Daniel v. State Farm Mut. Ins. Co.

• Decision Date: 03 April 1939
• Docket Number: No. 19037.,19037.
• Court: Missouri Court of Appeals
• Parties: W.O. DANIEL, RESPONDENT, v. STATE FARM MUTUAL INSURANCE COMPANY, APPELLANT.

130 S.W.2d 244

W.O. DANIEL, RESPONDENT, v. STATE FARM MUTUAL INSURANCE COMPANY, APPELLANT.

No. 19037.

Kansas City Court of Appeals. Missouri.

April 3, 1939.

Appeal from the Circuit Court of Adair County. — Hon. Emert C. Hilbert, Judge.

REVERSED AND CAUSE REMANDED.

Henderson & Deacy, Ben W. Swofford and Murrell & Murrell for appellant.

(1) The trial court should have given defendant's (appellant's) declaration of law No. 1 at the close of all of the evidence in the case, the same being in the nature of a demurrer to the evidence and in which the defendant (appellant) requested the court to declare that under the law and the evidence in the case the finding and judgment of the court must be for the defendant, as it was clearly shown and established by undisputed testimony that the loss to the assured fell within the exemption or exclusion clause in the contract of insurance in evidence exempting liability while the automobile described in said policy was being driven "by any person under the age fixed by law or fourteen (14) years in any event." Sec. 7783, R.S. Mo., 1929; United States Fid. & Guar. Co. v. Guenther, 281 U.S. 34, 72 A.L.R. 1064; Blanke-Baer Extract & Preserv. Co. v. Ocean Acci. & Guar. Corp., 96 S.W. (2d) 648; Maryland Cas. Co. v. Friedman, 45 F. (2d) 369; Morrison v. Royal Indem. Co., 167 N.Y.S. 732; Jones v. Am. Employers Ins. Co., 252 N.Y.S. 250; Weiss v. Preferred Acci. Ins. Co., 268 N.Y.S. 275; Zola v. Employer's Liability Assoc., Inc., 251 Ill. App. 197; Bradley v. Merchants Mutual Cas. Co., 6 Fed. Supp. 926; Hudak v. Union Indem. Co., 143 Atl. 885; Mitzner v. Fid. & Cas. Co., 154 N.E. 881; Cullen et al. v. Travelers Ins. Co., 253 N.W. 382; Basketeria Stores, Inc., v. Public Indem. Co., 168 S.E. 822; Phoenix Indem. Co. v. Barrett, 67 S.W. (2d) 135; Hunter v. Western & Southern Indem. Co., 92 S.W. (2d) 878; Witzko v. Koenig et al., 272 N.W. 864; Texas Indem. Co. v. McLelland, 80 S.W. (2d) 1101. (2) The court should have given defendant's declaration of law No. 2 in which the defendant (appellant) requested the court to find that under the law and the evidence plaintiff (respondent) could not recover penalties, damages, attorney's fees, or expenses by reason of the alleged vexatious refusal to pay the loss. There is abundant evidence in the record showing that the refusal was made in good faith and with reasonable cause, and under such circumstances any finding against the defendant (appellant) for damages, expenses and attorney's fees under the statute is unwarranted. The matter at issue was an open question of law and the defendant (appellant) acted in good faith and with reasonable cause in refusing to pay the alleged loss to plaintiff (respondent). Grand Lodge of United Brothers v. Massachusetts Bonding & Ins. Co. et al., 25 S.W. (2d) 783; Paetz v. London Guar. & Acc. Co., Ltd., of London, Eng., 71 S.W. (2d) 826; St. Clair v. Washington Fid. Nat. Ins. Co., 89 S.W. (2d) 85, l.c. 88; McDowell v. Washington Fid. Nat. Ins. Co., 23 S.W. (2d) 1071; McNabb v. Niagara Fire Ins. Co., 22 S.W. (2d) 364; Hampe v. Met. Life. Ins. Co., 21 S.W. (2d) 926; Bailey v. Am. Life & Acc. Ins. Co., 96 S.W. (2d) 903. (3) The facts in evidence being admitted by the pleadings and admissions in the trial of the cause and by evidence which corroborates the evidence of the opposite party are conceded and are not at issue. State ex rel. Fourcade v. Shain et al., 119 S.W. (2d) 788; Pandjiris v. Oliver Cadillac Co., 339 Mo. 726, 98 S.W. (2d) 978; Morris v. Equitable Assur. Soc. of the United States, 102 S.W. (2d) 569. (4) The policy insuring the owner against liability but providing that the insurer is not liable for loss or damage caused while the automobile was being driven by a person under sixteen years of age, does not cover the accident while the automobile was driven by one who was under the age of sixteen years. Giacomo v. State Farm Mut. Auto. Ins. Co., 280 N.W. 653; State Farm Mut. Auto. Ins. Co. v. Coughran, 82 L. Ed. 970, 303 U.S. 485; State Farm Mut. Auto. Ins. Co. v. Belshe, Ark., 112 S.W. (2d) 954; Holland Supply Corp. v. State Farm Mut. Auto. Ins. Co., 166 Va. 331, 186 S.E. 56.

