American Central Ins. Co. v. Kirby, s. 22423

• Decision Date: 04 October 1956
• Docket Number: 22425,Nos. 22423,s. 22423
• Citation: 294 S.W.2d 556
• Court: Missouri Court of Appeals
• Parties: AMERICAN CENTRAL INSURANCE COMPANY, a Corporation, and Springfield Fire & Marine Insurance Company, a Corporation, Appellants, v. Effie KIRBY, Respondent.

Page 556

294 S.W.2d 556

AMERICAN CENTRAL INSURANCE COMPANY, a Corporation, and Springfield Fire & Marine Insurance Company, a Corporation, Appellants, v. Effie KIRBY, Respondent.

Nos. 22423, 22425.

Kansas City Court of Appeals, Missouri.

Oct. 4, 1956.

Knipmeyer, McCann & Sanders, Lewis W. Sanders, Kansas City, for appellants.

Cliff H. Bailey, Kansas City, for respondent.

DEW, Presiding Judge.

The appellants brought their separate actions against respondent and one Lorene Peters in which they sought a declaratory judgment to determine the rights of the parties under their identical fire insurance policies issued, respectively, to respondent on the same building, which had since been destroyed by fire. They also sought findings that they had no obligation under the policies for the loss. Respondent filed a counterclaim for the full amount of the policy in each case. Lorene Peters defaulted in both cases. By agreement the two cases were consolidated for purposes of trial and proceeded against respondent. The judgment in the cause as so consolidated was against the appellants on their petitions and in favor of the respondent for $1,750 on each of her counterclaims, with interest in the sum of $166.25 and costs. The Court denied her prayer for attorney's fees and damages for vexatious delay. Thereupon the appellants separately appealed, but upon their stipulation filed herein the appeals have been consolidated.

The petitions allege the issuance of the fire insurance policies to the respondent on her building (near Warsaw, Missouri) as therein described; that thereafter, on February 9, 1954, respondent entered into a contract with Lorene Peters for the exchange of that property for certain described property owned by the latter; that the exchange contract had been executed and acknowledged by the respondent and Lorene Peters, earnest money had been paid thereunder, and the owners had executed warranty deeds to each other. It was further alleged that on February 28, 1954, the building described in the policies was totally destroyed by fire. The petitions pleaded that both defendants had demanded payment of the policies and that an actual controversy was pending requiring a declaration of the respective rights of the parties to avoid a multiplicity of suits. It was also pleaded that the appellants are no longer obligated under their policies. The relief prayed was that the Court declare the rights of the parties and adjudge the liability of the appellants under the policies to have ceased.

The answer admits the policies and the exchange contract; alleges that no exchange of property was ever made; that no deeds were ever delivered, and avers that the title to respondent's property has at all times remained vested in her. Otherwise, the answer is in the nature of a general denial. For her counterclaims, respondent alleges the payment of the premiums due for the policies issued by the appellants on her property; that the property was totally destroyed by fire during their terms; that demand was made for the payment of the amounts of the policies, and alleges vexatious refusal by the appellants to pay. She prayed for the amounts of the two policies, with interest, damages in the sum of $175 and $500 as reasonable attorneys' fees for vexatious delay. Appellants' reply was in the nature of a general denial of the new matter alleged in the answer.

The main issue of the controversy is whether or not respondent had an insurable interest in the property insured by the policies at the time that property was destroyed by fire, February 28, 1954. Each policy provided that no assignment of it would be valid except with the written consent of the insurer.

The exchange contract in evidence, dated February 5, 1954, was by and between George N. Peters and Lorene M. Peters, parties of the first part, Effie Kirby, party of the second part, and Don-Mar Realty Company, party of the third part. The Peters therein agreed that on or before March 1, 1954, they would sell and convey to respondent by warranty deed certain property described as 'Schedule 'A", together with an assignment of all insurance policies on that property upon payment of unearned premiums. A similar clause provided that respondent Kirby would, on or before March 1, 1954, sell and convey to the Peters by warranty deed her property designated as 'Schedule 'B", together with an assignment of all insurance policies on that property upon payment of uneared premiums. It was further provided that the first and second parties would, within 20 days after date of the contract, deliver to the office of Don-Mar Realty Company complete abstracts of title to date, each to have five days thereafter to examine the abstracts and to report defects of title, if any, to the Don-Mar Realty Company, and that if such defects were not rectified within thirty days thereafter by the owner, and no extension of time be given therefor, then, at the option of the other party, the contract would become null and void and the abstracts returned to the owners.

