of the accident in the time and manner required by the policy; plaintiffs violated a policy provision which required them to give the insurance company an opportunity to examine the damaged parts before their removal from the premises; plaintiffs did not properly prove the amount of damage to the machinery and loss of rental because of the breakdown; the verdict was too large; and interest was improperly computed. The Coffmans assigned a cross-point of error claiming that the trial court awarded them less damages than required by the findings of the jury.

Judgment modified and, as modified, affirmed.

Plaintiffs are the owners of Randol Mill Terrace Apartments consisting of 80 units of 1 to 3 bedrooms each. These apartments were generally rented by written leases for periods of time ranging from 6 months to a year. No apartment was ever rented on a daily basis.

On June 24, 1972, the air conditioning system in the entire apartment complex failed due to a breakdown of a seventy-five (75) ton Bell & Gossett compressor. The air conditioning system was serviced regularly by Air Service Company. Immediately after the accidental breakdown plaintiff and this company tried to locate parts in this and other states in order to get the compressor operating again. Air Service Company, after much difficulty, obtained a seal and bearing which was put on the compressor; however, the compressor ran for only about five hours before breaking down again. The compressor failed and an in-speetion revealed that the new seal was damaged.

The company that had manufactured the compressor was no longer in business. Frantic attempts to obtain parts to make the compressor operable were unsuccessful. The temperature was unseasonably hot at the time of the breakdown, and for a week or more thereafter, reaching temperatures of 106, 110, and 112 degrees.

After the second breakdown plaintiffs employed another company, Texas Distributors, Inc., to install replacement machinery since repair parts were not available and many of the tenants were vacating their apartments. The new installation took place during the weekend of the fourth of July holiday. Immediately after the June 24 breakdown Mr. Coffman caused a telephone call to be made to the residence of the local agent who had issued this policy and gave notice of the accident to a member of his family and requested the agent to call the plaintiffs. The Coffmans also gave additional notice on July 10, 1972, which insurer stipulated complied with the written notice provisions of the policy.

The jury found: (1) the compressor failed due to accidental damage; (2) the insureds gave notice to the insurer as soon as practicable; (3) it was impractical to repair the damaged compressor; (4) the reasonable cost of repairs necessitated by the accident was $6,500; (5) the reasonable replacement cost of the damaged equipment was $8,500; (6) the insureds incurred additional costs for temporary repair in expediting the repair of the damaged property in the amount of $777.80; (7) the insured average daily rental income before the accident was $700.00 and the daily loss after the accident was $233.33; and (8) the insurance company did not waive the notice requirements of the policy.

This cause of action instituted by the Coffmans against the insurance company was consolidated and tried with the cause of action brought by Texas Distributors, Inc., against the Coffmans. This latter suit was brought for the purpose of collecting the balance due it by the Coffmans as a result of having replaced the air conditioning equipment, the breakdown of which gave rise to both lawsuits. Texas Distributors, Inc., recovered judgment against the Coffmans but no appeal was perfected concerning that portion of the controversy. Therefore, we will consider the issues between Texas Distributors, Inc., and the plaintiffs only to the extent it may affect the claims against the insurance company.

This policy consists of 21 pages. It contains two insuring sections, a declaration page, a coded schedule of insured property, four endorsements, including a “Use and Occupancy (Valued)” endorsement, endorsement B(l) “Coded Blanket Group Descriptions”, endorsement B(2), Boiler and Machinery Endorsement A(l), Boiler and Machinery Endorsement A(2), Boiler and Machinery Endorsement A(3).

The insurance company, by its first point, asserts the trial court erred in failing to render judgment that plaintiffs take nothing because they failed, as a matter of law, to comply with a notice condition of the “Boiler and Machinery” policy.

The policy contains several references to matters of notice. The first reference requires the insureds to send notice of accident by telegram or letter to the home office of the company or its Houston office and stipulates that recoverable damages for loss of income will not commence until 24 hours before the required notice is received at one of these two places. The second reference to notice provides that written notice shall be given to the company or any of its authorized agents as soon as practicable. Another requirement is that no action shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with a 11 the terms of the policy.

Article 5546, V.A.T.S., provides in part as follows:

“No stipulation in a contract requiring notice to be given of a claim for damages as a condition precedent to the right to sue thereon shall ever be valid unless such stipulation is reasonable. Any such stipulation fixing the time within which such notice shall be given at a less period than ninety-days shall be void, and when any such notice is required, the same may be given to the nearest or to any other convenient local agent of the company requiring the same.”
(Emphasis ours.)

We will first examine the evidence to determine whether the jury’s finding that notice of accident was given as soon as practicable is supported by the evidence.

Notice was given within 16 days without dispute and the record is replete with evidence concerning the circumstances under which plaintiffs were laboring during that period of time. These circumstances include, but are not limited to, the fact that the accident occurred on Saturday; the following day a call was placed to the local agent’s home and information was conveyed to a member of his household that the air conditioning had blown up, and the request was made for the agent to call the plaintiffs; plaintiffs thus thought they had given immediate notice to defendant; that during the long weekend of the 4th of July frantic attempts were being made to get the unit repaired, replaced, or back in operation; that attempts were being made to minimize the business loss with temporary aid to the tenants by borrowing fans and window units and making them available to the tenants as far as the supply would last, and other efforts made to minimize the business loss such as housing some of the tenants in motels. This was during a record heat wave. Great numbers of tenants were moving out. Plaintiffs’ call to the home of the local agent was never returned. On July 10 plaintiffs contacted an inspector who was employed by Hartford Boiler and Steam Company who had made the last annual inspection of the machinery to determine if it complied with state law. It also developed that this same inspector, a Mr. Massey, was also employed by New York Underwriters Insurance Company. That inspector came to the premises and made an inspection on July 10, the day he was notified. The insurance company contends it was prejudiced by the delay of 16 days in the giving of this notice. Mr. Massey testified that if he had been notified immediately he did not know of anything that would have been done differently from what had been done up to that time.

That portion of the notice requirement that notice must be given to the home office or to Houston, Texas, is void and unenforceable because same is in violation of the above quoted statute. American Surety Co. of New York v. Blaine, 115 Tex. 147, 277 S.W. 619 (1925); American Nat. Ins. Co. v. Smith, 97 S.W.2d 963 (Tex.Civ.App., El Paso, 1936, no writ hist.); National Liberty Ins. Co. v. Herring Nat. Bank, 135 S.W.2d 219 (Tex.Civ.App., Amarillo, 1939, writ dism., judgm. cor.); International Brotherhood, etc. v. Rodriguez, 193 S.W.2d 835 (Tex.Civ.App., El Paso, 1945, err. dism.); Bankers’ Reserve Life Co. v. Springer, 81 S.W.2d 756 (Tex.Civ.App., El Paso, 1935, writ ref.); Latham v. Mountain States Mutual Casualty Co., 482 S.W.2d 655 (Tex.Civ.App., Houston, 1st Dist., 1972, ref., n. r. e.).

We will next determine whether the giving of the notice within 16 days of the occurrence was a failure to give notice as a matter of law.

In United States Fidelity & Guaranty Co. v. Pressler, 185 S.W. 326 (Tex.Civ.App., Texarkana, 1916, writ dism.) that court held that the giving of notice within 16 days after the occurrence made the basis of the claim satisfied the requirement of an insurance policy that notice must be given immediately. The policy there involved was a liability policy.

The time element shown in the cases where notice was held not to be given as soon as practicable concerned periods of time greatly in excess of 16 days. LeSage v. Utilities Insurance Co., 131 F.2d 536 (5th Cir., 1942) (2 years); Hefner v. Fidelity & Casualty Co. of New York, 160 S.W. 330 (Tex.Civ.App., El Paso, 1913, certified question answered 110 Tex. 596, 222 S.W., 996) (10 months); Texas Glass & Paint Co. v. Fidelity & Deposit Co., 244 S.W. 113 (Tex.Com.App., 1922) (21 months); Overland Sales Co. v. American Indemnity Co., 256 S.W. 980 (Tex.Civ.App., Galveston, 1923, no writ hist.) (14 months); Southern Surety Co. v. Aronson, 5 S.W.2d 629 (Tex.Civ.App., Galveston, 1928, no writ hist.) (130 days); National Surety Corporation v. Diggs, 272 S.W.2d 604 (Tex.Civ.App., Fort Worth, 1954, ref., n. r. e.) (104 days); National Union Fire Insurance Company v. Bourn, 441 S.W.2d 592 (Tex.Civ.App., Fort Worth, 1969, ref., n. r. e.) (44 days); Edwards v. Ranger Insurance Company, 456 S.W.2d 419 (Tex.Civ.App., Fort Worth, 1970, ref., n. r. e.) (46 days); Klein v. Century Lloyds, 154 Tex. 160, 275 S.W.2d 95 (1955) (32 days).

