Gooch v. Motors Ins. Co., 7666

• Decision Date: 29 April 1958
• Docket Number: No. 7666,7666
• Citation: 312 S.W.2d 605
• Parties: Thomas O. GOOCH, Plaintiff-Respondent, v. MOTORS INSURANCE CO., a Corporation, Defendant-Appellant.
• Court: Missouri Court of Appeals

Page 605

312 S.W.2d 605

Thomas O. GOOCH, Plaintiff-Respondent, v. MOTORS INSURANCE CO., a Corporation, Defendant-Appellant.

No. 7666.

Springfield Court of Appeals, Missouri.

April 29, 1958.

Dearing, Richeson & Weier, Samuel Richeson, of Hillsboro, for appellant.

Roy W. McGhee, Jr., Greenville, for respondent.

McDOWELL, Judge.

This is a suit on a fire insurance policy. Plaintiff recovered a judgment for $1,000 and defendant appealed.

The policy was issued by defendant-Motors Insurance Company, September 25, 1954, for a period ending March 25, 1957, in the sum of $4,150, on a new 1954 Buick automobile. The car was destroyed by fire February 23, 1955. Proof of loss was made and payment demanded. Defendant refused payment and this action followed.

The defense is material misrepresentations which defendant contends renders the policy void. It is alleged that plaintiff made false and fraudulent misrepresentations in two particulars. First, that in order to induce defendant to issue the policy, plaintiff falsely stated that he was over the age of 25 years when, in fact, he was 22 years of age; that if the true facts as to plaintiff's age had been known, no policy would have been issued and if, after an examination of the insured, a policy had been issued, the premium would have been $346.50 instead of $262.50, which fact was known to plaintiff at the time of the misrepresentation. Second, plaintiff falsely represented and warranted to the defendant in his application for the policy of insurance that he had traded in a 1950 Buick automobile of the value of $1,050 as a part of the purchase price, which representation and warranty were false and fraudulent, the true facts being that plaintiff's father had traded to the dealer a 1940 Buick automobile worth $50 so that the equity of the owner in the new automobile purchased was $1,000.00 less than represented by plaintiff to the defendant, and if defendant had known of the falsity of such statement, warranty and representation, it would have refused the policy.

The reply was a denial of the defenses set out in the answer and a special plea that if any facts were misstated on the application for insurance, such facts did not constitute a material representation but was an honest mistake on the part of plaintiff; that such misstatement of facts, if any, was known to the dealer-owner of the automobile involved in his capacity as agent in fact for defendant in taking the application for insurance and that defendant is bound by the agent's knowledge and acts in such transaction.

The following appears in the policy under 'Conditions'.

'3. The limit of the company's liability for loss shall not exceed the actual cash value of the automobile, or if the loss is of a part thereof the actual cash value of such part, at time of loss * * *.

'14. This policy shall be void if the insured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof or in case of any fraud, attempted fraud or false swearing by the insured touching any matter relating to this insurance or the subject thereof, whether before or after a loss.

'16. By acceptance of this policy the insured agrees that the statements in the declarations are his agreements and representations, that this policy is issued in reliance upon the truth of such representations and that this policy embodies all agreements existing between himself and the company or any of its agents relating to this insurance.'

Under declaration (6) in the policy the insured is covered as 'Class I'. By the terms of the policy for rating information contained on page 4, the policy provides: 'Applicable only when purpose of use is stated as 'Class I' or 'Class 3' in 'Declarations number 6. The automobile is classified for rating purposes Class 1 or Class 3 on the basis of statements made by or on behalf of the Named Insured.

'Class I Means (Individual Owners Only). (b) There is no operator of the automobile under 25 years of age resident in the Named Insured's household or employed as a chauffeur of the automobile.'

