Ash-Grove Lime & Portland Cement Co. v. Southern Sur. Co.

• Decision Date: 25 May 1931
• Parties: ASH-GROVE LIME AND PORTLAND CEMENT CO., A CORPORATION, RESPONDENT, v. SOUTHERN SURETY CO., A CORPORATION, APPELLANT
• Court: Kansas Court of Appeals

39 S.W.2d 434

225 Mo.App. 712

ASH-GROVE LIME AND PORTLAND CEMENT CO., A CORPORATION, RESPONDENT, v. SOUTHERN SURETY CO., A CORPORATION, APPELLANT

Court of Appeals of Missouri, Kansas City

May 25, 1931

Appeal from the Circuit Court of Jackson County.--Hon. A. Stanford Lyon, Judge.

AFFIRMED.

Judgment affirmed.

C. A Randolph for respondent.

Burns & White for appellant.

ARNOLD J. Bland, J., concurs. Trimble P. J., absent.

OPINION

ARNOLD, J.

This is an action to recover upon what is known as a "fleet" or "schedule" liability insurance policy.

Plaintiff is a corporation, duly organized under the law, having its principal offices at Kansas City, Missouri, and engaged in the manufacture and sale of lime, cement and other products, and in connection with the operation of its business, salesmen and other persons were employed and automobiles were owned and used in carrying on its business in the State of Missouri and elsewhere, including the States of Arkansas and Louisiana. Defendant also is a corporation, duly organized and existing under the law, and transacting a general casualty and surety business in the State of Missouri and other states, and is engaged in writing, among other forms of insurance, policies of liability insurance, protecting and indemnifying the owners of automobiles against liability for personal injuries and damage to property caused by the use, maintenance, ownership and operation of such automobiles.

On April 28, 1927, defendant issued a policy of insurance agreeing to indemnify plaintiff against loss by reason of liability imposed upon it by law for damages on account of bodily injuries accidentally sustained, including death resulting therefrom, subject to the exceptions, conditions and limitations stated therein. Attached thereto was a schedule of the automobiles operated by insured and covered by the policy. There was an indorsement on the policy providing for changes in the particular automobiles covered. The provisions applicable to this phase of the policy are as follows:

"II. To indemnify the assured against loss by reason of the liability imposed upon him by law for damages on account of injury to or the destruction of property except (a) any property of the assured; (b) any property in the custody of the assured, or any of his bailees, and/or property which is rented or leased by the assured; (c) any property carried in or on any automobile of the assured, which injury or destruction shall result solely and directly from an accident due to the ownership, maintenance or specified use of any of the automobiles enumerated and described in said declarations. This indemnity shall not apply unless a specific premium for damage to property is stated in item eight (8) of said declarations.

"VIII. This agreement shall apply to bodily injuries accidentally sustained and/or injury to or the destruction of property so sustained by reason of the ownership or maintenance of any of the automobiles enumerated and described in said declarations and the use of such automobiles for the purposes specified in Item 8 thereof. This agreement shall not apply in respect to any automobile (1) while driven or manipulated in any race or any competitive speed test, or (2) while rented to others or used for carrying passengers for a consideration, or (3) while being operated by any person under the age of sixteen years, or (4) while being used for any purpose other than specified in Item 8 of the declarations, or (5) while being used for towing or propelling a trailer therefor unless such privilege is endorsed hereon and a proper premium charged therefor. This agreement shall not apply to any public automobile garage, automobile repair shop, automobile sales agency, automobile service station and the agents or employees thereof.

"It is also understood and agreed that this policy is extended to cover automatically, from the date of their acquisition, any additional cars the assured may obtain by purchase or trade, provided the assured shall within thirty (30) days from the date of their acquisition make a report to the company of said cars and pay an additional premium on a pro rata basis."

The policy also contained the following, designated as provision D.