We hold the provision of the insurance policy requiring the giving of notice as soon as practicable was met and the jury’s finding was supported by evidence of probative value, if same was not proved as a matter of law.

We further hold that the provision in the insurance policy which required the receipt of notice at the insured’s home office, or Houston, Texas, is void because it is in contravention of the statute here involved.

This point of error is overruled.

By its 5th point of error defendant contends that the trial court erred in failing to include in Special Issue No. 2, the notice issue, or in its accompanying instruction, that for there to be timely notice the insurance company must have had a reasonable time and opportunity to examine the property and the premises of the insured before repairs were undertaken or physical evidence of the accident was removed.

Special Issue No. 2, which was answered in the affirmative, and its accompanying instructions, is as follows:

“Do you find from a preponderance of the evidence that the plaintiffs gave notice to the defendant, New York Underwriters Insurance Company, of the said accident as soon thereafter as was practicable?
“In answering this special issue you are instructed that the phrase ‘as soon as practicable’ means within a reasonable time following the accident, taking into consideration all of the facts and circumstances surrounding the occurrence. Notice may be given by the plaintiffs personally or by others on their behalf. Whether an act or omission is reasonable depends upon the exercise of ordinary care, which means the care that a reasonably prudent person would exercise under the same or similar circumstances.”

The defendant objected to this issue “because by the instruction it is framed to a standard ‘as soon as practicable’, which is not the standard for notice provided by the policy. The policy provides that not only shall the notice be given as soon as practicable, but that it be given in such reasonable time that the Defendant company shall have an opportunity to examine the property and the premises of the insured before repairs are undertaken or physical evidence of the accident is removed. Therefore, such issue fails to submit the proper standard of notice as required by the policy in question.” (Emphasis ours.)

One of the notice provisions contained in the policy is as follows:

“When an Accident occurs, written notice shall be given by or on behalf of the Insured to the Company or any of its authorized agents as soon as practicable. . The Company shall have reasonable time and opportunity to examine the property and the premises of the Insured before repairs are undertaken or physical evidence of the Accident is removed, except for protection or salvage.” (Emphasis ours.)

The record reflects that the company who regularly serviced this air conditioning equipment advised plaintiffs the compressor had to be torn down and remanufactured and this would take from 8 to 10 days under the best of circumstances. The plaintiffs then requested a price for a replacement unit and were quoted the price of $18,000.00 to $20,000.00. They then contacted Mr. Joe Henry of Texas Distributors, Inc., who agreed to replace the compressor with equipment of like kind and quality for the sum of $10,640.00. This equipment was readily available.

Plaintiffs entered into a contract in writing with this company for the purchase of this equipment. This contract contained the following clause: “The existing compressor and motor will remain your property” (the property of the insureds). This language was inserted in the contract at the insistence of the plaintiffs. There is testimony to the effect that Texas Distributors removed the old compressor and motor from the premises of the plaintiffs without the owners’ knowledge or permission. The compressor was removed to a salvage place on North Houston Street in Fort Worth, Texas, where it was placed in storage and kept intact.

After Fred Massey, agent of the defendant, was notified of the accident on July 10, 1972, he had Larry Taylor, a service man employed by Texas Distributors, Inc., dismantle the compressor under Massey’s direction while Massey inspected the various parts of the engine and equipment. The description of the compressor can best be understood if it is compared to an automobile motor. It weighed about 2,000 pounds and contained the usual crankshaft, connecting rods, bearings, cylinders, and rings, together with an oil pump, filter, and the other parts of an ordinary motor.

When the motor was thus disassembled it revealed that both main bearings were cracked, the crankshaft was damaged, and the existence of other damage. The insurance company’s representative admitted that same was caused by accident.

The defendant requested no special issue concerning whether or not the company had had a reasonable time and opportunity to examine the property and the premises of the insured before repairs were undertaken or physical evidence of the accident is removed, except for protection or salvage.

It was not error for the trial court to overrule this objection for several reasons.

If the trial court had incorporated the language of the objection in the instruction given, such instruction would not have been a complete statement of the policy provision here involved. The language of the policy was not that of the objection because the words, “except for protection or salvage”, contained in the policy was omitted from the objection. Neither did defendant include this omitted portion of the policy in its motion for new trial. Having failed to point out to the trial court the correct policy language, either by way of the objection, or in its motion for new trial, or in any other manner, it was not error for the trial court to overrule the objection.

The instruction given is very broad in its application to the facts of this case. In determining whether the notice was given as soon as practicable the jury was instructed to take into consideration all the facts and circumstances. They had this policy before them and could read each of its provisions.

In addition thereto the claimed omitted part of the given instruction, the absence of which is the basis of the objection, was contrary to the evidence. Plaintiffs sued defendant under endorsement No. 1 of the policy for the replacement of the compressor. That part of the policy provides that the defendant will pay for the actual cost of repair or replacement. The insureds did not repair and did not sue for repairs except for temporary repairs incurred as expediting expenses under a separate part of the policy which part of their cause of action was submitted to the jury by special issues 6 and 7 to which no point of error has been assigned. The defendant plead and proved cost of repairs under its theory that plaintiffs were only entitled to the lower cost, that of repair instead of replacement.

It was established by uncontroverted evidence by testimony from defendant’s witnesses and disinterested witnesses that the machinery was not repaired, was replaced, was removed from the premises of the insureds by Texas Distributors, Inc., for salvage, to a salvage yard, was there stored intact, was inspected by the defendant, who was given not only an opportunity to inspect it but also the defendant was given all the time it desired to do the inspecting.

If there was any error, it was harmless.

This point is overruled.

The insurance company, by its points of error Nos. 2, 8 and 6, asserts the trial court erred in rendering judgment against it for any rental loss because the air conditioning system was fully repaired and operational before notice of accident was given by the insureds; and because the insureds failed to obtain factual findings regarding such loss for any specific day; and because of the court’s failure to instruct the jury that they should not consider any rental loss accruing before notice of accident was given and that they should consider no rental loss accruing after the air conditioning was back on.

The use and occupancy coverage is contained in endorsement No. 3 consisting of two pages.

Item 4 thereof entitled “Business” requires the issuing agent to insert in the blank space following this word one of these words, “Production, Sales, Rents, or Income”. The word “Rents” was inserted.

Under this endorsement the company agreed to pay a daily indemnity of $360.00 for loss of “rents collectible from the premises,” or a partial loss of rents collectible from the premises with a maximum liability of $3,600.00.

This endorsement contains the following provisions:

Under “Exclusions” it provides: “If, following an Accident, any lease, license or order is suspended, lapsed or canceled, the Company shall not be liable for payment for any Prevention of Business occurring after the time when Business could have been resumed if said lease, license or order had not lapsed or had not been suspended or canceled.”

Under “Commencement of Liability” the endorsement provides “for payment on account of an Accident shall commence at a time fixed by the arrival of the notice of Accident as provided in Condition B. If the Commencement of Liability is stated as determined with respect to ‘Time of Accident’, the Company shall not be liable for payment for Prevention of Business during any period before the twenty-fourth hour prior to such arrival of the notice.”

Under “Definitions”, “sales” is defined as the gross sales, “rents” means the rents collectible, and “income” means gross income.

The policy further provides: “ ‘Current Business’ shall mean one-third of the total Business on the Premises during the three Days next preceding the Day of the Accident, or during any other three Days selected by the Insured in any calendar week in the eight calendar weeks, in each of which there has been any Business on the Premises, next preceding the Day of the Accident.” (Emphasis ours.)

“ ‘Reduction in Business’ shall mean the amount determined by subtracting the amount of the total Business on the Premises for each Day following an Accident from the amount of Current Business.

“ ‘Partial Prevention of Business’ shall mean a decrease in Business on the Premises during part or all of a Day, sufficient to make the total Business for said Day less than Current Business. The liability of the Company for Partial Prevention of Business for said Day shall be determined by dividing the amount of Reduction in Business, caused by the Accident, for said Day by the amount of Current Business and then multiplying the result so obtained by the Daily Indemnity for said Day.

“Reduction of Payment

“E. As soon as possible after an Accident the Insured shall resume Business, in whole or in part, and shall utilize every available means, including surplus machinery, duplicate parts, equipment, supplies and surplus or reserve stock, which may be owned, controlled or used by the Insured, which might reduce the amount for which the Company would otherwise be liable under this Endorsement.”

The printed sections of this endorsement and the policy in its entirety reveals it was designed to provide insurance coverage for all kinds of businesses which had daily sales or daily production, such as motels, hotels, retail establishments, and factories.

It is obvious that the insurance company intended to insure the plaintiffs for loss of rental income of its apartments as a result of this occurrence.

Plaintiffs introduced evidence from their business records showing its “ ‘Current Business’ . . . during any other three Days selected by the Insured in any calendar week in the eight calendar weeks, in each of which there has been any Business on the Premises, next preceding the Day of the Accident.” They then offered evidence showing the loss of income as a result of the occurrence. Detailed testimony was adduced from the records showing the loss of income for each apartment from the date of the occurrence and for several months thereafter.