Rieger & Rieger, Roland A. Zeigel and John Campbell for respondent.

(1) Assuming that the policy does not cover liability incurred if respondent's son was driving, nevertheless the defense based thereon being an affirmative one, it was necessary for appellant to prove the fact that said son was driving; and even if it produced evidence to that effect and that evidence was undisputed, such evidence presented a question of fact for the trial judge, sitting as trier of the fact. It was not necessary for the respondent in making his case to go further in his proof herein than he did, and the burden was then cast upon appellant to prove its affirmative defense. There was no evidence introduced by plaintiff herein showing that his son was driving the car. Appellant called respondent's son as its witness. The court could not, as a matter of law, say his evidence was true. So his testimony on this subject presented a disputed question of fact for the determination of the court sitting as a jury. There being a question of fact to be passed on, the court could not, as asked declare that the finding must be for the defendant. The same rule applies to a peremptory instruction to a jury that applies when the case is tried to the court sitting as a jury. Butler County v. Boatmen's Bank, 143 Mo. 13, 44 S.W. 1047. (2) If words are susceptible of the interpretation given them by the assured, although in fact interpreted otherwise by the insurer, the policy will be construed in favor of the assured. La Force v. The William City Fire Ins. Co., 43 Mo. App., 518, 530; Kimbrough v. National Protective Ins. Assn., 35 S.W. (2d) 654, 658; Katz v. Union Central Life Ins. Co., 44 S.W. (2d) 250, l.c. 252; Laupheimer v. Mass. Mut. Life Ins. Co., 24 S.W. (2d) 1059; Mathews v. Modern Woodmen, 139 S.W. 151. The policy provisions create an ambiguity which must be resolved in favor of the respondent. State ex rel. v. Trimble, 39 S.W. (2d) 355. (3) Before refusing to defend said suit, appellant was under the duty to and should have ascertained whether or not the son was "legally responsible" for the use of the car, as provided by the policy. This it failed to do. The proof warrants a holding that under the facts the insurer herein did not act in good faith, but unreasonably and wilfully closed its eyes to the policy in its entirety. The judgment is proper, and should stand, under the doctrine of res judicata. There was such privity between the parties, and opportunity for the appellant to defend the Hozelton suit, that the judgment in that suit should be binding here. State ex rel. v. City of St. Louis, 145 Mo. 551, 46 S.W. 981; State ex rel. Terry v. Holtcamp, 330 Mo. 608, 51 S.W. (2d) 13; Huselton v. Commerce Trust Co., 64 S.W. (2d) 757; Wors v. Tarlton, 95 S.W. (2d) 1199.

SHAIN, P.J.

The determination of the issues presented for this court in this cause involves, in final analysis, the construction of an assurance policy issued by the defendant to the plaintiff for a valuable consideration, and providing for indemnity to the plaintiff for liability for damages imposed on plaintiff resulting from an accident by reason of ownership, maintenance or use of plaintiff's automobile.

To the end of clarity of matters involved, we here set forth such parts of the contract as are involved in our review.

Under the coverage of said policy, liability for damages includes other drivers than the plaintiff owner, and as to same the following appears:

"ADDITIONAL BENEFITS UNDER COVERAGE."

"(1) Other Drivers Covered. The protection under above Coverages is extended to cover drivers as follows: The unqualified word `Assured' wherever used in above Coverages and in other parts of this Policy when applicable to these Coverages, includes not only the named Assured, but also any other person or organization while legally using the automobile, including also any other person or organization legally responsible for the use thereof, provided the disclosed and actual use of the automobile is `Pleasure and Business' as defined herein, and further provided that such use is with the permission of the named Assured who, if an individual, may give such permission through an adult member of his household other than a chauffeur or domestic servant."

Following the above, the following appears:

"(2) Investigation, Defense and First Aid. The Company further agrees: (a) To make such investigation, negotiation or settlement of any resulting claim, as it may deem expedient; (b) To defend, in his name and behalf, any suit against the assured seeking damages on account of such injury or destruction, even if such suit is groundless, false, or fraudulent; (c) To pay all costs taxed against the Assured in any such suit, all interest accruing after entry of judgment until the Company has paid, tendered or deposited in Court such part of such judgment as does not exceed the limit of the Company's liability thereof.

"GENERAL CONDITIONS.

"(1) Purposes of Use Defined. The term `Pleasure and Business' means personal, pleasure and family use including business calls.

"(3) The Company Shall Not Be Liable. Under Above Coverages while the automobile is being driven in a race or speed contest, or by any person under the age fixed by law, or fourteen (14) years in any event."

The facts and circumstances out of which this action arises are as follows: Margaret Hozelton, by her next friend, sued the respondent, W.O. Daniel, and his son, William, in the circuit court of Adair county, Missouri, on May 12, 1936, to recover damages for personal injuries sustained by the said plaintiff, Hozelton, while she was riding in an automobile which she alleged was being operated by said W.O. Daniel and his said son on April 25, 1936.

The petition in the Hozelton suit charged as follows:

"For cause of action pl...