Cova v. Bankers & Shippers Ins. Co. of New York

• Decision Date: 05 January 1937
• Docket Number: No. 23879.,23879.
• Citation: 100 S.W.2d 23
• Court: Missouri Court of Appeals
• Parties: COVA v. BANKERS & SHIPPERS INS. CO. OF NEW YORK.

100 S.W.2d 23

COVA v. BANKERS & SHIPPERS INS. CO. OF NEW YORK.

No. 23879.

St. Louis Court of Appeals. Missouri.

January 5, 1937.

Rehearing Denied January 22, 1937.

Appeal from Circuit Court, St. Louis County; Fred E. Mueller, Judge.

"Not to be published in State Reports."

Action by Helen Cova, doing business as the White Way Transportation Company, against the Bankers & Shippers Insurance Company of New York. From a judgment for plaintiff, defendant appeals.

Affirmed.

Cullen, Fauntleroy & Edwards, of St. Louis, for appellant.

Taylor, Chasnoff & Willson and J. H. Cunningham, Jr., all of St. Louis, for respondent.

BENNICK, Commissioner.

This is an action upon a policy of collision or upset insurance. The judgment below was for plaintiff for the sum of $1,460, and defendant has duly appealed to this court.

The plaintiff is Helen Cova, the insured under the policy, who is engaged in business as the White Way Transportation Company.

On May 31, 1933, plaintiff placed an order with the International Harvester Company of America for a two-ton International truck, which, with extra equipment, cost plaintiff the total sum of $1,625. The actual cost of the truck, not including the extra equipment, was $1,483, of which plaintiff paid the company the sum of $100 upon the placing of the order, and then executed a series of promissory notes for the balance of $1,383 still due upon the purchase price.

Contemporaneously with the execution of the notes and for the purpose of securing the payment of the same, plaintiff executed to the seller a chattel mortgage upon the truck, which mortgage had not been satisfied at the time of the loss, although there was evidence to show that the debt secured thereby had meanwhile been reduced to the sum of $1,283.

Delivery was made to, and the truck put in use by, plaintiff on June 4, 1933, on which date the defendant, Bankers & Shippers Insurance Company of New York, executed, through its local St. Louis agency, the policy sued on herein, by the terms of which plaintiff was insured, in an amount not exceeding the actual cash value of the truck less the sum of $50 deductible, against direct loss or damage to the truck resulting from accidental collision or upset.

The policy provided for the furnishing of proof of loss within sixty days after the occurrence of the loss or damage for which claim was made, and contained other provisions relieving the insurer from liability if there was other insurance covering the loss which would have attached if the insurance in suit had not been effected, or, if the property insured was subject to an undisclosed lien or encumbrance. Still another provision was that the insurer might require from the insured an assignment of all right of recovery against any party for loss or damage to the extent that payment therefor might have been made under the policy.

Incidentally, in the form of order used by plaintiff in purchasing the truck from the International Harvester Company, it was provided that whenever a mortgage was given to secure deferred payments upon the purchase price of a truck, the seller, unless it was otherwise agreed at the time, would take charge of insuring the truck against fire for the benefit of all parties concerned, the expense of said insurance to be covered by the time finance charge made against the purchaser.

Conformably with this provision of the order, the International Harvester Company, upon the sale of the truck to plaintiff, took out a policy from the Homeland Insurance Company of America insuring the truck against direct loss or damage by fire, regardless of the cause of the same, for a limited liability of $1,100. Reciting the fact of the encumbrance upon the truck, the policy provided that the loss, if any, covered thereby should be paid to the International Harvester Company and others as their respective interests might appear.

Plaintiff, or at least her brother who acted as her agent in the matter of securing her insurance, was aware of the fact that the International Harvester Company either had taken out or would take out a policy insuring the truck against loss or damage to it by fire, and for that reason, in making application to defendant's local agency for the policy now in suit, had not requested any specific fire coverage such as was contained in the policy issued by the Homeland Insurance Company.

