D.M.A.F.B. Federal Credit Union v. Employers Mut. Liability Ins. Co. of Wis.

• Decision Date: 22 October 1964
• Docket Number: No. 7386,7386
• Citation: 96 Ariz. 399,396 P.2d 20
• Parties: D. M. A. F. B. FEDERAL CREDIT UNION, Appellant, v. EMPLOYERS MUTUAL LIABILITY INSURANCE COMPANY OF WISCONSIN, Appellee.
• Court: Arizona Supreme Court

Page 20

396 P.2d 20

96 Ariz. 399

D. M. A. F. B. FEDERAL CREDIT UNION, Appellant, v. EMPLOYERS MUTUAL LIABILITY INSURANCE COMPANY OF WISCONSIN, Appellee.

No. 7386.

Supreme Court of Arizona, In Banc.

Oct. 22, 1964.

Paul S. Fries, Tucson, for appellant.

Robert W. Browder, Phoenix, for appellee.

LOCKWOOD, Vice Chief Justice.

Plaintiff-insured instituted action against defendant-insurer to recover from the insurer under a Chattel Lien Non-filing Bond issued by defendant to plaintiff. Following the presentation of plaintiff's evidence before the trial court sitting without a jury, the trial judge granted the insurer's motion for involuntary dismissal pursuant to Rule 41(b), Arizona Rules of Civil Procedure, 16 A.R.S. The insured brings this appeal from the granting of the insurer's motion and the judgment entered thereon.

The facts as found by the trial court are as follows: The insured and insurer entered into a contract of insurance on or about March 26, 1957. The policy of insurance was in full force and effect during all the times material to this action. While the policy of insurance was in effect, the insured extended credit to various persons and took certificates of title and/or chattel mortgages from them on certain property as security. On February 16, 1960, in accordance with paragraph 5 Notice-Proof of Loss of insurer's Non-Filing bond, the insured filed with the insurer various 'proofs of loss.' At the time the insured made its claim against the insurer and at all times material to the action, the insured did not know the location of any of the property represented by the various instruments under which it extended credit. During these times the insured knew only the identity of the persons to whom it had extended credit but did not know the location or the identity of the person, persons, or corporations having possession of the property represented by said instruments or having legal or equitable title thereto.

Paragraph 5 of the policy provides as follows:

'5. NOTICE-PROOF OF LOSS. The insured shall, upon becoming aware of any loss in respect to an instrument (a) Give notice thereof as soon as practicable to the company or any of its authorized agents and deliver to the company a statement setting forth the account number, if any, of such instrument, the name and last-known address of the buyer or mortgagor thereunder, a description of the property covered thereby, the present value thereof, the location thereof, if known, the date of such instrument, the amount owing on or secured thereby at the time of the acquisition thereof by the insured, and the unpaid balance owing thereon or secured thereby, and (b) exert all reasonable efforts to reduce, eliminate or prevent such loss. Upon failure thereafter to collect the full amount unpaid on or secured by such instrument, the insured shall thereupon file with the company a sworn proof of loss setting forth the total of uncollected balance, if any. The company shall have sixty days after receipt of such proof of loss in which to varify and investigate such claims and make payment, during which time no legal proceedings shall be brought against the company.'

In the 'Conditions' portion of the policy, the following definition is set out:

'2. LIMIT OF LIABILITY. * * * The term 'time of loss' means (a) the time the property represented by the instrument is located by the insured, or (b) the time the person, persons or corportion having legal or equitable title to the property represented by the instrument are located by the insured, whichever occurs first.'

The 'Exclusions' portion of the policy provides as follows:

'This bond does not apply to: * * * (d) any loss unless either the property represented by the instrument or the person, persons or corporation having possession of the property or having legal or equitable title thereto has been located by the insured at the time claim is made; * * *.'

In granting the insurer's motion for involuntary dismissal, the trial court stated the following as its conclusions of law:

'Any loss sustained by plaintiff in the premises is excluded from coverage under Exclusion (d) of the policy of insurance sued upon, for the reason that at the time plaintiff made its claim against defendant, and at all time material hereto, plaintiff had not located and did not know the location of the property represented by the instruments under which it extended credit, nor did plaintiff at such time or at any time material hereto know the location or the identity of the person, persons or the corporation having possession of the property...