Based upon the evidence and this insurance coverage the court submitted the following issues to which issues the jury made the findings indicated therein:

“Special Issue No. 8:
“What do you find from a preponderance of the evidence to have been the average daily rental income received by the plaintiffs for the three days of April 29, April 30 and May 1, 1972?
“Answer in dollars and cents, if any.
“Answer: $700.00
“Special Issue No. 8-A:
“What do you find from a preponderance of the evidence to have been the daily loss of rental income resulting from the accident, if any, of June 24, 1972, during the months of July and August, 1972?
“In answering this special issue you are instructed that the ‘daily loss of rental income’ is the difference, if any, directly caused by the accident of June 24, 1972, between the average daily rental income found in answer to Special Issue No. 8 and the daily rental income reasonably collectible after the accident.
“Answer in dollars and cents, if any.
“Answer: $233.33”.

Under the facts in this case the trial court correctly submitted these issues in a very practical manner. It was not necessary for the court to submit separately 62 issues inquiring of the jury the rental loss naming each calendar day for July and August, 1972.

If it should be argued that the calculation should begin on the date the notice was admittedly given on July 10, then the business records of the plaintiffs reflected that their loss of rental income from July 10, 1972, through August 31, 1972, far exceeded the sum of $3,600.00, the maximum amount provided by the policy, and no harm resulted to the insurance company. This is discussed later in this opinion.

It follows from what has been said that the insurance company’s objections to the court’s charge were properly overruled.

An exclusionary clause provides that if any lease, licenses or order is suspended, lapsed, or cancelled, the company shall not be liable for the payment of any prevention of .any business occurring after the time when business could have been resumed if said lease, licenses, or order had not lapsed or had not been suspended or cancelled.

As heretofore stated this policy applied to all types of businesses. If the plaintiffs’ license to do business had been cancelled, or if they had been lessees of the premises rather than the owners and the lessor had cancelled their lease because of such an accident, then any resulting loss is not recoverable. It is apparent that this clause was designed to apply to situations where the city, county, state, or federal government might cancel a permit for the insured to do business because of the conditions resulting from the occurrence. For example, in the City of Fort Worth, if the apartments were not maintained in accordance with the minimum housing standards required by a city ordinance and insureds were not permitted to rent the apartments until they were brought up to city standards, then such resulting rental loss would not be recoverable.

It is our opinion that this clause does not apply to the situation where the plaintiffs’ lease with their tenants provided for the furnishing of air conditioning and when the insureds were not able to furnish the air conditioning the tenants then move out with immunity from the plaintiffs successfully bringing suits to recover their rents. The rents would not then have been “collectible from the premises.” The loss would have been the same if the plaintiffs had had no lease with their tenants and the tenants had simply moved out because the heat was insufferable.

When this clause is analyzed it is apparent that if a lease or some license is required to be maintained by the insureds in order for them to do business, or some order of a governmental authority prevented the insureds from doing business when they could have otherwise done business, then the insurance company would not be liable for any prevention of business occurring after the time when business could have been resumed except for such requirement.

It is well settled that insurance policy contracts are to be interpreted in such a manner that a reasonable meaning will be applied so as to give effect to the intent of the insuring agreement. John Hancock Mutual Life Insurance Company v. Tuggle, 303 F.2d 113 (10 Cir. 1962); Fruhman v. NAWCAS Benevolent Auxiliary, 436 S.W.2d 912 (Tex.Civ.App., Dallas, 1969, ref., n. r. e.); Couch on Insurance 2d, Vol. 1, Section 15:29; 32 Tex.Jur.2d 108, Insurance, Section 55.

It is also well settled that an insurance policy contract is to be interpreted, in cases of ambiguity, in favor of the insured and strictly against an insurance company in an effort to provide rather than defeat coverage, and when the policy is capable of two constructions, one of which will allow recovery and the other which would deny recovery, that construction will be given permitting the recovery. Millers Mutual Fire Insurance Co. v. Murrell, 362 S.W.2d 868 (Tex.Civ.App., Fort Worth, 1962, ref., n. r. e. at Tex., 367 S.W.2d 667); Drinkard v. Group Hospital Service, Inc., 366 S.W.2d 637 (Tex.Civ.App., Dallas, 1963, ref., n. r. e.); American Bankers Insurance Co. v. McDonald, 369 S.W.2d 688 (Tex.Civ.App., Austin, 1963, error dism.); Dillingham v. American Security Life Insurance Co., 384 S.W.2d 920 (Tex.Civ.App., Houston, 1964, no writ hist.).

The most recent case involving these rules is Ramsay v. Maryland Am. General Ins. Co., 533 S.W.2d 344 (Tex.Sup., 1976) where the Supreme Court held that it is a settled rule that policies of insurance “will be interpreted and construed liberally in favor of the insured and strictly against the insurer, and especially so when dealing with exceptions and words of limitation. . When the language of a policy is susceptible of more than one reasonable construction, the courts will apply the construction which favors the insured and permits recovery.”

In the Ramsay case, the insured was killed while occupying a Navy-owned vehicle being used by the deceased for governmental and military purposes. In a suit for death benefits, the defendant insurance company contended that the insurance provided no coverage because the death was sustained in a commercial automobile which was excluded under the terms of the policy. The sole question presented was whether a Navy-owned vehicle was a “commercial automobile” within the meaning of the exclusion of the automobile policy, and both parties agreed that the term “commercial automobile” was not an ambiguous term. That court held that: “. . uncertainty and ambiguity arise when the term is applied to a Navy-owned truck used exclusively for non-profit activities of the United States Government.” That court held there was coverage.

It is our opinion that ambiguity resulted when the facts in this case are applied to the exclusionary language used in the policy here before us. It is our further opinion that coverage is not excluded because of the exclusionary language above quoted.

The insurance company did not plead that this loss was excluded because of the above exclusionary clause in the contract. No issue was requested in connection with this defense.

Such exclusionary language not having been plead, any defense based thereon is considered waived by the insurance company. Rule 94, T.R.C.P.; Texas Reserve L. Ins. Co. v. Texas Rehabilitation Ctr., 332 S.W.2d 403 (Tex.Civ.App., San Antonio, 1960, no writ hist.); Cox v. Bankers’ Guaranty Life Co., 45 S.W.2d 390 (Tex.Civ.App., Austin, 1931, no writ hist.).

In 32 Tex.Jur.2d (1962 ed.), Sec. 514, page 751, “Particular allegations — Defenses and conditions subsequent”, it is stated:

“Facts that defeat recovery on the policy must be pleaded by the insurer. So, too, must be facts that will reduce the amount demanded by the insured. . . . it is the duty of the insurer to plead matters pertaining to conditions subsequent, exceptions, and prohibitory acts on which it wishes to rely.”

As was stated by the court in Commonwealth Casualty & Insurance Co. v. Bales, 151 S.W.2d 844 (Tex.Civ.App., Texarkana, 1941, no writ hist.), “. . . there is good authority holding that: ‘The burden rests upon the insurer to plead and prove such facts as would reduce the amount of the recovery below the maximum.’ Cox v. Bankers’ Guaranty Life Co., Tex.Civ.App., 45 S.W.2d 390, 392, . ."

See also Fort Worth Mut. Benev. Ass’n v. Haney, 17 S.W.2d 104 (Tex.Civ.App., Austin, 1929, writ dism.), holding in a suit on a life insurance certificate where the defendant insurance company contended that the insured was entitled to less than face amount of the policy the court said: “It is now well settled in this state that . where the certificate of insurance provides a maximum amount, with a limitation . it is incumbent upon the association to plead and to prove facts which would reduce the amount of the recovery below the maximum.”

Here the appellant insurance company’s contention on appeal with regard to the cancellation of leases, is the same as was found in the case of Southern Life and Health Insurance Co. v. Simon, 411 S.W.2d 765 (Tex.Civ.App., Beaumont, 1967, reversed on other grounds, 416 S.W.2d 793). There, in a suit on a limited accident industrial policy, the insurance company did not plead as a defense, an exclusion in the policy, concerning injuries with no visible contusions and wounds, and the court said that: “Such exclusion is a risk or cause coming within a particular exception to the general liability. Under Rule 94, Texas Rules of Civil Procedure, this defense was waived.”

It is our opinion this defense was waived.

These points of error are overruled.

The insurance company, by its points of error Nos. 4 and 7, contends the trial court erred in rendering judgment for the loss occasioned by the accidental breakdown of the compressor because there was no evidence to support the jury’s finding, the jury’s finding was manifestly too large, and factually insufficient.