The evidence with respect to the purchase of the automobile is as follows: In September, 1957, plaintiff purchased a new 1954 Buick automobile from a dealer, Paul Johnson, in Piedmont, Missouri. At the time of the purchase plaintiff was 22 years of age. The stated purchase price was $4,150. The method of payment consisted of a trade-in 1940 model Buick valued at $1,050 plus $265 in cash, leaving an unpaid balance of $2,650, which amount, plus 30 months insurance and interest in the amount of $678.20, was financed through General Motors Acceptance Corporation. It was secured by chattel mortgage on the 1954 Buick, payable in monthly instalments of $110.44.

To secure the insurance policy sued on plaintiff made and signed a written customer's statement dated September 25, 1954. Paul Johnson, agent for Motors Insurance Corporation, defendant, prepared the statement on information received from plaintiff. The statement is in evidence as defendant's exhibit (1) and consists of two pages.

In this application, plaintiff's name is stated as Thomas O. Gooch; age 25; white; residence, Van Buren, Carter County, Missouri; home, U. S. Army. Just above plaintiff's signature, on page 1 of the exhibit, these words are written: 'Undersigned Warrants The Truth and Accuracy of Foregoing Information'. It is signed by Thomas O. Gooch and J. W. Gooch.

The second sheet of the exhibit, labeled 'Dealer's Work Sheet', is signed by 'Johnson Buick Sales, by Paul Johnson'. This part of the exhibit contains the following statement: 'Total down payment $1,050 trade-in, cash $265. Description of trade-in-Make, Buick, Model 4 dr., year 1950.' Plaintiff testified that Johnson filled out the application for insurance, asked him his age, etc., and that after it was filed in and completed, he signed it.

He testified he told Johnson his true age, 22 years, and, that the Buick automobile trade-in was a 1940 model. He admitted his age, as stated in the application, and the statement that the trade-in was a 1950 Buick automobile, were wrong but he stated Johnson knew the true facts and that he signed the statements, without reading them.

There is no dispute that the 1940 Buick trade-in had been given plaintiff by his father, who was a second-hand car dealer and had purchased the car in St. Louis, some two months before. The father testified the purchase price was somewhere between $150 and $250 but he did not remember. The title to this car was transferred to the buyer on the date of trade. It is, likewise, admitted that plaintiff never secured a Missouri license for the 1954 Buick but operated it on the license obtained for the trade-in 1940 Buick. The possession of the 1954 Buick was in plaintiff's father at all times after plaintiff was discharged from the Army in December, 1954. The car was involved in a wreck and badly damaged prior to February, when it was totally destroyed by fire. Claim had been made for the damages prior to the fire on the insurance policy but not settled.

Plaintiff testified that the 1940 Buick automobile was not worth $1,050, at the time of the trade, to him, but, he said he did not know what others would pay for it.

Paul Johnson testified for plaintiff that he was the dealer who sold the 1954 Buick automobile to plaintiff. He said he could not testify whether the application was filled out by him or his secretary but that the papers were always filled out before the customer signed them. He gave this testimony:

'Q. You remember they were filled out prior to the time they were signed? A. They sure were.'

As to plaintiff's age as shown in the Customer's Statement, Johnson gave this testimony:

'Q. Now you told Mr. McGhee you didn't recall what Mr. Thomas O. Gooch told you about his age Mr. Johnson, I will show you defendant's exhibit No. 1, which is the customers statement, and point out to you here, age 25, did you or your secretary fill in that age? A. Yes, sir.

'Q. Did you put in the age Mr. Gooch told you at that time? A. We put in the exact age.

'Q. It was your intention then to place in this customers statement the age given you by Mr. Thomas O. Gooch at the time it was filled out? A. The insurance was figured on that.

'Q. Are you aware of the ruling and requirement that drivers under 25 years of age take a higher rate of insurance than 25 or over? A. Yes, sir.'

We think the facts are undisputed that the premium for an applicant 25 years of age or over was $262.50, which amount was charged for the policy in issue. Had the age been properly stated, 22 years, the premium would have been $346.50, had a policy been issued.

At the time of trial Johnson had paid General Motors the indebtedness due on the 1954 car. At that time pl...