The exchange contract further provided: 'It is further agreed that the parties to this contract shall each, within ___ days from date of execution of this contract, execute and deposit with Don-Mar Realty Company the deeds to their respective properties as designated in Schedules 'A' and 'B', to be held in trust by them until the completion of the contract, and the said Con-Mar Realty Company is authorized to deliver said deeds on completion of this contract'. The contract further provided that the place to make tender of the papers of the transaction was in the office of the Don-Mar Realty Company; that legal tender so made would bind the parties; that the party of the first part would pay Don-May Realty Company $825 commission and the party of the second, part, $425 commission.

Preston Forsee, an attorney who for a while after the fire loss represented Lorene Peters and her husband in the transaction in question, testified that about May 5, 1954, he went to the office of counsel for the Don-Mar Realty Company, agent in the transaction, and saw in that office warranty deeds which purported to have been executed by the respondent and Lorene Peters and husband; that the deed from respondent to Lorene Peters, his client, was dated February 18, 1954, as was also his client's deed to respondent; that he also saw a deed of trust securing a note for $1,500 made by respondent to the Peters. He testified that his memorandum there made recited that 'Peters paid off $1500 on the Warsaw property March 4, 1954. February 18, 1954, the insurance policy was assigned to Lorene Peters'.

Preston Forsee further testified that on May 5, 1954, he wrote a letter, received in evidence, in which he notified appellants that the Peters, before the fire, had acquired the insured property by an exchange contract with respondent; that the agent was holding the policies for fear of litigation in the matter and that deeds and insurance assignments had been executed. He demanded that appellants withhold any payment of the policies until the parties had come to an agreement or their rights had been determined by a competent court.

On June 4, 1954, George Peters handed to Preston Forsee a letter received from respondent as follows:

'Kansas City, Missouri

'June 4, 1954.

'To Don-Mar Realty Company and George N. Peters and Lorene M. Peters

'You and each of you are to take notice that I do not intend to comply with the terms of a real estate exchange contract entered into between you and myself and dated the 5th day of February, 1954, and that the deeds, and deeds of trust, notes, insurance assignments and other documents pertaining to said exchange of properties now in the hands of Cliff Bailey, attorney for Don-Mar Realty Company, signed by me, are hereby rescinded, and I now state that whatever sum I owe Lorene Peters and George Peters because of my refusal to complete the exchange of properties, I will pay them, and Don-Mar Realty Company is requested to refund to the said Peters the $825.00 commission collected from said Peters by said Don-Mar Realty Company.

'Effie E. Kirby'.

On cross-examination Preston Forsee said that the Peters never did have the deed from the respondent in their possession, and that the attorney for the Realty Company never offered to deliver it to him. A suit was later filed by the Don-Mar Realty Company against respondent and Lorene M. Peters and husband for a decree permitting it to appropriate the funds deposited with it in the transaction in question to apply on its claim against the parties to the contract for commission and attorneys' fees and expenses. The witness further testified that on June 24, 1954, he received a written 'release' from George and Lorene Peters as attorney in 'the case of Effie Kirby'.

Don Robinson, witness for the appellants, testified that he operated under the name of Don-May Realty Company and was the agent for the parties in the exchange contract described. He said he recalled seeing deeds in the transaction in the files in his office, signed by respondent and Lorene Peters and husband, and dated February 18, 1954; that his company on or about June 17, 1954, had sued respondent over the transaction; that one of the parties had 'backed out' and wanted to call off the deal 'or something like that'. The petition in his case, allowed in evidence without objection, alleged that the parties had executed assignment of insurance on the same date. Witness said he was told by one of the parties 'to hold the money and not turn over--I don't remember when the fire occurred but I think that is what caused us not to go through with it'. He said that the parties had never directed him to deliver their deeds to each other; that Mr. Peters had asked him to hold the money and 'everything', had said he 'would not go through with this contract'. The witness said he had never delivered any assignments of the insurance to...