Mr. Head, an air conditioning contractor for 15 years who qualified as an expert, holds a Class A contractor’s license, and is assistant manager of Air Service Company, testified that he had serviced the air conditioner in question prior to the occasion here involved. He was called immediately after the breakdown of June 24, 1972, he obtained a front seal and placed it in the air conditioner, it operated for about 5 hours, he went back to the apartment house and found the machinery had completely “locked up” and was virtually destroyed, the crankshaft was not running true and was vibrating and “wobbling”, and there was major damage to the compressor. He testified that prior to the breakdown of June 24th the air conditioning equipment and compressor were in good condition and would have lasted for another 15 years except for this accidental breakdown. He called all the major suppliers of parts in Texas, the east coast, and in Wilkes-Barre, Pennsylvania, at the home office of the company that had bought out the manufacturer of this equipment, and all available manufacturer’s representatives in an attempt to find parts that could be used in repairing the equipment. He was of the opinion that the equipment could be repaired for between $6,000.00 and $7,000.00 but it would require a minimum of 8 to 10 working days under the very best of conditions. He would have to work his men overtime and on weekends and pay them time and half for such night and weekend work.

Mr. Head also testified, in almost the exact words of the policy, that said breakdown necessitated repair or replacement; was not caused by depletion, deterioration, corrosion, or erosion of metal; was not caused by wear and tear; was not caused by leakage of any valve, fitting, shaft seal, ground packing, joint or connections; and the breakdown was caused by an accidental parts failure.

It is our opinion and we so hold that there was evidence to support the jury’s finding of the reasonable cost of repair as being $6,500.00 and that such finding of the jury was in a sum that was not manifestly too large, was supported by the evidence, and was not against the preponderance of the evidence.

Defendant’s points of error Nos. 4 and 7 are overruled.

The defendant, by its point of error No. 8, asserts the court erred in assessing interest on the property loss and expediting expenses from July 10,1972, and on the rental loss from September 1, 1972, because these sums were not due on those respective dates.

The trial court’s judgment assessed prejudgment interest from July 10, 1972 (the date notice was admittedly received by the insurer), at the rate of 6% per annum on the $6,500.00, found to be the cost of repair, and on the $777.80 for temporary repair and expediting expenses. It likewise assessed pre-judgment interest at the same rate on the $3,600.00 lost rent item from September 1,1972. The trial court then computed and liquidated that pre-judgment interest to specific sums and concluded, “The above and foregoing judgments shall bear interest at the rate of 6% per annum from date of this judgment until paid.”

The general rule is that prejudgment interest may be allowed as damages upon unliquidated demands, whether they arise out of breach of contract or out of tort, when the principal damages are determinable and established at a definite time, either by rules of evidence or known standards of value. There are exceptions to this rule which are not applicable to the case before us. This rule is also modified by the general proposition that interest begins to accrue upon a loss payable under an insurance policy when the principal of the sum becomes due under the terms of the policy.

In Watkins v. Junker, 90 Tex. 584, 40 S.W. 11 (1897) that court stated that it may not be technically correct to call this compensation “interest”, because same is actually damages for the detention of money. The court stated: “Interest, as damages, may be allowed upon unliquidated demands, whether they arise out of a breach of contract or out of a tort. (Citing cases.) Interest, however, cannot be allowed upon damages arising from assault and battery, libel and slander, seduction, false imprisonment, nor for personal injuries and the like. (Citing cases.)” That court further stated that interest may be recovered for the detention of money, with some exceptions not here pertinent, from the date the damage, loss, or injury was sustained. This rule has been followed in Texas Company v. State, 154 Tex. 494, 281 S.W.2d 83 (1955); Hayek v. Western Steel Company, 478 S.W.2d 786 (Tex.Sup., 1972); McDaniel v. Tucker, 520 S.W.2d 543 (Tex.Civ.App., Corpus Christi, 1975, no writ hist.); Davidson v. Clearman, 391 S.W.2d 48 (Tex.Sup., 1965).

The most recent case concerning this rule, McDaniel v. Tucker, supra, held that: “The rule in Texas is that pre-judgment interest may be allowed as damages upon unliqui-dated demands, whether they arise out of breach of contract or out of a tort, when the principal damages are determinable and established at a definite time, either by rules of evidence or known standards of value.” That court further stated that the Supreme Court in Texas Company v. State, supra, and Hayek v. Western Steel Company, supra: . . reaffirmed the rule announced in Watkins v. Junker, supra, and allowed pre-judgment interest on the sum due as damages for the detention of money from the due date of a liability.”

When the effect of Art. 5546, V.A.T.S., is applied to the policy provision concerning the loss of rentals the policy then provides that the company will not be liable for payment for the prevention of business during any period before the 24-hour period prior to the giving of notice to the company as soon as practicable. This notice was given on July 10, 1972.

The jury found that the daily loss of rental income due to this accident was $233.33 per day for the months of July and August, 1972. Since the defendant did not receive notice until July 10, 1972, no rental income could be allowed prior to that date. From July 10, 1972, through August, 1972, plaintiffs lost $233.33 per day rental income for a total of 52 days, making a total loss of $12,133.16. The maximum coverage was $3,600.00. The judgment provided that interest would start accruing on the $3,600.00, the maximum coverage, beginning September 1, 1972. This was clearly not error because the defendant owned interest from July 10, 1972, and for each day of lost rental as the loss occurred on each succeeding day thereafter until a total loss of $3,600.00 had been sustained. This maximum was reached before September 1, 1972.

This portion of this multifarious point of error is overruled.

The judgment also provides for 6% interest from July 10, 1972, on the sum of $6,500.00, representing the cost of repair of the machinery which was insured under Section I of the policy. It also allowed interest on $777.80 from July 10,1972. This amount was for temporary repair and expediting expenses covered under Section II of the policy. Each of these items of expense was incurred prior to the giving of the notice on July 10, 1972. These two items will be referred to as “these items” to distinguish them from the lost rent item discussed above.

The rule announced in Watkins v. Junker, supra, would here be followed except for the effect of the policy provisions hereinafter mentioned.

As a general proposition interest upon a loss payable under an insurance policy is not recoverable before, but is recoverable from the time when, the payment of the principal is due under the terms of the policy. 15 Couch on Insurance 2d, p. 432, Sec. 54:193 (1966 Rev.), (citing numerous Texas cases); and 154 A.L.R. 1368. See also Connecticut Fire Ins. Co. v. Fields, 236 S.W. 790 (Tex.Civ.App., Amarillo, 1922, no writ hist.).

The insurance contract before us fixes no time for payment of the proceeds of the policy for these two items. We then look to the policy to determine if any language is used therein which affects the time for payment of these two items.

The insuring agreement, together with Section I, provides that, subject to the conditions, the defendant agrees to pay for the loss on the machinery; and Section II provides, subject to the conditions, the defendant agrees to pay for the temporary repairs and expediting expenses.

The general conditions, as distinguished from the conditions contained in Endorsement No. 3, provide in part in Section 9 that the insured shall make proof of loss.

Therefore, until proof of loss is made, waived, or excused, no sum is then due or payable.

The giving of the proof of loss as plead by plaintiffs was not denied by pleadings under oath as required by Rule 93(m), T.R. C.P. The giving of the proof of loss is therefore admitted.

The record and pleadings are silent concerning the date proof of loss was made. It follows that the making of the proof of loss cannot establish the date these two sums here involved became due and payable.

Interest as damages sustained before judgment, under the facts in this case, began to accrue on the date the defendant first denied liability. This occurred on August 7,1973, when defendant filed its original answer denying liability.

The following cases are authority for this legal conclusion: Fort Worth Lloyds v. Hale, 405 S.W.2d 639 (Tex.Civ.App., Amarillo, 1966, writ ref., n. r. e.); Aetna Casualty and Surety Company v. Clark, 427 S.W.2d 649 (Tex.Civ.App., Dallas, 1968, no writ hist.); Southern Underwriters v. Jones, 13 S.W.2d 435 (Tex.Civ.App., Waco, 1929, error ref.); People’s Nat. Fire Ins. Co. v. Texarkana Nat. Bank, 60 S.W.2d 254 (Tex.Civ.App., Eastland, 1933, no writ hist.); Crutchfield v. St. Paul Fire & Marine Insurance Co., 306 S.W.2d 948 (Tex.Civ.App., Fort Worth, 1957, no writ hist.).

It is our opinion and we hold under the facts in this case that interest on these two items at the rate of 6% per annum began to run from the date the insurance company first denied liability by filing its answer denying liability.

This part of defendant’s point of error No. 8 dealing with interest on the cost of repairing the property loss and the cost of temporary repair and expediting expense is sustained.

By its point of error No. 9 defendant contends the trial court erred in allowing post-judgment interest on pre-judgment interest.

This point is overruled.

In Davidson v. Clearman, 391 S.W.2d 48 (Tex.Sup., 1965) the Supreme Court had before it a case in which plaintiff recovered judgment for the reasonable value of work performed and materials furnished by the plaintiff. The sum of $23,150.00 became due on February 15, 1962, when defendant moved into the house being constructed.

