Employers' Indemnity Corp. v. Southwest Nat. Bank

On Rehearing.

The pleading of appellee as fixing the liability of the Employers’ Corporation is as follows:

“That through a reinsurance contract, the terms of which are not known to this plaintiff, but which are known to all the defendants, the Western Indemnity Company has reinsured the obligation of the said bond with the'Employers’ Indemnity Corporation, which company has assumed all the obligations of the said bond and has thereby become liable to the Security National Bank and this plaintiff as its successor under the terms of the said bond.”

Appellee asserts this is sufficient to support a recovery against the Employers’ because the evidence shows it took over all of the assets of the Western Company and therefore must be held, as a matter] of law, to have assumed all of the liabilities of the Western Company, under the authority of Insurance Co. v. Lovejoy (Tex. Civ. App.) 149 S. W. 398, and other cases of like nature where there was a merger of corporations.

It is hardly necessary to cite authority in support of the settled rule that, in an action upon an. express contract, the plaintiff cannot recover upon proof of an implied contract. Some of the many cases so holding are cited in 13 Michie’s Digest, 1176,1177. In the Lovejoy Case the plaintiff declared upon an express contract, and in the alternative alleged a merger of the two corporations and absorption of the one by the other. There was no question in that case of the sufficiency of the pleadings to support a recovery upon the implied contract to pay arising upon the merger.

The fact that appellee alleged that the terms of the reinsurance contract were unknown to it, but known to all of the defendants, has no bearing upon the question here presented. The quoted portion of the pleading is clearly a declaration upon an express .contract. There is no hint in the petition of an implied obligation to pay arising out of a merger. The contract offered in support of the allegation was-certainly an express contract.

Under the contract, the Employers’ re-insured and assumed all outstanding policies of the Western covering all lines of insurance issued by the latter, and it is further asserted *680by appellee that .the bond _of June 29, 1915, was an outstanding policy of insurance perforce of articles 4969-and 4989, R. S. These provisions of the statutes do not undertake to define what shall be considered policies of insurance. They authorize the creation of surety and trust companies and general casualty company and prescribe their powers.

The bond of June 29, 1915, was not an insurance contract, hut was simply a contract on the part of the Western Company, as principal, and the Employers’, as surety, to indemnify the Security National Bank against loss, etc., by reason or on account of the suit in the federal court or the cause of action .therein. So far as the Employers’ is concerned, it was an ordinary contract of suretyship, and not in any sense a contract of insurance as the latter contracts are generally understood and defined.

The motion for rehearing is overruled.

Appellants’ motion for rehearing is also overruled without comment.