Helm v. Inter-Ins. Exchange for Auto. Club of Mo.

Citation192 S.W.2d 417,354 Mo. 935
Decision Date11 February 1946
Docket Number39743
PartiesTom Helm, Jr., by T. C. Helm, His Next Friend, v. Inter-Insurance Exchange for the Automobile Club of Missouri, Appellant
CourtUnited States State Supreme Court of Missouri

Appeal from Jasper Circuit Court; Hon. Ray E. Watson Judge.

Reversed.

Arthur W. Allen, Seiler, Blanchard & Van Fleet and Moser Marsalek & Dearing for appellant.

(1) The evidence clearly and without dispute showed a breach of the policy condition which excluded coverage if the driver, at the time of the accident, was under 16 years of age, and entitled defendant to a directed verdict, barring circumstances of waiver or estoppel. On the latter subject the undisputed evidence was that defendant undertook the investigation and defense of the suits as the result of plaintiff's own representation that he was 16 years old when the accident occurred; that defendant had no knowledge to the contrary and no information to put it upon inquiry until plaintiff disclosed his true age during the Pauline Toles trial, and that upon verifying the facts defendant immediately disclaimed and had its counsel withdraw, by leave of court, plaintiff having secured other counsel in the meantime. Under such circumstances, defendant cannot be held liable for the loss. J. S. Stearns Lumber Co. v. Travelers Ins. Co., 159 Wis. 627, 150 N.W. 991; S. & E. Motor Co. v. N.Y. Ind. Co., 174 N.E. 65, 255 N.Y. 69; Doolan v. U.S.F. & G. Co., 85 N.H. 531, 161 A. 39; Hygienic Ice & R. Co. v. Phila. Casualty Co., 162 A.D. 190, 147 N.Y.S. 754, affirmed 222 N.Y. 538; Humphrey v. Polski, 161 Minn. 61, 200 N.W. 812; Morrison v. Royal Ind. Co., 180 A.D. 709, 167 N.Y.S. 732; Hutt v. Travelers Ins. Co., 110 N.J.L. 57, 164 A. 12; State Farm Mut. Auto. Ins. Co. v. Phillips, 2 N.E.2d 989; United States F. & G. Co. v. Wyer, 60 F.2d 856; Nussbaum v. General, etc., Assur. Corp., 238 Ky. 348, 38 S.W.2d 3; Venditti v. Muccaironi, 54 Ohio App. 513, 8 N.E.2d 460; Restighini v. Hanagan, 18 N.E.2d 1007; American Cereal Co. v. London G. & A. Co., 211 F. 96; London G. & A. Co. v. American Cereal Co., 159 Ill.App. 537; Globe Mutual L. Ins. Co. v. Wolff, 95 U.S. 326, 24 L.Ed. 387. (2) Repeated decisions of the courts of this State affirm the rule that the insurer will not be held to have waived the terms and conditions of the policy, or be estopped to set them up in its defense, in the absence of knowledge of the facts upon which the defense rests, or of circumstances putting it upon inquiry. State ex rel. Continental Ins. Co. v. Becker, 336 Mo. 59, 77 S.W.2d 100; Biggs v. Modern Woodmen of America, 336 Mo. 879, 82 S.W.2d 898; Noonan v. Hartford F. Ins. Co., 21 Mo. 81; Ordway v. Continental Ins. Co., 35 Mo.App. 426; Hodges v. American Natl. Ins. Co., 6 S.W.2d 72; Meyer Dairy Co. v. Connecticut F. Ins. Co., 287 S.W. 663; Doerr v. Natl. F. Ins. Co., 285 S.W. 961, 315 Mo. 266; National Battery Co. v. Standard Acc. Ins. Co., 41 S.W.2d 599; Fairbanks Canning Co. v. London G. & A. Co., 154 Mo.App. 327, 133 S.W. 664; Rieger v. London G. & A. Co., 202 Mo.App. 184, 215 S.W. 920; Royle Mining Co. v. Fidelity & Cas. Co., 126 Mo.App. 104, 103 S.W. 1098; Royle Mining Co. v. Fidelity & Cas. Co., 161 Mo.App. 185, 142 S.W. 438; Myers v. Continental Casualty Co., 223 Mo.App. 781, 22 S.W.2d 867; Compton Heights Ldy. Co. v. Gen. Acc. Ins. Co., 195 Mo.App. 313, 190 S.W. 382. (3) Particularly can there be no such waiver or estoppel where the facts are misrepresented or concealed by the insured. One who has been misled by the adverse party into taking a certain action or position is not estopped thereby. An estoppel against an estoppel sets the matter at large. Reclamation Co. v. Western Brokerage & S. Co., 57 S.W.2d 274; Kellog-Mackay Co. v. O'Neal, 177 N.E. 778, 39 Ohio App. 372; Milwaukee American Assn. v. Landis, 49 F.2d 298. (4) There was no evidence to show that defendant, by its attorneys, wrongfully abandoned plaintiff in the midst of the Pauline Toles trial. On the contrary, the evidence showed without dispute that the withdrawal was rightful, and was the only course open to the defendant and counsel retained by it, when plaintiff disclosed his true age. The withdrawal was with leave of court, and the undisputed evidence showed that plaintiff knew who his witnesses were and could have had them brought to court if he had so desired. The situation which developed was due to plaintiff's own act in misstating his age to the defendant, and cannot be made the basis of a recovery in his favor. Lowery v. Kansas City, 337 Mo. 47, 85 S.W.2d 104; State v. Bersch, 276 Mo. 397, 207 S.W. 809; U.S. Savings Bank v. Pittman, 86 So. 567, 80 Fla. 423; Supreme Court Rules, Rule 35 (6), 350 Mo., p. viii, Appendix. (5) The condition of the policy, excluding coverage while the automobile was being driven by any person under the age limit fixed by law, or under 16 years of age, is valid and binding on the plaintiff, and should be enforced as written. Daniel v. State Farm Mutual Ins. Co., 233 Mo.App. 1081, 130 S.W.2d 244.