Although the Supreme Court did not specifically discuss the law here involved, it reformed the judgment and rendered judgment that plaintiff recover $23,150.00 plus interest thereon at the rate of 6% from February 15, 1962, until August 22, 1963 (the date of the judgment), in the sum of $2,110.52 for a total sum of $25,260.52. The Supreme Court then rendered judgment on the total sum including pre-judgment interest and concluded this judgment as follows: “This last amount shall draw interest at the rate of 6% from and after August 22, 1963, until paid.”

In Lanpar Company v. Stanfield, 451 S.W.2d 254 (Tex.Civ.App., Dallas, 1970, no writ hist.) that court stated: “Even though a judgment for a certain number of dollars may include principal debt, interest, attorney’s fees, and in some cases statutory penalties, the whole will nevertheless bear interest at the rate of six per cent per annum on the full amount from and after the date of judgment (except in a certain situation not present here). Article 5069-1.05, V.A.C.S.; Ligon v. E. F. Hutton & Co., 428 S.W.2d 434 (Tex.Civ.App., Dallas 1968, writ ref’d n. r. e.); Manes v. J. I. Case Threshing Mach. Co., 295 S.W. 281, 283 (Tex.Civ.App., Eastland 1927, writ ref’d); Carver v. J. S. Mayfield Lumber Co., 29 Tex.Civ.App. 434, 68 S.W. 711 (San Antonio 1902, writ ref’d); American Nat. Ins. Co. v. Ellington, 97 S.W.2d 983 (Tex.Civ.App., Dallas 1936, no writ).” (Emphasis ours.)

In 33 Tex.Jur.2d, p. 77, “Interest”, Sec. 10, “ — Amount on which computed”, (1962 Rev.), the rule is stated: “A judgment for principal and interest may bear interest. Any claim that interest ought not to be allowed on that part of the judgment that is for interest is not sustainable. The interest due at the rendition of the judgment becomes incorporated into and is a part thereof, and there is no exception in the statute prohibiting interest on the whole.”

In Home Indemnity Company v. Mosqueda, 473 S.W.2d 456 (Tex.Sup., 1971), in a suit to mature an award in a workmen’s compensation case, that court stated: “The trial court should have rendered judgment in Camilio’s favor: (1) for $12,600.00 plus interest thereon from the date suit was filed to the date of judgment at the rate of four percent per annum, compounded annually; (2) for the $7,922.00 penalty and attorney’s fees; and (3) with the provision that the entire judgment would bear interest from its date until paid at the rate of six percent per annum.” (Emphasis ours.) See also American Savings & Loan Ass’n of Houston v. Jones, 482 S.W.2d 62 (Tex.Civ.App., Houston, 14th Dist., 1972, ref., n. r. e.).

It is our opinion and we hold it was not error for the trial court to allow interest for the loss of rental income from September 1, 1972, and the trial court should have allowed interest on the other two items from August 7, 1972, and then the judgment should have provided for interest at the rate of 6% per annum on the total of these sums until paid.

Plaintiff, by cross-point of error, asserts the trial court erred in rendering judgment in the amount of $6,500.00 instead of the amount of $8,500.00 as plaintiffs’ damages in connection with their property damages because the jury found, upon competent evidence, that it was impractical to repair the unit. Therefore, the judgment should have been for the reasonable cost of replacement (which was done), rather than the reasonable cost of repair (which was not done).

The insurance contract as reflected by Endorsement No. 1 provides in part that the company will be liable for any repair or replacement but shall be limited to the lesser amount of the two.

Endorsement No. 3 concerning the loss of rentals provides in Section E that the insureds will do everything possible to minimize the loss or rentals.

The jury in response to Issue No. 3 found that it was impracticable, under the circumstances, for the plaintiffs to repair the damaged compressor.

Plaintiffs replaced the compressor for a cost of $10,640.00. The jury found in response to Issue No. 13 that such sum was a reasonable value of furnishing these goods and services at the time involved. The new compressor replaced a used compressor. The jury in answer to Issue No. 5 found that the reasonable cost at the time involved to replace the compressor with equipment of like kind, capacity, size and quality was $8,500.00. The jury apparently made this reduction to compensate for the fact that the replacement was made with new rather than used equipment.

Plaintiffs contend that under all the facts and circumstances here involved and giving effect to the reduction in payment clause which required them to do everything possible to minimize the loss of rents and because it was impracticable to repair the old unit it was error for the trial court to refuse to render judgment for them in the sum of $8,500.00 instead of the cost of repairs in the sum of $6,500.00.

The reduction of payment clause in Endorsement No. 3 does not contain any provision that would alter the language of Endorsement No. 1 so as to include the right of plaintiffs to replace the machinery if it were impractical to have it repaired. The plaintiffs are bound by the terms of limitation contained in Endorsement No. 1.

The court did not err in rendering judgment for the cost of repair, rather than the cost of replacement.

This cross-point is overruled.

■ That portion of the judgment providing for interest on the sums of $6,500.00 and $777.80 from July 10,1972, to date of judgment, is modified and judgment as modified is here rendered that Harold W. Coffman and Ollie M. Coffman do have and recover judgment against New York Underwriters Insurance Company in the amount of $7,277.80 (the total of these sums), together with interest thereon at the rate of 6% per annum from August 7, 1973 (the date defendant denied liability), to June 5, 1975 (the date of the judgment). The total of these sums including interest to the date of judgment shall bear interest at the rate of 6% per annum from June 5, 1975, until paid. The part of the judgment taxing trial court costs is affirmed.

All costs of appeal are assessed against New York Underwriters Insurance Company-

We have carefully examined this entire record, each point of error and cross-point of error asserted, and fail to find reversible error reflected therein. We modify the trial court’s judgment only to the extent indicated above, and as modified, affirm the same.

      . Article 5069-1.05, V.A.T.S., has been amended effective September 1, 1975. Since that date judgments, with the exception stated therein, bear interest at the rate of 9% per annum until paid.


source: Caselaw Access Project

author: PRESLAR, Chief Justice.

license: Public Domain

text:
    TEXAS EMPLOYERS’ INSURANCE ASSOCIATION, Appellant, v. Leveta BYRD et al., Appellees.
    No. 6512.
    Court of Civil Appeals of Texas, El Paso.
    July 21, 1976.
    Rehearing Denied Aug. 18, 1976.
    Shafer, Gilliland, Davis, Bunton & McCol-lum, Inc., Lucius D. Bunton, Odessa, for appellant.
    Childs & Bishop Law Offices, Inc., Jerry P. Childs, Odessa, A. R. Archer, Jr., Mona-hans, Scarborough, Black, Tarpley & Scarborough, Frank Scarborough, Abilene, Lawrence L. Fuller, Monahans, Merkin & Gibson, William L. Merkin, Sidney K. Gibson, El Paso, Armendariz & Armendariz, Albert Armendariz, Sr., El Paso, Lawrence L. Barber, Jr., Monahans, Gibson, Ochsner, Adkins, Harlan & Hankins, S. Tom Morris, Amarillo, for appellees.
   OPINION

PRESLAR, Chief Justice.

This is a workmen’s compensation case arising out of a motor vehicle collision which occurred when a drilling crew was going from a rig location in New Mexico to their homes in Monahans, Texas. Based on a jury verdict as to certain issues and a finding by the trial Court that as a matter of law the claimants were in the course and scope of their employment, judgment was entered for the claimants. We affirm.

The sole question on appeal is whether the injuries were sustained in the course of employment within the meaning of Sections 1 and lb of Article 8309, Tex.Rev.Civ.Stat. Ann.

The employees of Marcum Drilling Company were riding in a double-cab pickup driven and owned by their driller, George Lee Wilson. The driller was killed, but his case is not one of those before us. Billy R. Sanderson was killed, and Benito Calderon, Francisco S. Gonzales, and Jose R. Santiago were injured. The cases of these four crewmen were consolidated into this single cause for trial and for appeal. The accident happened on a public highway after the men had completed their tour of duty at the drilling rig and were on their way home. It was stipulated that, immediately prior to the accident, the crew members were on their way home to Monahans and were passengers in the pickup owned and driven by Wilson. The drilling location was approximately 100 miles from Monahans; there was no public transportation to it; it was located in a remote area where there were no living accommodations, so that it was necessary for the drilling crew to get from Monahans to the well site and back each day.

The occasion for the crew riding with the driller was under a plan whereby Marcum Drilling Company paid the driller 12<p a mile for the round trip from Monahans to the rig location. The driller hired the crew members, and at the time of employing them told them that this transportation would be available; that they could ride with him, but they were not required to. The driller picked the crew members up at their homes each day, and returned them home after the day’s work. As a matter of fact, the crew members did ride with the driller each day. At the time of their employment, the drillers are told that they will be paid mileage, that they are to furnish the crew, that they will be driving everyday to and from the well location, and are expected to have the crew there. The Appellant insists that, under this state of facts, the injuries did not occur while these employees were in the course and scope of their employment.