On July 13, 1933, while one of plaintiff's employees was driving the truck along a highway some six miles south of Frederick-town, Mo., it was caused to turn over, slide upon its side against a concrete highway marker which it demolished, and then strike against a tree, where it came to rest and immediately burst into flames.

At the time of the upset and ensuing damage the truck had been in operation only six weeks, and had been driven only 1,500 miles. The destruction of it was complete so far as its further use as a truck was concerned, and, as a matter of fact, when the truck was salvaged and sold for junk, only the sum of $65 was realized, of which $50 was paid out as a towing fee and the balance of $15 credited to plaintiff's account with the International Harvester Company.

Immediately following the loss plaintiff notified both defendant and the International Harvester Company of what had occurred, and made demand upon defendant to pay the loss, which plaintiff's evidence showed had amounted to $1,510 as the then actual cash value of the truck and its equipment after deducting the sum recovered from the salvage. With allowance made for the sum of $50 deductible under its policy, defendant's liability, if it was liable for the whole of the loss, would therefore have been limited to the sum of $1,460, which, incidentally, was the amount of the verdict subsequently returned against it by the jury.

Not only did plaintiff communicate with defendant in regard to her loss, but, through the intervention of the International Harvester Company, she was likewise put in touch with the local representative of the Homeland Insurance Company, which, it will be recalled, had issued the policy of fire insurance to the former company.

A controversy at once arose as to the respective liabilities, if any, of the two insurance companies. Defendant freely admitted its liability under its policy issued to plaintiff for the damages to the truck that had resulted purely from the upset and collision, but with the damages solely attributable to the ensuing fire excluded, under which theory the limit of its liability would have been the approximate sum of $275 less $50 deductible. In other words, in all the negotiations between it and plaintiff, it took the position that it should be permitted to discharge its liability by the payment of a sum representing the damage that had been done to the truck before the fire broke out, and that the damage that had been caused purely by the fire and which would not have resulted if the truck had not caught on fire should be taken care of by the Homeland Company which had issued the policy of fire insurance.

So far as the Homeland Company was concerned, there was evidence that plaintiff had made no direct claim upon it for the payment to her of any portion of her loss, inasmuch as she had not personally obtained the policy of insurance from it. She, or her agent, did have numerous conferences about the matter with its local representative, however, and the two insurance companies argued the question of their respective liabilities back and forth between themselves, with the Homeland Company taking the position that the upset or collision was the proximate cause of the entire loss or damage to the truck, and that defendant should therefore bear the entire responsibility, with the Homeland Company relieved of any liability for that portion of the loss attributable to the fire, even though it had concededly issued a policy insuring the truck against the peril of fire arising from any cause whatsoever.

Within the period of sixty days after the occurrence of the loss or damage for which claim was being made, plaintiff requested a form from defendant for making proof of loss, and was handed a form already filled out by defendant stating the amount of the loss for which defendant was to be liable as $275 less $50 deductible. Inasmuch as defendant's adjuster had refused to pay plaintiff in excess of that sum, and inasmuch as she was unwilling to permit defendant to discharge its liability to her by any such payment, the form for proof of loss was never signed by plaintiff and filed with defendant, but instead preparations were begun for the institution of the present action against defendant.

There is this to be said for the Homeland Company, that, despite its denial of any liability, it recognized that plaintiff was an innocent party in the controversy who was about to be penalized because of the fact that the two insurance companies were unable to reach an agreement with one another in regard to the matter of prorating the loss, and it therefore wrote plaintiff on January 26, 1934, agreeing to purchase, or cause to be purchased, from the International Harvester Company the notes and chattel mortgage owed by plaintiff to that company, with the understanding that the Homeland Company would be reimbursed for the amount paid by it in making such purchase out of the proceeds of any recovery by plaintiff from the defendant herein in connection with the matter.

It went on in its letter to express its understanding that plaintiff had theretofore employed attorneys to file suit against the defendant herein to recover the full amount of the collision damages, and it advised her that, if its proposal was satisfactory to her, it would see to it that she would not be required to pay any attorneys' fees in connection with the prosecution of such suit.

It concluded its letter with the statement that any and all money recovered by plaintiff would belong to her and that she would only be required...