American Central Ins. Co. v. Meredith

• Decision Date: 11 June 1956
• Docket Number: No. 39980,39980
• Citation: 87 So.2d 871,228 Miss. 402
• Parties: AMERICAN CENTRAL INSURANCE COMPANY et al. v. W. E. MEREDITH.
• Court: Mississippi Supreme Court

Page 871

87 So.2d 871

228 Miss. 402

AMERICAN CENTRAL INSURANCE COMPANY et al. v. W. E. MEREDITH.

No. 39980.

Supreme Court of Mississippi.

June 11, 1956.

J. Robertshaw, Greenville, for appellant.

Edward J. Bogen, Greenville, for appellee.

McGEHEE, Chief Justice.

The plaintiff, W. E. Meredith, procured the issuance of a fire insurance policy by the defendant, American Central Insurance Company, on January 27, 1954, in the sum of $1,000, covering a store building wherein he had formerly kept a post office and operated a mercantile business, and on September 12, 1954, he procured the issuance of an additional fire insurance policy by the defendant, Pacific National Fire Insurance Company, in the sum of $500, covering the same property. Both policies were renewals of earlier policies, and were issued by the same agent, Mr. Paul Holland, of Hollandale, Mississippi. Neither policy disclosed the existence of the other.

Each policy contained the following clause: 'Total insurance (does not apply to any of the perils named in the Extended Coverage)--Other insurance is prohibited unless the total amount of insurance, including the amount of this policy, is inserted in the blanks provided on the first page of this policy under the caption Total Insurance. This company shall not be liable for loss while the insured shall have any other insurance prohibited by this policy.' On December 28, 1954, the insured building was completely destroyed by fire. Thereafter the insurance adjuster made an endorsement on each of the policies to show the existence of the other, since they had been written by the same agent, and his knowledge was imputed to the respective companies.

Separate suits were filed by the plaintiff for the collection of the $1,000 on the policy issued by the defendant, American Central Insurance Company, and for the collection of the $500 on the policy issued by the defendant, Pacific National Fire Insurance Company. By agreement, the suits were consolidated and tried as one action.

The defense interposed in each suit was that on January 16, 1954, the plaintiff had renewed a policy of January 16, 1953 in the sum of $1,000, issued by the Mississippi Farm Bureau Mutual Insurance Company and in force and effect prior to the issuance of either of the two policies by the defendants, who are appellants here.

In their answers the defendant companies alleged that they had no notice of the outstanding policy issued on this building by the Mississippi Farm Bureau Mutual Insurance Company until after the fire, and until after the entry of the endorsements on their policies by the adjuster. On the trial there was a conflict in the testimony on that issue.

In their answers the defendant companies further alleged that the fair replacement value of the destroyed building, using new construction, was $1,711.93, and that the actual value of the building at the time of the fire was not in excess of the aggregate of the two policies issued by the defendant companies, that is to say, the sum of $1,500. They denied that the actual value of the destroyed building was worth the sum of their policies plus the policy issued by the Mississippi Farm Bureau Mutual Insurance Company, that is to say, the sum of $2,500.

In his replication the plaintiff denied that the fair replacement cost of the building, new, would be only $1,711.93, and alleged that its value at the time of the fire was in excess of $2,500.

The plaintiff testified that the agents who wrote this insurance inspected the property several times in connection with the renewals of the policies. The plaintiff was asked: 'Q. Did you notify Mr. Holland that you were taking out this policy? A. When I went over there to pay my premiums in January, he asked me if the building had a stove flue from the ground up, and he said 'Have you got enough insurance?' and I told him, 'yes,' that the Farm Bureau kept worrying me to take over my insurance account and I gave them $1,000. Q. Did Mr. Holland object to it? A. No, sir, he asked how much cheaper it was and I told him that it was some cheaper.' But Mr. Holland denied that the plaintiff advised him of the existence of any additional insurance. In other words, there was an issue of fact for the determination of the jury as to whether or not Mr. Holland when issuing the policy on behalf of the defendant, American Central Insurance Company, on January 27, 1954, and when issuing the policy on behalf of the defendant, Pacific National Fire Insurance Company, on September 12, 1954, had knowledge of the existence of the insurance issued on January 16, 1954, by the Mississippi Farm Bureau Mutual Insurance Company, which was being renewed from year to year. The jury resolved the conflict in the testimony in favor of the plaintiff, and rendered a verdict in his favor for the sum of $1,500, representing the liability of one of the defendants for the sum of $1,000 and of the other for $500.

It is the well established rule in this state that the...