Detroit Fire & Marine Ins. Co. v. Oklahoma Terminal E. Co.

• Decision Date: 10 April 1933
• Docket Number: No. 724.,724.
• Citation: 64 F.2d 671
• Parties: DETROIT FIRE & MARINE INS. CO. v. OKLAHOMA TERMINAL ELEVATOR CO. et al.
• Court: U.S. Court of Appeals — Tenth Circuit

64 F.2d 671 (1933)

DETROIT FIRE & MARINE INS. CO. v. OKLAHOMA TERMINAL ELEVATOR CO. et al.

No. 724.

Circuit Court of Appeals, Tenth Circuit.

April 10, 1933.

F. A. Rittenhouse and John F. Webster, both of Oklahoma City, Okl. (F. A. Rittenhouse and Walter D. Hanson, both of Oklahoma City, Okl., on the brief), for appellant.

John Embry, of Chandler, Okl. (Embry, Johnson, Crowe & Tolbert, of Oklahoma City, Okl., on the brief), for appellees.

Before COTTERAL and McDERMOTT, Circuit Judges, and JOHNSON, District Judge.

COTTERAL, Circuit Judge.

This suit was brought by the Oklahoma Terminal Elevator Company, joined by certain assignees, to recover upon a policy of insurance, issued upon its elevators at Purcell, Okl., by the Detroit Fire & Marine Insurance Company, on September 13, 1928. The plaintiff alleged that the consideration for the policy was an annual premium paid of $199.10; that the elevators were damaged by fire on January 16, 1929; that due proof of loss was made to the insurance company, and for refusal of payment judgment was demanded for $10,000, with interest. The answer, in addition to a general denial, alleged that under a provision of the policy, which provided for cancellation at the request of the insured or by the company on five days' notice, the company, on December 19, 1928, gave notice to the elevator company of the cancellation, and on or about December 27, 1928, the policy was delivered by the company to the defendant for cancellation and canceled. In a reply, plaintiffs denied the fact of cancellation.

The case was tried to a jury, and resulted in a verdict awarding plaintiffs $7,826.09 as damages, which was reduced by the court to $7,000.90, and judgment was rendered for that amount, with interest from date of verdict. The insurance company appeals, and complains of errors in overruling its demurrer to plaintiffs' evidence, denying its motion for a directed verdict, instructing the jury, and denying a motion for a new trial.

The assignment based on the overruling of the demurrer to the evidence is not well founded. By introducing evidence in defense, the error, if any, was waived. Fisher Mach. Works Co. v. Dougherty (C. C. A.) 231 F. 910; Crowell Bros. v. Panhandle Grain & Elev. Co. (C. C. A.) 271 F. 129; Walton Trust Co. v. Taylor (C. C. A.) 2 F.(2d) 342.

The motion for a directed verdict interposed at the close of the evidence was based on its insufficiency and the related ground that E. V. Mashburn was the agent of the elevator company and not of the insurance company. A motion of that character may prevail only when the evidence is undisputed, or when it is of such conclusive character that a verdict to the contrary should be set aside, in the exercise of sound judicial discretion. Slocum v. New York L. Ins. Co., 228 U. S. 364, 33 S. Ct. 523, 57 L. Ed. 879, Ann. Cas. 1914D, 1029; Small Co. v. Lamborn & Co., 267 U. S. 248, 45 S. Ct. 300, 69 L. Ed. 597; Gunning v. Cooley, 281 U. S. 90, 50 S. Ct. 231, 74 L. Ed. 720; Frankel v. New York Life Ins. Co. (C. C. A.) 51 F.(2d) 933.

It was not questioned at the trial that the policy in suit was issued and was in force, unless it was canceled. A clause of the policy provides that it was subject to cancellation at any time at the request of the insured or by the company on five days' notice. The defense actually made was that the policy was canceled by mutual agreement. The evidence must be reviewed to determine whether there was a conflict in the testimony on that subject.

Frank Gresham represented the elevator company in obtaining and dealing with insurance. E. V. Mashburn was an insurance broker. He was also the agent of the Travelers' Insurance Company at Oklahoma City. He solicited insurance patrons in other companies, but did not represent the defendant company, or its agent, J. F. McCullough. The transactions between those parties began in September, 1927, when Mashburn delivered to Gresham three policies for $10,000 each, in the Travelers', Northern, and the defendant company. It was arranged between him and Gresham that the latter might have time to pay the premiums which were charged to Mashburn. The policy in suit was a renewal and the annual premium was $199.10. Agent McCullough remitted the premium to his company, less 15 per cent. His commission was 5 per cent. and Mashburn's 10 per cent.

Gresham's account was that the policies were intrusted to Mashburn; that Mashburn came to his office and represented that letters had been written canceling the policies, and denying him further credit, but, if Gresham could pay $100 on the premium, Mashburn would see what he could do about holding up the letters; that witness requested more time, promised to pay $100 before January 1st, and paid $49.10 by check at the time; that witness told Mashburn the insurance was necessary, and, if he could not rewrite the policies, they would be given to some one else, and he would give C. R. Haskett $10,000; that he saw Mashburn on December 18 and paid him the balance of $100, when nothing was said about canceling the policy in suit or a surrender of it, and witness never authorized its cancellation; that he saw Mashburn the day before the fire (January 15th), when Mashburn gave him a statement of account, showing $640.31 as due, in which appeared the premium on the policy in suit; that he informed Mashburn he could then pay nothing, and the matter of cancellation was not mentioned; that he saw Mashburn the next day after the fire, when he informed the witness the policy had been canceled for about a month.

Mashburn's account was that he went to Gresham's office and told him McCullough and Whitehurst had requested cancellation of all outstanding insurance and were preparing five-day notices; that Gresham said it would ruin him; that Mashburn proposed an agreement to deliver the policies to him within the five days, and, if agreed to, he would try to arrange with McCullough and Whitehurst not to send out the...