This Court has recently ruled on a similar, if not almost identical, set of facts in the case of Liberty Mutual Insurance Company v. Raymond E. Chesnut, our Cause No. 6481, decided July 7, 1976, not yet reported, but found in Vol. 1, Texas Court Reports, page 187, a new publication in its third week of weekly publication. There, as here, there was a plan for getting the crew to the well site in a remote area by the driller being paid 12$ a mile and his furnishing transportation to his crew. We held the crew to be in the course of their employment when their injuries occurred on a public highway from an automobile collision while being so transported by the driller to the well site. The controlling facts of that case are so identical to the ease before us as to be controlling of this case, if, as a matter of law, the crew was in the course of their employment as found by the trial judge.

In the Chesnut case, the jury found that the employees were in the course and scope of their employment, and the complaint on appeal was that there was no evidence to support such a finding. Under such assignment of error, our holding was that we could not say as a matter of law that the injuries did not occur in the course of employment. In the case before us, the jury was unable to agree on the issue, and the Court directed a verdict as to that issue, holding that as a matter of law the injuries occurred in the course of employment. In the Chesnut case, we were reviewing a jury finding on the course and scope of employment, and followed the familiar rule that in reviewing “no evidence” points, an appellate Court must consider only the evidence and inferences tending to support the finding. In this review, considerations of the evidence and inferences are to the contrary. Here, we are reviewing a finding by the Court that as a matter of law the men were in the course and scope of their employment.

On appeal from a judgment which grants an instructed verdict, the appellate Court is required to review the evidence most favorable to the Appellant, to indulge against the judgment every inference that may be properly drawn from the evidence, and to disregard all conflicting evidence. Stone v. Lawyers Title Insurance Corporation, 537 S.W.2d 55 (Tex.Civ.App.—Corpus Christi 1976, no writ), Seideneck v. Cal Bayreuther Associates, 451 S.W.2d 752 (Tex.1970). The test for determining whether or not the instructed verdict should be granted is whether or not reasonable men may differ as to the truth of controlling facts. Stone v. Lawyers Title Insurance Corporation, supra, and City of Fort Worth v. Lee, 143 Tex. 551, 186 S.W.2d 954 (1945). We underscore “controlling” because in the case before us we are of the opinion that the controlling facts are not in dispute so that the Court was correct in holding as a matter of law that they were in the course and scope of their employment. Here, as in the Chesnut case, crew members are brought within the specified conditions, or prerequisites, of Section lb of Article 8309, in that their transportation was a part of their contract of employment. Their transportation was furnished as a part of the contract of employment but, we hasten to add, that alone is not sufficient to sustain their claim, for we view the law to be that additionally it must be shown that their injuries were received while engaged in or about the furtherance of the employer’s affairs or business. Our holding is that the requirement of the employees being in the course and scope of their employment in the furtherance of the employer’s affairs is satisfied by the undisputed facts as to the plan of getting them to and from the job location in a remote area and the benefits which such plan conferred upon the employer. The necessity for such a plan in order for the operations of the drilling rig to be continuous, and the benefits of such a plan, as discussed in the Chesnut case, place them within the course of their employment. The controlling facts as to that plan of transportation and as to the benefits to the employer are undisputed. No contention has been made of disputed facts, and the evidence we have relied on comes from both the employer and employees. The trial Court was correct in holding as a matter of law that the injuries were sustained in the course of employment.

Certain of the Appellees insist that all that is necessary to sustain the ruling that the injuries occurred in the course of their employment is the fact that their transportation was furnished as a part of their contract of employment. We do not agree. We do not so hold. We must not lose sight of the fact that workmen’s compensation benefits are for injuries on the job — in the course of employment — whether or not at the job site, and they must be received while in the furtherance of the employer’s affairs or business. The furnishing of transportation as a part of the contract of employment standing alone is not sufficient. We do not construe Texas Employers’ Ins. Ass’n v. Inge as so holding. 146 Tex. 347, 208 S.W.2d 867 (1948). There the Court noted: “The location of the drilling site in an uninhabited area made it essential that Appleby furnish transportation to his employees * * And the Court said: “The employer’s affairs and business were being furthered by the transportation of the members of the crew to and from the well site * * *.” Any doubt about the matter has been laid to rest by the later cases of the Supreme Court in such cases as Texas General Indemnity Company v. Bottom, 365 S.W.2d 350 (Tex.1963); Jecker v. Western Alliance Insurance Company, 369 S.W.2d 776 (Tex.1963); Shelton v. Standard Insurance Company, 389 S.W.2d 290 (Tex.1965), and Agricultural Insurance Co. v. Dryden, 398 S.W.2d 745 (Tex.1965).

Being of the opinion that the trial Court was correct in holding as a matter of law that the injuries were sustained in the course of employment, the judgment of the trial Court is in all things affirmed.


author: CADENA, Justice.

text:
    Martha Lee WILLIAMS, Appellant, v. Georgia Dickens GALLER et al., Appellees.
    No. 15500.
    Court of Civil Appeals of Texas, San Antonio.
    July 21, 1976.
    Donald J. Walheim, Hardberger, Bran ton & Herrera, Inc., San Antonio, for appellant.
    Beckmann, Stanard & Olson, Clark, Thornton & Summers, San Antonio, for ap-pellees.
   CADENA, Justice.

Plaintiff, Martha Lee Williams, filed this suit seeking $125,000.00 as compensation for injuries she suffered when the automobile she was driving was struck in the rear by a vehicle operated by defendant, Georgia Dickens Galler, who, at the time of the accident, was performing her duties as an employee of the other defendant in the case, City of Castle Hills. She appeals from a judgment, based on a jury verdict, allowing her (1) $3,000.00 for past suffering and past loss of earnings and (2) $1,500.00 for past medical expenses. The verdict and judgment allowed no recovery for future suffering, future loss of earnings, or future medical expenses.

Plaintiff first asserts that the award of $4,500.00 is inadequate as a matter of law or, in the alternative, that it is so against the overwhelming weight and preponderance of the evidence as to be manifestly unjust.

No extended discussion of the testimony is required in order to dispose of this complaint. It is true that the testimony of plaintiff and of Dr. Bilderback, plaintiff’s expert witness, if believed, would justify a significantly higher award. But this testimony conflicts squarely with that given by Dr. Newby, defendants’ medical witness, to the effect that his examination of plaintiff some four months after the accident revealed no abnormality. He testified that he detected no muscle spasms in plaintiff’s back and detected no “withdrawal response,” which is normally expected when “a true tenderness” is present.

The evidence concerning the speed of the vehicle which struck plaintiff’s car is conflicting. In her deposition, the defendant driver stated that her speed at the time of impact was about 35 miles per hour, but at the trial she testified that her vehicle was progressing at the rate of only 15 miles per hour. The damage to plaintiff’s car amounted to about $100.00, and the other vehicle sustained little or no damage.

The record shows that plaintiff underwent extensive treatment, and defendants stipulated that the reasonable cost of such treatment was $9,234.65, but denied that such treatment was necessitated by whatever injury plaintiff sustained in the accident. Plaintiff’s doctor testified that it would be necessary for plaintiff to be “monitored” for about two additional years. He testified that all treatments received by plaintiff were reasonably necessary to alleviate the results of her injury.

It is clear that the jury, which observed the experts who testified, chose to believe the testimony of defendants’ expert rather than the testimony of plaintiff’s doctor. The evidence adequately supports the conclusion that plaintiff, four months after the accident, had fully recovered from any injury and disability caused by the collision, and that the extensive treatment administered by Dr. Bilderback after such complete recovery was not necessary to alleviate the injuries caused by the accident. Plaintiff’s evidentiary points are without merit. Ruffo v. Wright, 425 S.W.2d 663 (Tex.Civ.App.—San Antonio 1968, no writ). We cannot say, in view of the evidence, that the award in this case establishes that the verdict “was the result of passion or prejudice or other improper motive or was in disregard of the evidence.” Dallas Ry. & Terminal Co. v. Farnsworth, 148 Tex. 584, 227 S.W.2d 1017, 1022 (1950).

Plaintiff’s next complaint concerns the remarks of counsel for defendant, Georgia Dickens Galler, during her argument to the jury. The challenged portion of the argument is as follows: “[M]y client, is in here as the defendant in this particular lawsuit. She’s being sued for $125,000 just like the City of Castle Hills. The City of Castle Hills says, well, if you’re found negligent in this and we’re found negligent then we have got to ask you to reimburse us.” Plaintiff’s objection to this portion of the argument was sustained. Plaintiff made no motion for mistrial, nor was the court requested to instruct the jury to disregard the remarks. Although the argument was improper, its harmful effect could be eliminated by proper instruction to the jury. We do not consider the argument to be of such a prejudicial nature as to warrant a reversal. Texas Employers’ Insurance Association v. Haywood, 153 Tex. 242, 266 S.W.2d 856 (1954); Chancey v. Van Luit, 306 S.W.2d 377 (Tex.Civ.App.—Amarillo 1957, writ ref’d n. r. e.).

