Emmco Ins. Co. v. Indiana Farmers Mut. Ins. Co.

Decision Date01 June 1972
Docket NumberNo. 1,No. 671A115,671A115,1
Citation152 Ind.App. 212,283 N.E.2d 404
CourtIndiana Appellate Court

Kunz & Kunz, Indianapolis, for plaintiff-appellant.

Charles T. Bate, Soshnick & Bate, Shelbyville, of counsel, for defendant-appellee.

ROBERTSON, Presiding Judge.

The Associates Investment Company made application to Emmco Insurance Company (Emmco) for a policy of insurance which, in part, reads:

'Application is hereby made to Emmco Insurance Company, . . . for a master open mobile agricultural floater policy of insurance to cover risks of direct physical loss or damage to property, consisting of . . . mobile agricultural machinery and equipment . . . which becomes the collateral for obligations of indebtedness owing to the applicant . . ..'

The policy was issued to Associates Investment Company. Associates is referred to in the policy as the 'insured'. Two pertinent items of the Emmco policy state that the only protected interest is that of the insured (Associates Investment Company) and the premium is to be computed on the basis of total gross unpaid time balances due to the insured on the last business day of the month.

Subsequent to the issuance of the Emmco policy to the Associates Investment Company, the Halls purchased a combine. The stipulated evidence regarding the transaction between the Halls and Mr. Stohler, the implement dealer, states that:

'On September 10, 1964, Arthur J. Hall, Jr., Elizabeth Hall purchased a 1964 Allis-Chalmers C--11 Gleaner from Stohler Implement Sales and by and through the assistance of your affiant (Stohler), financed said 'gleaner' with Associates Investment Company; that your affiant told Arthur J. Hall and Elizabeth Hall that your affiant could not finance the 'gleaner' through Associates Investment Company without also writing the insurance on said 'gleaner', which Halls agreed for me to do; that your affiant was an authorized representative of Associates Investment Company for the securing of financing and insurance in connection with the sales of implements, equipment and vehicles.'

A month later, the Halls increased the insurance coverage on their farm equipment from $10,000 to $40,000 under the provisions of a policy heretofore issued by the Indiana Farmers Mutual Insurance Company (Indiana) and under which the Halls were the named insureds. On the 4th of January, 1966, the combine was destroyed by fire.

Emmco made payment to Associates Investment Company by means of a check made payable to the Halls and the Associates Investment Company, and secured an executed 'Amount of Damage Agreement' from the Halls which affirmed that Associates Investment Company, under the Emmco policy, was the 'only insured and the party whose interests in that property are protected exclusively thereunder.'

Emmco made demand upon Indiana to pay the loss under the policy the Halls purchased from Indiana. Indiana refused. Emmco filed suit, and the entire case was tried by the court under a stipulation of facts.

It should be noted at this point the Indiana policy contained a 'no insurance' clause which provided for a suspension of their insurance if other insurance covered the same property. Indiana's policy did allow other insurance if their written consent was obtained. The Halls failed to do this. Emmco's policy contained a clause which would require it to be treated as excess insurance in the event other coverage existed on the same property.

The trial court found that Indiana was not required to pay, with Emmco taking this appeal.

Emmco complains of four errors: (1) The court's decision is contrary to the evidence; (2) the court's decision is contrary to the law; (3) the court's decision is not supported by sufficient evidence upon all of the necessary elements of the defense raised; and, (4) an uncorrected error of law committed by the court.

Emmco has chosen, via its brief, to state the problem thusly:

'The problem is, given the two policies, which had the primary coverage. Indiana Farmers Mutual had the primary coverage because it (1) was an escape clause policy vis a vis an excess clause; (2) it was issued first in time; (3) it afforded specific coverage in contrast to Emmco's floater coverage; (4) both policies can only be given consistent meaning by so holding.'

The fallacy of Emmco's concept of the problem is a mistaken reliance upon the identity of the insurable interests represented by the two policies involved in the case, albeit, the identity of the property and risk insured does coincide.