Norman & Foulke for respondent.

(1) Plaintiff's action was based on tort. The petition pleaded a duty growing out of certain circumstances and the violation of that duty. The evidence clearly showed the assumption by the appellant of an obligation under contract, whereupon a duty arose not to abandon that obligation under such circumstances as to injure the rights and interests of the respondent. Once having assumed the defense of respondent's lawsuits, the appellant could not ignore the right the assured had acquired by the assumption of such defense merely because of a later discovery of a fact which, in the opinion of the appellant, put the case outside of the policy. Fairbanks Canning Co. v. London Guar. & Acc. Co., 154 Mo.App. 327, 133 S.W. 664; McDaniels v. General Ins. Co. of America, 36 P.2d 829; 6 C.J., pp. 624, 673, 886; Cowell v. Employers' Indemnity, 34 S.W.2d 705. (2) Respondent's surrender of the right to control and management of his spondent's surrender of the right to control; and management of his defense is the surrender of a valuable right, and itself, was a prejudice to respondent's rights. Fairbanks Canning Co. v. London Guar. & Acc. Co., 154 Mo.App. 327, 133 S.W. 664; Mining Co. v. Fidelity & Cas. Co., 126 Mo.App. 104, 103 S.W. 1098; Rieger v. London Guar. & Acc. Co., 215 S.W. 920. (3) Respondent's refusal to agree to defendant's qualified offer to continue with defense did not authorize their withdrawal and plaintiff's employment of other counsel was more in the nature of a coerced position on the part of plaintiff, due to the action of defendant. National Battery Co. v. Standard Acc. Ins. Co., 41 S.W.2d 599. (4) Respondent was justified by conduct of defendant in withdrawing from his defense in entering into a compromise settlement with parents of Pauline Toles as to their action. Rieger v. London Guar. & Acc. Co., 215 S.W. 920. (5) The essence of the action lies not in the circumstances under which appellant assumed the defense of the action, but rather in the violation of the duty to not abandon him at a critical time when his rights would be jeopardized and prejudiced. Fairbanks Canning Co. v. London Guar. & Acc. Co., 154 Mo.App. 327, 133 S.W. 664; McDaniels v. General Ins. Co. of America, 36 P.2d 829; 6 C.J., 6, pp. 624, 673, 886; Cowell v. Employers' Indemnity, 34 S.W.2d 705.

Tipton, J. All concur, except Douglas, J., absent.

OPINION
TIPTON

Upon application of appellant we ordered the Springfield Court of Appeals to transfer to this Court the case of Tom Helm, Jr., by T. C. Helm, His Next Friend, vs. Inter-Insurance Exchange for the Automobile Club of Missouri, reported in 189 S.W.2d 422, so that we could review the decision of that court which reversed and remanded for new trial a judgment obtained by plaintiff against defendant in the circuit court of Jasper County.

Throughout this opinion respondent will be referred to as plaintiff and appellant as defendant.

This is an action to recover damages for the withdrawal of defendant's attorneys from the defense of actions against plaintiff for damages resulting from an automobile accident.

On the night of November 18, 1937, plaintiff with another young man and two young girls, including Pauline Toles, were proceeding in an automobile of T. C. Helm, plaintiff's father, about eight miles north of Joplin, Missouri, when the automobile, driven by plaintiff, overturned and all of the young people were more or less shaken up and injured.

T. C Helm owned the automobile here involved, and defendant issued to him its policy of liability insurance, in force at the time of the accident. As alleged in plaintiff's petition, defendant "did contract to insure said T. C. Helm, or any member of his household, from direct loss or expense arising or resulting from claims upon the said T. C. Helm, or any member of his household, by reason of the ownership or maintenance of the automobile hereinbefore described and the operation thereof while in use by said T. C. Helm, or any member of his household, for business or pleasure purposes, to an amount not exceeding five thousand dollars ($ 5,000.00) for bodily injuries or death to one person in any one accident, and ten thousand dollars ($ 10,000.00) for bodily injuries or death to two or more persons in any one accident, in the event said bodily injuries or death were accidently suffered or alleged to have been suffered by any person or persons as a result of an accident occurring while this policy is in force, and in addition said Inter-Insurance Exchange for the Automobile Club of Missouri, by the terms of its said contract, among other things, agreed to investigate all accidents covered by the policy and to defend all actions against the insured at its own expense in the name and on behalf of the...

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