Farmers Mut. Fire and Lightning Ass'n v. La Vallee
| Decision Date | 01 October 1973 |
| Docket Number | No. KCD,KCD |
| Citation | 501 S.W.2d 69 |
| Parties | FARMERS MUTUAL FIRE AND LIGHTNING ASSOCIATION, Plaintiff-Appellant, v. Faye La VALLEE and Farmers Bank, Stover, Missouri, Defendants-Respondents. 26213. |
| Court | Missouri Court of Appeals |
W. R. Schelp, Bradley, Skelton & Schelp, Lexington, for plaintiff-appellant.
William F. Brown, Sedalia, for defendants-respondents.
Before SHANGLER, P.J., and SWOFFORD and WASSERSTROM, JJ.
This is an appeal from a judgment in a suit for declaratory judgment filed by the appellant insurance company wherein it asked for a declaration of its rights and obligations under a certain policy of fire insurance insuring the dwelling and other outbuildings of the respondent La Vallee, with a loss payable clause to the defendant Farmers Bank of Stover, Missouri, the holder of a mortgage on said property. The appellant's petition requested, in the alternative, that the court declare either: 1) it was not liable to insured in any amount under said policy, or 2) it was liable only for its pro rata share with other existing insurance for a fire loss which had occurred to said property. In the proceedings below, the court declared and determined the issues, as follows:
'That the insurance policy insuring the property as provided in the contract of insurance was neither void or suspended at the time of the loss, but in full force and effect, however, plaintiff is found liable only for its pro-rata share of the loss suffered by defendant Faye La Vallee. * * *'
The court thus adopted the second alternative proposed by the insurer. It was from this declaration of pro rata liability that the insurance company has appealed. We affirm.
The facts pertinent to the decision of this matter are as follows:
The respondent, Faye La Vallee, was the owner of property outside of Stover, Missouri on which there was a dwelling and certain other improvements, upon which the Farmers Bank of Stover held a first mortgage. The property was insured against loss by fire with the Fireman's Insurance Company of Newark, New Jersey, which policy had been written by an agent for said company who was also an officer of the Farmers Bank and contained a standard mortgage clause to the Farmers Bank as mortgagee. The amount of this insurance is not shown and is not of importance in this appeal.
Seeking a lower premium, La Vallee contacted Marcus Orens, Secretary-Treasurer of the Farmers Mutual Fire and Lightning Insurance Company of Stover, Missouri and in response to this inquiry one Larry Ehlert, an agent for such company, called upon her on October 15, 1970. During the course of this interview Mr. Ehlert took an application for insurance from Mrs. La Vallee.
This application consists of a single sheet of printed form with spaces for the recording of information. The front thereof contains spaces for the name and address of the applicant, the term of the insurance (shown on the La Vallee application as from October 15, 1970 to October 15, 1975), the amount and details of coverage, the description of the property to be insured, and a space for the signature of the applicant. On the reverse side of the application are additional printed questions and spaces for answers but it does not contain any space requiring applicant's signature.
This record discloses that the agent Ehlert filled in part of the information required on the front of the application in pencil and Mrs. La Vallee signed on the line designated for applicant's signature. Other items of information on the front were later completed in ink by Mr. Orens when the application was delivered to him in his capacity as executive officer and underwriter for the appellant.
The pertinent parts of the back of the application appear as follows:
'Each of the Following Questions Must Be Answered in Full by the Applicant.
($2787.90 amount of mortgage) 1'
The premium on this 5-year contract was to be payable by means of 5 annual premiums and the agent told Mrs. La Vallee that she would have 30 days in which to pay the first year's premium.
The policy was issued by the appellant on October 17, 1970 and delivered to Mrs. La Vallee. The policy provisions here involved are couched in the following language:
'Conditions suspending or restricting insurance. Unless otherwise provided in writing added hereto this company shall not be liable for loss occurring:--
Other insurance.--(d) while the insured shall have any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy.'
relied upon by appellant as the basis of its claim that it has no liability, and
which the respondent relies upon to assert the claim that appellant is responsible pro rata with Fireman's Insurance Company of Newark--a position which the court adopted in its declaratory judgment.
On October 28, 1970, a fire loss occurred to the insured property, respondent La Vallee reported the loss orally to the appellant and both Ehlert, the agent, and Orens, the executive of the appellant, undertook to investigate. It was only then that the appellant asserts it learned for the first time that other insurance was in force upon the property. It proffered a proof of loss to La Vallee in which it sought her agreement that nothing was due under the policy; she refused to execute this and thereafter under date of November 3, 1970, within the 30 days from the date of the policy, she sent a money order to appellant to cover the first year's premium. The company did not accept this premium but tendered its return by averment and by attaching the money order to its petition for declaratory judgment herein, filed December 29, 1970. It would seem to be highly pertinent here to note that Orens, the executive officer in charge of the underwriting procedures of the appellant, frankly stated in his testimony that the company never did actually deny liability on its policy.
The real decisional focus of this case involves the credibility to be accorded the testimony of two witnesses and inferences to be legitimately drawn therefrom upon the single point demonstrated below. The hard evidence on this point is sharply in conflict.
The plaintiff insurance company before trial made a Request for Admissions upon the defendant, La Vallee, one of which was the following:
'1(c) That the questions shown on the back side of said application were asked of you by the agent of Farmers Mutual Fire and Lightning Association and the Answers shown to such questions accurately represent your answers given to said agent at the time the application was completed.'
In answer to this request, the defendant Faye La Vallee stated:
'This defendant specifically denies the statement in Paragraph 1c for the reason that this defendant was never shown the answer as the same appears and on the contrary has no knowledge, and had no knowledge of the existence of the condition referred to in Paragraph 1c prior to the filing of this action by plaintiff.'
The sales agent, Ehlert, on the one hand, testified that (although he had worked only two months in the insurance business) he asked and obtained answers from La Vallee to each specific question on the front and back of the application and specifically testified:
'Q O.K. And in Question No. 3 would you please read the question as it appears there on the back side of Plaintiff's Exhibit No. 1?
A 'Insurance: Have you any other fire insurance on any of the property herein described?'
Q And did you ask Mrs. La Vallee that particular question?
A Yes.
Q And what was the answer that she gave you on October 15?
A No.
Q And is that the answer that you recorded on the application form?
A Yes.'
On the other hand, respondent La Vallee testified:
'Q Tell the Court what happened out there.
A Mr. Ehlert came out there and he wrote up the policy. He did not ask me if I had another policy * * * I was not asked, absolutely not, if I had another policy.
Q I am directing your attention to the reverse side (of application) * * * and ask you if you have ever seen that before?
A No, sir, all--not the back at all. The front I seen that because that is my signature in red ink.
Q Did he (Ehlert) show you the back?
A No.
Q Did he ever ask you the questions that is (sic) on the back?
A What is on the back? No, sir.
Q He did not ask you if you had any or additional insurance, is that correct?
A No, sir.'
Insurer does not claim the policy was void but merely 'suspended' during the period that the Fireman's insurance was in force. Mrs. La Vallee had testified that she intended to cancel the Fireman's policy but due to the illness of her husband had not done so. The following colloquy appears:
The appellant's only point upon appeal is stated in the following terms:
'The Trial Court Erred in Its Finding in Favor of Defendant For the Reason That There Was a Stipulation of Fact That Defendant Did Have Other Insurance on Property Covered in Whole or in Part by Appellant's Insurance Contract, and That Appellant Had No Knowledge of Said Other Insurance Until After the Alleged Fire Loss, and That the Judgment of the Trial Court Renders the 'Other Insurance...
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