The general rule of law states that before there can be contribution between insurers they must have insured the same risk and the same interest. 44 Am.Jur.2d p. 744, Insurance § 1819 and 46 C.J.S. Insurance § 1207, pp. 150, 151. In a reading of the policies here involved, it is manifestly apparent that the interests insured are distinctly different. The entire thrust of the Emmco policy is exclusively and solely directed to the protection of the unpaid amount of loans made by the Associates Investment Company. The Halls confirmed this contention by affirmatively acknowledging Associates Investment Company's sole interest in the Emmco policy by their execution of the Amount of Damage Agreement heretofore referred to.

'It is, or course, the rule that where more than one policy of insurance covers a certain risk, the insurance companies shall contribute a proportionate part of the loss. However, in the case at bar, the two insurance companies insured separate and distinct interests in the same property and plaintiff is not entitled to have the loss prorated.' Lititz Mutual Insurance Co. v. Lengacher (7th Cir. 1957), 248 F.2d 850, at p. 854.

We are of the opinion that the Lititz case, supra, is also dispositive of Emmco's argument that it was the property insured, not the interest, which may require contribution.

It is axiomatic, noting the separate and distinct interests insured by the respective policies, that the excess clause versus the escape clause, primary as opposed to secondary coverage, and the no insurance clause questions do not come into focus as requisite issues to the determination of this appeal.

An ancillary question raised by Emmco revolves about Indiana injecting a new defense in their post-trial briefs. The defense was based upon a clause in the Indiana policy establishing a twelve month limitation on bringing actions against the company. Since the court rendered a general verdict only we are at a loss to determine what part, if any, the issue was relied upon by the court in making the decision. The same reasoning must be applied to the objection of the trial judge raising the question, sua sponte, as to whether Emmco acted as a mere volunteer. Emmco's payment to Associates was in accord with its contractual obligation therefore they could not stand as a volunteer in this case. Since we find the trial court made a proper determination as reflected by the judgment, we cannot say that harmful error existed on these questions.

Emmco raised still another contention that the trial court committed error in failing to grant Emmco a summary judgment after denying Indiana's motion for a summary judgment. We are of the opinion that the error, if it was error, is not fatal. First, TR. 56, IC 1971, 34--5--1--1, allows a summary judgment if appropriate. Emmco makes no showing that it would have been appropriate as a matter of law. Secondly, in view of the decision reached by this court, the outcome of the case has not been changed. The error of denying summary judgment, if error, would be harmless as defined by TR. 61, IC 1971, 34--5--1--1.

It should be remembered that this case was decided by the trial court upon a submission of stipulated facts and certain documentary exhibits.

'* * * where the evidence is entirely based on stipulations, the Appellate Tribunal is in as good a position as the trial court to determine its force and effect.' (Citing authorities) Gorby et al. v. McEndarfer (1963), 135 Ind.App. 74, at 80, 81, 191 N.E.2d 786, at 790.

In addition:

'It is only where the evidence is without conflict and can lead to but one conclusion, and the trial court has reached an opposite conclusion, that the decision of the trial court will be set aside on the ground that it is contrary to law.' Pokraka v. Lummus Co. (1952), 230 Ind. 523, at p. 532, 104 N.E.2d 669, at p. 673.

The judgment of the trial court is affirmed.

LYBROOK, J., concurs.

LOWDERMILK, J., dissents with opinion.

LOWDERMILK, Judge (dissenting).

I must dissent from the majority opinion of my able colleagues.

In dissenting I find it necessary to go into the matter at great length, although the same is unusual in a dissenting opinion.

This action was commenced by plaintiff-appellant's filing its complaint; it later filed an amended complaint to which defendant-appellee filed answer in general denial. No affirmative defense or defenses were pleaded. Defendant-appellee filed a motion for summary judgment on the grounds its insured, the Halls, had another contract of insurance and defendant-appellee's coverage was thereby excluded. Later the plaintiff-appellant filed a brief in opposition to the motion for summary judgment and asked for a summary judgment in its favor. The trial court, sua sponte, raised the issue of whether plaintiff-appellant was a 'mere volunteer,' although the defendant-appellee admitted in its answer that Emmco had paid to '. . . Associates Discount Corporation, Arthur J. Hall, Jr., and Elizabeth J. Hall the amount of $12,000.00 in accordance with the requirements of plaintiff's policy of insurance.'

Summary judgment was denied to the defendant-appellee, but the court failed to grant summary judgment in favor of the plaintiff-appellant. Thereafter, the cause was submitted upon stipulated facts, after which the court entered judgment in favor...

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