"Whenever the assured or bailees shall have knowledge or receive information of any occurrence which might result in a claim against the assured or bailees for damages on account of bodily injury sustained or for any other cause, and for which claim they might expect indemnity under this policy, then the assured or bailees shall give immediate written notice to the company or its duly authorized agent. The assured or bailees shall give like notice with full particulars of any such claim and if any suit or other proceeding is instituted against the assured or bailees on account of such claim, the assured or bailees shall immediately forward to the company or its duly authorized agent every notice, summons, or other process served upon the assured or bailees. No person claiming indemnity hereunder shall voluntarily assume any liability either before or after an accident, settle any claim nor incur any expense other than for immediate surgical relief except at his own cost, nor interfere in any negotiation for settlement or legal proceeding without the consent of the company previously given in writing. Any person claiming indemnity hereunder, whenever requested by the company shall aid in securing information and evidence and the attendance of witnesses and in effecting settlements and in prosecuting appeals, and shall cooperate with the company in the defense of any claims or suits on account of which indemnity is expected under this policy. It is understood and agreed that between the company and the assured and/or any person claiming indemnity under this policy, that a literal and strict compliance with the requirements of this condition "D" is the essence of the contract and a condition precedent to recovery under this policy."

The petition is formal, alleging the execution of the policy, setting out the circumstances of an accident whereby a man was killed by an automobile owned by plaintiff and driven by one of its salesmen, and that

"On or about the 4th day of November, 1927, while said policy was in full force and effect and while one of the agents and servants of the plaintiff was operating a Willys-Knight automobile, owned by the plaintiff and in plaintiff's service, and covered by said policy of insurance, at or near the Town of Benton, Saline County, Arkansas, said automobile collided with one A. F. Boswell, inflicting such bodily injuries upon him that the said Boswell died as a direct result thereof on or about the 5th day of November, 1927."

The petition further alleges the accident was reported to defendant on November 5, 1927, with details and particulars; that defendant took charge of said claim on behalf of plaintiff, but that thereafter on about November 16, 1927, defendant denied liability under the policy as to said accident, death and claim, and that thereafter plaintiff handled and finally settled the case for $ 1,000, and $ 150 for expenses and attorney fees. It is alleged plaintiff "has done and performed all conditions required on its part to be performed according to the terms and provisions of said policy. " The policy is attached to the petition as exhibit "A." Judgment is asked in the sum of $ 1500, $ 500 for vexatious refusal to pay and $ 800 for attorney's fee, making a total of $ 2450, for interest at six per cent per annum from November 22, 1927, and for costs.

Defendant's first answer was a general denial. But a few months before the trial an amended answer was filed, admitting execution and delivery of the policy and setting up certain provisions thereof relating to exceptions and claims for property damage and to accidents occurring while engaged in racing, carrying passengers for hire, operation by persons under age, etc. The answer also sets up sections of the policy providing for automatic coverage for cars acquired by trade or purchase during the policy year, with provisions for making report thereof in thirty days, and paying an additional premium on a pro rata basis. The amended answer states no specific premium was paid to cover the Willys-Knight automobile and that the acquisition of such car was not reported to defendant within thirty days thereafter.

The reply to the amended answer pleaded with more particularity the acts of waiver it proposed to show under and by virtue of the "performance clause" referred to in the petition; states that, under the provisions of the policy, plaintiff was entitled to return of the unearned premium on the Dodge coupe, listed in the schedule attached to the policy, from date of sale of the same on June 11, 1927, if defendant did not intend to apply same on the Willys-Knight car for which the Dodge was traded on said date, since there was no further liability on the Dodge car after the exchange, and that the cancellation clause of the policy entitled plaintiff to a pro rata return of the premium; that defendant had retained such portion of the premium on the Dodge car. The reply further charges the insurance policy contained no provision for forfeiture in case insured failed to notify insurer of the exchange of automobiles within thirty days after such exchange; sets up other matter as constituting a waiver by insurer of failure to give such notice, and that insurer is estopped to assert a forfeiture by reason of its said acts, which were inconsistent with a claim of forfeiture and which acts misled insured to its prejudice. Judgment is prayed in the reply in accordance with the petition.

Upon the issues thus made the cause was tried to a jury, resulting in...