The judgment of the trial court is affirmed.


author: KLINGEMAN, Justice.

text:
    Vernell BODE et al., Appellants, v. Milton LOEFFLER, Independent Executor of the Estate of Norma Raeke, Deceased, Appellee.
    No. 15534.
    Court of Civil Appeals of Texas, San Antonio.
    July 21, 1976.
    Rehearing Denied Sept. 8, 1976.
    Senterfitt & Adams, Richard T. Miller, San Saba, for appellants.
    John E. Banks, Banks & Banks, Joe Frazier Brown, San Antonio, John L. Hill, Atty. Gen. of Texas, Herman I. Little, Jr., Asst. Atty. Gen., Austin, for appellee.
   KLINGEMAN, Justice.

This suit involves the construction of the joint and mutual will of Otto and Norma Raeke. The suit was brought by the executor of the estate of Norma Raeke, who sought a declaration by the trial court as to the manner in which he should distribute the property held by him as executor. The heirs of Norma Raeke, the heirs of Otto Raeke, the deceased husband of Norma Raeke, and the Board of Pensions of the Southwest Texas Conference of the Methodist Church (hereinafter called Board of Pensions) were named as defendants. All of the heirs of Otto Raeke either disclaimed or failed to answer. The Board of Pensions contended that under the joint and mutual will of Norma Raeke and Otto Raeke, all of the property of Norma Raeke, except the household furnishings and personal effects, passed to it as trustee. The heirs of Norma Raeke contended that such property could not pass under the terms of the will and should pass according to the laws of intestate succession.

Trial was to the court without a jury. The court found that it was the intent of the testators to leave their residuary estate in trust for retired ministers within the Southwest Texas Conference of the Methodist Church and the Board of Pensions should administer the trust. Judgment was rendered awarding all of the property owned by Norma Raeke at her death, except the household furnishings and personal effects, to the Board of Pensions as trustee of a perpetual trust for the benefit of the specified retired ministers. This is an appeal by the heirs of Norma Raeke.

The pertinent portion of the joint and mutual will of Otto and Norma Raeke, here involved, read as follows:

SECOND. Subject to the provisions of the foregoing paragraph hereof, it is our will and desire that the survivor of us, Otto C. Raeke or Norma Raeke, as the case may be, shall, with the rights and authority below given, have all of the estate of every description, real, personal or mixed, and wheresoever situated, which either or both of us may own, to be used, occupied, enjoyed, conveyed or expended by, and during the life of such survivor, as such survivor shall desire. THIRD. In the event that we should die as the result of a common disaster, or upon the death of the survivor of us, subject to the provisions of the first paragraph hereof, we do hereby give, devise and bequeath the sum of Two Thousand and no/100 Dollars to Alfred Raeke, the brother of Otto C. Raeke, if he is living, and the residue of our estate to the Retired Ministers’ Fund of the Southwest Texas Conference of the Methodist Church. In the event that Alfred Raeke should not be living when he is entitled to take hereunder, the property herein bequeathed to him shall also pass to the Retired Ministers’ Fund of the Southwest Texas Conference of the Methodist Church. We do hereby direct that the corpus of the property herein devised and bequeathed to the Retired Ministers’ Fund of the Southwest Texas Conference of the Methodist Church shall not be spent but the same shall be invested and all income and revenue derived therefrom shall be used as deemed most advisable by the trustees of such fund.

Appellants assert that the trial court erred (1) in failing to hold that the trust sought to be created violates the rule against perpetuities; (2) in holding that the trust sought to be created was a charitable trust; (3) in applying the doctrine of Cy Pres to such will; (4) in holding that the Board of Pensions was the proper entity to receive the property sought to be bequeathed in trust; (5) in rendering judgment that the will in question vested title to the property of the estate of Norma Raeke, except household furnishings and personal effects, in the Board of Pensions as trustee for the benefit of retired ministers of the Southwest Texas Conference of the Methodist Church. All points of error will be discussed together.

Otto Raeke and wife, Norma Raeke, executed a joint, mutual, and contractual will on July 11,1950. Otto Raeke died on January 5,1962; the joint and mutual will here involved was duly admitted to probate; letters testamentary were issued to Norma Raeke; and, Norma Raeke accepted the benefits which were bestowed upon her by such will. During his lifetime, Otto Raeke had been a Methodist minister and had qualified for retirement benefits under church law. Otto Raeke collected a substantial sum of retirement benefits, as did Norma Raeke by virtue of her status as the widow of a retired minister. On December 9, 1972, Norma Raeke died and shortly thereafter Milton Loeffler offered the joint and mutual will of Norma and Otto Raeke for probate. Such will was duly admitted to probate and letters testamentary were issued to Milton Loeffler. The executor had difficulty in determining the legal effect of the third paragraph of the will, hereinbefore set forth, and filed suit seeking judicial guidance in distributing the property held by Norma Raeke at the time of her death. Alfred Raeke, the brother of Otto Raeke, preceded Norma in death. There is no dispute pertaining to that portion of the will devising household furnishings and personal effects.

It is undisputed that there is no entity named “Retired Ministers’ Fund of the Southwest Texas Conference of the Methodist Church.” There is evidence that the Board of Pensions is the entity within the Southwest Texas Conference of the Methodist Church that administers funds for retired ministers.

The Board of Pensions is a non-profit Texas corporation, the purposes of which are stated by the charter as follows:

1.To determine and report to the Annual Conference the names of retired ministers, and the widows and children of the deceased ministers of the Southwest Texas Annual Conference who are entitled to annuities, pensions, or special relief.

2. To set, subject to approval of the Annual Conference, the appropriation necessary to meet such charges.

3. To perform such other acts and discharge such other duties as may be prescribed by the Discipline of the Methodist Church or by action of said Southwest Texas Annual Conference of the Methodist Church.

The law-making body of the Methodist Church is known as the General Conference. The General Conference publishes a book of church law, the Discipline of the Methodist Church, which the General Conference has broad power to amend.

The Board of Pensions administers funds which are used to pay annuities and pensions to retired ministers, the widows of ministers during their widowhood, and dependent children of deceased ministers. At the time of this trial there were about 125 retired ministers and approximately an equal number of widows and dependent children who were qualified for such annuity and pension payments from the Board of Pensions. The size of this body fluctuates as its members die and others qualify, but at any particular time, the members of this body are each identifiable and ascertainable.

We hold that the trial court correctly held that (a) the joint and mutual will of Otto and Norma Raeke created a valid charitable trust; (b) the trust created did not violate the rule against perpetuities; (c) the intent of Otto and Norma Raeke was to leave their residuary estate to a retired ministers’ fund within the Southwest Texas Conference of the Methodist Church, and such testamentary gift took effect at the death of the survivor; (d) the doctrine of Cy Pres applied to the facts of this case; (e) all of the residuary estate passed to the Board of Pensions as trustee, which was the proper entity to receive such testamentary gift and administer the same through the Board of Directors of such Board for the benefit of the retired ministers of the Southwest Texas Conference of the Methodist Church.

We will first discuss appellants’ point of error that the trial court erred in holding that the trust involved is a charitable trust, since most of appellants’ other points of error stand or fall on the determination of this question. Appellants assert that there is no evidence to support such finding, the evidence is factually insufficient, and such finding is against the great weight and preponderance of the evidence. In support of such contention they urge that the will conclusively establishes that the trust it purported to create is not a charitable trust, and in the alternative, if it is a charitable trust, it is a private charitable trust. We disagree.

An oft quoted and landmark case on the question of charitable trusts is the Supreme Court decision in Boyd v. Frost National Bank, 145 Tex. 206, 196 S.W.2d 497 (1946). In Boyd, the Court held valid as a public charitable trust a will devising all personal property to a trust, the income from which was to be given to such charities as the trustee, in his absolute discretion, would select. Petitioner argued, among other things, that the trust was invalid because (a) the language creating such trust was too general, vague, and indefinite; (b) the bequest for charitable purposes would also include gifts for private purposes, would violate the rule against perpetuities, and, would be void. The Court held the trust to be valid and said:

‘A gift to a charitable institution or society will be presumed to be a charitable gift, though no purpose is named, and such institution or society will be presumed to hold such gifts in trust for those charitable purposes for which it exists.’

The Court quoted with approval from Professor Scott’s work on Trusts, Volume 3, Section 396, as follows:

‘A testator may devise or bequeath property in trust for charitable purposes without designating the particular purposes to which he wishes the property to be applied. He may leave the property to trustees for such charitable purposes as they may select. Such a disposition is valid according to the great weight of authority. If the trustee is ready and willing to make the selection, there is no reason why he should not be permitted to do so. This is true where the testator designates the general nature of the charitable purposes to which he desires the property to be applied. It is true also where the trustee is left free to devote the property to any charitable purpose he may select.’

