H & H Mfg. Co. v. Cimarron Ins. Co.

• Decision Date: 09 May 1957
• Docket Number: No. 7588,7588
• Citation: 302 S.W.2d 39
• Court: Missouri Court of Appeals
• Parties: H & H MANUFACTURING COMPANY, a corporation, Plaintiff-Appellant, v. CIMARRON INSURANCE COMPANY, Defendant-Respondent.

Page 39

302 S.W.2d 39

H & H MANUFACTURING COMPANY, a corporation, Plaintiff-Appellant, v. CIMARRON INSURANCE COMPANY, Defendant-Respondent.

No. 7588.

Springfield Court of Appeals, Missouri.

May 9, 1957.

Ray E. Watson, Watson & Tudor, Joplin, for plaintiff-appellant.

Herbert Van Fleet, Joplin, for defendant-respondent.

RUARK, Judge.

In the suit for recovery under a policy of fire insurance a jury was waived, and plaintiff appeals from an adverse judgment of the trial court.

The policy, for which no written application was made, was issued to plaintiff on April 3, 1952, insuring for the sum of $1,500 and for a term of three years the contents of a 'One story Composition roof Concrete Block building * * * occupied as a Furniture Manufacture and repair situated 1220 West 13th Street.' Following this description of the property insured appears the following: 'Note--For information only.--The property covered under this item consists principally of Machinery and Spraying equipment and is located on the First floor of the building described in this policy.'

The plaintiff corporation is engaged in the manufacture and repair of furniture. The 'main building' used in this business is described as a one-story concrete block structure 100 by 150 feet with composition roof. Immediately west and six feet to the rear of this building, but on the same tract of ground, is a separate much smaller building known as the 'paint shop.' This paint shop is also single-story, of concrete block construction, 30 by 40 feet, with steel sash windows and wooden type roof. The principal manufacturing and repair operation is carried on in the 'main building.' The smaller building is, as plaintiff's witness said, used 'strictly' as a paint shop. The main building contained machinery but no spraying equipment and, conversely, the paint shop contained spraying equipment but no machinery or other equipment.

On April 13, 1953, a fire occurred in the paint shop, and it is admitted that plaintiff suffered damage to contents in the amount of $1,354.28. Plaintiff sued for recovery of its loss and the insurer defended on the ground that its policy did not insure the contents of the paint shop but, instead, insured the contents of the main building; and such issue is the sole question for determination here.

The policy in question was procured from the defendant's authorized issuing agent (one Einsel) by W. B. (Doc) Hardin, who was an insurance broker, a friend of the officers of the plaintiff corporation, and who handled some of the plaintiff's insurance business. According to plaintiff's manager and secretary-treasurer, Harshberger, who was plaintiff's only witness, plaintiff had built the separate paint shop on the advice of broker Hardin, for the reason that if painting were done in the main building insurance rates would be increased so as to become prohibitive. Hardin was familiar with the location of plaintiff's buildings and had many times discussed with Harshberger matters concerning insurance on such property. Defendant produced the man in charge of its fire and windstorm claims department, who testified that by the records of the company W. B. Hardin was not an agent authorized to issue policies for such company. Einsel, defendant's issuing agent, testified that Hardin 'brokered' business but did not write policies; that he maintained his own separate office, did not have a desk in Einsel's office, but was 'in and out'; that Hardin would bring Einsel applications for insurance and that Einsel would write the policies and send them out by him; that Hardin also had policies issued by other agents and other companies.

Concerning the issuance of the policy in question, plaintiff's Harshberger testified that prior to its issuance he and Joe Harding, president of the plaintiff corporation, had a conversation with Hardin. They decided that insurance coverage on contents should be increased and, because there was no insurance at all on the paint shop, they at that time ordered from Hardin a policy to insure the contents of the paint shop. The witness said they 'didn't specify any company, just said we wanted $1500 insurance'; that they did not give Hardin a description of the building in which the contents were located, but 'the only thing I had to do was just tell him it was our paint shop we wanted covered.' Thereafter Hardin procured the policy and delivered it to Harshberger. Harshberger said he knew the rate was supposed to be higher on the paint shop than on the main building, but that he did not ever examine this policy to check the rates or description of the property insured, but testified that 'I placed my faith in Doc Hardin.'

Harshberger also testified that at the time of the loss plaintiff had policies of insurance issued by three different insurance companies on the contents of the main building in total amount of $13,500, that the premises in those policies were described as a one-story concrete block composition roof building located at 1220 West 13th Street, and that such description was the same as that in the policy in question except that these other policies did not refer to spraying equipment.

Defendant's agent, Einsel, said he also was familiar with plaintiff's premises, having previously been there to discuss insurance with Harshberger and other officers of the plaintiff corporation (although he had no policies of insurance with plaintiff prior to the issuance of the policy in question). He also had advised plaintiff's officers to build a separate paint shop because the use of paint and spray equipment in the main building would raise the rate and might make it completely unacceptable as an insurance risk. He testified that at that time there was some conversation about insurance on the paint shop, and plaintiff's manager, Harshberger, 'said it was too high, they wouldn't carry it. They wouldn't have to carry it, it wouldn't be enough.' He testified that a Missouri Inspection Bureau rate card was (by the time the policy in question was written) issued for plaintiff's property. This card designated the main building as 1220 West 13th Street and fixed a rate of 2.02, and a spray room as rear 1222 West 13th Street, with a rate of 2.48. He stated he would not have written a policy on the paint shop.

In regard to the issuance of the policy in question, Einsel testified that the broker Hardin called him on the phone, said plaintiff had some extra equipment, and ordered a policy in the amount of $1,500. He said that Hardin 'didn't specify paint shop. * * * He specified building. The contents of the main building.' For the purpose of determining the premium Einsel used the rate 2.02, the rate fixed by the Missouri Inspection Bureau for the main building. The policy was typed in Einsel's office, and he did not discuss it with any of plaintiff's officers but dealt with Hardin only. Hardin (who incidentally was not called as a witness by either party) collected the policy premium and paid Einsel.

In cases (like this) tried by the court sitting as a jury, our duty is to review the law and evidence, as in equity, and reach our own conclusions. In so doing, however, we...