Buell v. United Firemen's Insurance Company
| Decision Date | 30 April 1926 |
| Docket Number | 24,961 |
| Citation | 208 N.W. 819,167 Minn. 183 |
| Parties | A. W. BUELL AND OTHERS v. UNITED FIREMEN'S INSURANCE COMPANY |
| Court | Minnesota Supreme Court |
Action in the district court for Ramsey county upon a policy of insurance against theft of an automobile. The case was dismissed by Hanft, J., without objection as to the plaintiff finance corporation and over objection as to plaintiff Buell. The jury returned a verdict for the defendant insurance company against the plaintiff Studebaker Sales Company. Plaintiffs Buell and Studebaker Company appealed from an order denying their motion for a new trial. Affirmed.
No recovery against insurance company when it could immediately recover by right of subrogation.
1. The defendant was the insurer of an auto owned by the plaintiff Buell with loss payable to the plaintiff Studebaker Sales Company, its vendor in a conditional sales contract, as its interest might appear. After the theft Buell bought another car of the Studebaker company and assigned to it the insurance with the understanding that the amount recovered above that to which it was entitled under the loss payable clause, should be applied on the purchase price. The insurance company, upon payment of the loss, would be subrogated to any cause of action Buell might have against another for negligence causing the loss. It defendant upon the ground that the negligence of the Studebaker company caused the loss, and therefore it should not be permitted to recover, when, upon payment, the defendant could immediately recover by right of subrogation; and upon the further ground that Buell breached a covenant in the policy relative to diligence in caring for the auto so as to prevent recovery by anyone. The case was tried and submitted on both these claims.
Special findings of jury sustained by evidence.
2. The jury found that the plaintiff Buell did not breach the condition of the policy, and that he was not negligent. It found that the Studebaker company which had custody of the auto for inspection and repair was negligent. The evidence sustains the findings.
Upon findings no recovery by vendor against insurance company.
3. Under these findings the Studebaker company could not recover for a loss sustained through its negligence; and if the loss was through its negligence the effect was that the amount which otherwise would have been recovered on the policy, less the amount to which it was entitled under the loss payable clause, was in law a payment on the new auto sold by it to Buell.
Burglary and Theft Insurance, 9 C.J. p. 1099 n. 71.
Insurance, 32 C.J. p. 1315 n. 47; 33 C.J. p. 43 n. 42.
Sales, 35 Cyc. p. 271 n. 55 New.
See notes in 44 L.R.A. (N.S.) 75; 51 L.R.A. (N.S.) 584; L.R.A. 1915E, 579; L.R.A. 1917F, 543; 14 A.L.R. 215; 19 A.L.R. 971; 24 A.L.R. 740; 14 R.C.L. 1271; 3 R.C.L. Supp. 376; 4 R.C.L. Supp. 957; 5 R.C.L. Supp. 807.
Arthur E. Shanahan, for appellants.
Brown & Guesmer, Edwin C. Brown and Charles A. Loughin, for respondent.
Action on a policy of insurance against the theft of an automobile owned by the plaintiff Buell. He had bought it of the plaintiff Studebaker Sales Company on a conditional sales contract. The insurance was payable, as their interests might appear, to the Industrial Finance Corporation and the Studebaker company. These two companies and Buell were the plaintiffs. At the trial the case was dismissed without objection as to the finance corporation, its interest having ceased, and over objection as to the plaintiff Buell. There was a verdict for the defendant and against the plaintiff Studebaker company. The plaintiffs Buell and the Studebaker company appeal from the order denying their motion for a new trial.
1. The Studebaker company had an interest in the insurance, by virtue of the loss payable clause, to the extent of the unpaid portion of the purchase price of the auto. After the theft Buell bought another car of the Studebaker company, and assigned to it the insurance covering the stolen one. The company was to collect, and the amount collected in excess of the amount to which it was entitled under the loss payable clause was to be applied on the purchase price of the new auto. Buell warranted in the policy that the auto would be equipped with a specified locking device, and in connection therewith entered into this undertaking:
"The assured undertakes during the currency of this policy to use all diligence and care in maintaining the efficiency of said locking device and in locking the automobile when leaving the same unattended."
The answer alleged a breach of the undertaking to use diligence and care when leaving the auto unattended. It alleged, further, that the plaintiff Studebaker company, in whose custody Buell placed the auto for inspection and repair, was negligent in caring for it.
Under the loss payable clause the Studebaker company was the appointee to receive the insurance money, to the extent of its loss, which otherwise would go to Buell. It could not recover if Buell could not; nor did the assignment put it in a better position than Buell as to any portion of the insurance. The loss payable clause was the equivalent of an open mortgage clause as distinguished from the union mortgage clause. Allen v. St. Paul F. & M. Ins....
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