The Court also set forth rules of construction pertaining to charitable trusts, stating:

Mrs. Pryor had been careful to state that she was creating a trust for ‘charitable purposes in perpetuity.’ We are asked to hold that she meant to include in these purposes a class of benevolence which would admittedly invalidate her will, and to resolve matters of construction against rather than in favor of the will’s legality. Such a holding would be clearly contrary to the applicable rules of construction, which are well stated in the following language from Powers v. First National Bank of Corsicana: ‘If it be conceded that ambiguity exists by reason of the structure of the sentence in question, we believe the same must be resolved in favor of legality. Charities like those specified by Mrs. Hofstetter are held in such high regard by the law that the rules of construction are more liberal to sustain them than they would be if the gifts were to individuals. [Citations omitted.] As said in Jackson v. Phillips, supra, 14 Allen, Mass., 539: “When a charitable intent appears on the face of the will, but the terms used are broad enough to allow of the fund being applied either in a lawful or an unlawful manner the gift will be supported, and its application restrained within the bounds of the law.” More concretely, if one construction of a will causes it to violate the rule against perpetuities while another makes it comply therewith, the latter construction will be preferred. Page, Law of Wills, vol. 2, sec. 925, p. 842. “Public charities are public blessings, and the commonwealth is interested in giving force and effect to them” [Citation omitted.] So the court’s attitude in considering a bequest intended for a charitable purpose should be friendly, not hostile. [Citation omitted.] It should “make every reasonable effort to hold that the trust is purely charitable, and not a mixed charitable and private trust which would be invalid.” 2 Bogert, Trusts and Trustees, § 369.’ Powers v. First National Bank of Corsicana, 138 Tex. 604, 617, 161 S.W.2d 273, 282.

In Eldridge v. Marshall National Bank, 527 S.W.2d 222 (Tex.Civ.App.—Houston [14th Dist.] 1975, writ ref’d n.r.e.), the trust under attack left certain funds and real estate to form a scholarship fund. Appellant’s main contention on appeal was that the trial court erred in holding that the will of Hope Pierce Tartt created a valid public charitable trust. The court upheld the trust and stated that since public charitable trusts are favored by courts of equity, they will be sustained if from the four comers of the will, a purpose can be gathered to establish a trust for a class sufficiently definite to be legally ascertained. Appellant also contended that the will involved was even more vague than the will involved in Allred v. Beggs, 125 Tex. 584, 84 S.W.2d 223 (1935), because Mrs. Tartt not only did not specify that the scholarship fund was to be exclusively for charitable purposes, but she also failed to ever use the word charity; in order to validate the scholarship fund provision, the court would have to prohibit the trustee from using the fund for non-charitable and non-public purposes; it would be necessary for the court to designate the portion of the public to benefit from the scholarship fund; and, this would amount to the Court’s making a will for the testatrix in violation of the laws of this State. The Court said:

We disagree. Unlike the will in Allred, which created a purely personal trust in the executor, the will in the case at bar limits the executors’ use of the estate to a scholarship fund, which is, by definition, a valid charitable use.

In Boyd v. Frost National Bank, supra, the Court considered at length the question of what constitutes charitable purpose and quoted with approval the classification found in II Restatement, Trusts, Section 368, p. 1140:

‘Charitable purposes include
(a) the relief of poverty;
(b) the advancement of education;
(c) the advancement of religion;
(d) the promotion of health;
(e) governmental or municipal purposes;
(f) other purposes the accomplishment of which is beneficial to the community.’

In Frost National Bank v. Boyd, 188 S.W.2d 199, 207 (Tex.Civ.App.—San Antonio 1945), aff’d, 145 Tex. 206, 196 S.W.2d 497 (1946), the Court of Civil Appeals stated:

A ‘charitable trust’ is a ‘public trust.’ The term ‘charitable purposes’ means the same thing as ‘public charitable purposes.’ A ‘charity’ is a ‘public charity.’ The distinction between a ‘private trust’ and a ‘charitable trust’ is that the rule against perpetuities applies to ‘private trust,’ but does not apply to ‘charitable trust.’ A ‘charitable trust’ must necessarily be public so that it may be said that the greater social good is realized by permitting it to stand, despite the fact that the trust property is diverted from the normal channels of trade and commerce.

See also Powers v. First National Bank of Corsicana, 137 S.W.2d 839 (Tex.Civ.App.—Waco 1940, writ ref’d n.r.e.).

We have concluded that the trust sought to be created is a valid public charitable trust. Appellants’ second and third points of error are overruled.

Appellants’ first point of error urges that the trust sought to be created is invalid because it violates the rule against perpe-tuities. Appellants concede that the rule against perpetuities is not applicable if the trust is exclusively for charitable purposes. We have heretofore held and discussed in considerable detail why we consider the herein trust to be a valid charitable trust, and have quoted from cases holding that a perpetual charitable trust is not in violation of the rule against perpetuities. Boyd v. Frost National Bank, supra; Powers v. First National Bank, supra. Under our holding, we deem it unnecessary to further discuss appellants’ first point of error, and it is overruled.

Appellants also complain that the trial court erred in applying the doctrine of Cy Pres. However, appellants’ complaint as to the court’s use of the Cy Pres doctrine is grounded upon their belief that the trust is not a charitable trust, and state that in Texas the doctrine of Cy Pres is applicable only to charitable trusts. See General Association of Davidian Seventh Day Adventist, Inc. v. General Association of Davidian Seventh Day Adventists, 410 S.W.2d 256 (Tex.Civ.App.—Waco 1966, writ ref’d n.r.e.); Note, Texas Enacts Cy Pres Statute, 49 Texas L.Rev. 181 (1970). We have heretofore held that the trust here created is a valid charitable trust. It is also our opinion that the doctrine of Cy Pres was properly applied to the facts of this case. Moreover, it is a general rule of equity that a trust will not fail for lack of a trustee, and if a trustee be named and refuses to act, or the instrument attempting to create a trust fails to name a trustee, the courts will appoint a trustee to carry out the manifest intent of the settlor. Wilson v. Franz, 359 S.W.2d 630 (Tex.Civ.App.—El Paso 1962, writ ref’d); Taysum v. El Paso National Bank, 256 S.W.2d 172 (Tex.Civ.App.—El Paso 1952, writ ref’d); II Restatement of the Law, Trusts, Sec. 397, p. 286.

All of appellants’ points of error have been considered and all are overruled. The judgment of the trial court is affirmed.

      . The trial court made extensive findings of fact, the gist of which is included in the above summary. In addition to the above summarized factual statement, the trial court also found (a) it was the intent of Otto and Norma Raeke to dispose of all their estate by such will and not to die intestate as to any part of their estate and it was the general intent of Otto and Norma by such will to leave the residuary estate to a fund for retired ministers within the Southwest Texas Conference of the Methodist Church; (b) the Board of Pensions of the Southwest Texas Conference of the Methodist Church is the entity that administers funds for retired ministers within the Conference, such Board of Pensions is the proper entity within said Conference to receive and administer a retired ministers’ fund for the benefit of such retired ministers, and that the use of such funds for the benefit of such retired ministers by said Board of Pensions is a charitable use; (c) the Board of Pensions is a charitable nonprofit corporation organized and existing under the laws of the State of Texas and in accordance with the church law of the Methodist Church; (d) such Board of Pensions is the property entity to be named by the court to receive the residuary estate passing under the will of Otto and Norma Raeke and the Board of Directors of such Board should be named by the court as trustees thereof; (e) the Board of Pensions should receive the said properties from the executor, and said trustees shall serve without bond and shall have all the powers granted trustees under the Texas Trust Act, but said Board shall not spend the corpus of the property of said estate but shall invest the same and shall apply all income and revenue derived from said investment for the benefit of the retired ministers of the Conference in such manner as is deemed most advisable by the trustees of said Board.
      The trial court also filed conclusions of law which may be summarized as follows: (a) the doctrine of Cy Pres is applicable and should be applied to the facts of this case; (b) the Board of Pensions should be named by the court to receive the residuary estate and the Board of Directors of such Board should be named by the court as trustees thereof; (c) such Board of Pensions is the proper entity within such Conference to receive and administer the retired ministers’ fund for the benefit of such retired ministers within the Conference, and that the use of such funds by such Board is a charitable use.

      . Professor Bogert, in his work on Trusts and Trustees, states that the words, ‘charitable’ and ‘public’ are synonymous insofar as they pertain to the law of charitable trusts. 2 Bogert, Trust & Trustees, § 362, p. 1099.

      . Perpetuities and monopolies are contrary to the genius of a free government and shall never be allowed. Texas Constitution, Article 1, § 26.