Handleman v. U.S. Fidelity & Guar. Co.

• Decision Date: 21 June 1929
• Citation: 18 S.W.2d 532,223 Mo.App. 758
• Parties: JULIUS HANDLEMAN, DOING BUSINESS AS THE IMPROVED SPONGING AND EXAMINING COMPANY, RESPONDENT, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, APPELLANT. [*]
• Court: Missouri Court of Appeals

18 S.W.2d 532

223 Mo.App. 758

JULIUS HANDLEMAN, DOING BUSINESS AS THE IMPROVED SPONGING AND EXAMINING COMPANY, RESPONDENT, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, APPELLANT. ^[*]

Court of Appeals of Missouri, St. Louis

June 21, 1929

Appeal from the Circuit Court of the City of St. Louis--Hon. Claude O. Pearcy, Judge.

REVERSED AND REMANDED.

Judgment reversed and remanded.

Casper S. Yost, Jr., and Hensley, Allen & Marsalek for appellant.

(1) The court should have sustained defendant's demurrers to the evidence. 1. The policy sued on was issued and accepted subject to the express provision that it should cover and apply only after the prior $ 3000 policy was exhausted in the payment of claims to the full amount of the expressed limits thereof. These provisions are plain and unambiguous, and must be enforced as written. State ex rel. v. Trimble, 297 Mo. 659; State ex rel. v. Ellison, 269 Mo. 410; Mitchell v. Accident Co., 179 Mo.App. 7. 2. The statutes (R. S. Mo. 1919, secs, 6142, 6233-4) governing representations and warranties, have no application to policies of burglary insurance. Park v. Fidelity & Casualty Co., 279 S.W. 246; State ex rel. Park v Daues, 316 Mo. 346. 3. In the absence of a statute affecting the question, the character and effect of the above provision must be determined by the common-law rule, which requires exact and literal compliance with such provision by the assured as a condition of defendant's liability under the policy. Mers v. Insurance Co., 68 Mo. 127; Hutchinson v. Insurance Co., 21 Mo. 97; Loehner v. Insurance Co., 17 Mo. 255; Hoover v. Insurance Co., 93 Mo.App. 111; Marcus v. Insurance Co., 187 Mo.App. 134; Brooks v. Insurance Co., 11 Mo.App 351; Campbell v. Ins. Co., 98 Mass. 381; Kyte v Assurance Co., 149 Mass. 116; Imperial Fire Insurance Co. v. Coos County, 151 U.S. 463. 4. A provision in a policy, requiring that other insurance must be exhausted before liability accrues, is legal and enforceable and defeats an action on such policy until the condition is fulfilled. Wilson Co. v. Hartford Fire Ins. Co., 300 Mo. 54; Wolf v. Hartford Fire Ins. Co., 219 Mo.App. 307. (2) The court erred in giving plaintiff's instruction No. 1. The instruction ignores the provisions of the policy, in authorizing a verdict for plaintiff upon the mere finding that the value of the goods stolen exceeded three thousand dollars. Authorities, point 1, supra. The court erred in giving plaintiff's instruction No. 4. The instruction ignores the provisions of the policy, in telling the jury that plaintiff was entitled to recover if he suffered a loss in excess of three thousand dollars, notwithstanding the fact that he settled with the other company for less than that sum. Authorities, point 1, supra. (4) The court erred in excluding from the evidence the plaintiff's release of his claim against the Fidelity and Deposit Company. The release was proper and competent evidence to show, with the other facts in evidence, that plaintiff had not exhausted the prior policy. Authorities, point 1, supra. (5) The court erroneously instructed the jury to allow plaintiff interest from the date the suit was filed. Even if the settlement with the Fidelity and Deposit Company satisfied the condition of the defendant's policy (which we by no means concede), the plaintiff was not entitled to interest from the date the suit was filed, but only from the date of such settlement. Conqueror, etc., Co. v. Insurance Co., 152 Mo.App. 332; Century Realty Co. v. Insurance Co., 179 Mo.App. 123. (6) The award of damages and attorneys' fees is without support in the evidence. 1. It is admitted that the insured demanded and sued for more than he was entitled to, and under such circumstances, he cannot recover damages and attorneys' fees because the defendant rejected his demand. Glover v. Insurance Co., 193 Mo.App. 491-2; Kahn v. Insurance Co., 187 Mo.App. 219, 220; Fager v. Insurance Co., 189 Mo.App. 464. 2. It is also conceded that, at the time when the demand was made and the suit was filed, the provision requiring that the Fidelity and Deposit Company's policy be exhausted in the payment of claims was wholly unperformed. Even if the settlement thereafter occurring constituted a substantial compliance with this provision (which we by no means concede) the defendant cannot be penalized for refusing to pay the claim before that time. Authorities, point 5, supra. 3. The record gives rise to questions of the most serious character, both as to defendant's liability under the policy and the time when (if ever) it accrued. No penalty can be assessed against defendant for contesting the suit, under such circumstances. Non-Royalty Shoe Co. v. Assurance Co., 277 Mo. 399; Patterson v. Insurance Co., 174 Mo.App. 44; Keller v. Insurance Co., 198 Mo. 440; Mound City, etc., Co. v. Insurance Co. (Mo. App.), 277 S.W. 349.

L. B. Sher and Abbott, Fauntleroy, Cullen & Edwards for respondent.

(1) The holder of a primary policy of insurance containing a clause similar to the one in the case at bar may compromise his claim and accept less than the face value of the policy without affecting its right to recover for the excess over and above the amount of the policy owed by the other company. Zeig v. Massachusetts Bonding & Ins. Co., 23 F.2d 665. (2) Liability of each company must be determined from the provisions of the policy without reference to compromise payments of other companies. Goodwin v. Merchants, etc., Ins. Co., 92 N.W. 894; Buse v. Nat'l Ben Franklin Ins. Co., 160 N.Y.S. 566; Georgia Co-op. Fire Ass'n v. Harris, 52 S.E. 88; Kansas City Paper Box Co. v. Am. Fire Ins. Co., 100 Mo.App. 691; Austin v. Dixie Fire Ins. Co., 112 N.E. 382.

BECKER, J. Haid, P. J., and Nipper, J., concur.

OPINION

BECKER, J.

Plaintiff's action is based upon a policy of burglary insurance issued by defendant company. The trial resulted in a verdict and judgment in plaintiff's favor for $ 1224.91, the full amount set up in plaintiff's petition as plaintiff's loss under the policy, $ 557.31 interest, one dollar damages for vexations delay, and $ 300 as attorneys' fees, making a total of $ 2083.22. After unavailing motion for new trial defendant appeals.

Plaintiff conducted a business of sponging and measuring cloth for manufacturers. The character of the business was such that at all times he had on hand bolts of goods belonging to various customers and he carried insurance against the theft thereof, being insured in the sum of $ 3000 under policy issued by the Fidelity & Deposit Company of Maryland, and a policy of the defendant for "excess and not contributing insurance" in the sum of $ 7000 for loss by burglary, which said policy is the one herein sued on and carries the following endorsements which are the subject of consideration of this appeal.

"In consideration of the reduced premium charged for the policy to which this endorsement is attached, such policy is issued and accepted:

"1. As excess and not contributing insurance and shall apply and cover only after all other insurance herein referred to shall have been exhausted in the payment of claims to the full amount of the expressed limits of such other insurance.

"2. Upon the further condition, that, if the assured shall fail to carry other insurance against loss or damage of the kind covered hereby in the amount of at least three thousand dollars ($ 3000) at all times, while the policy to which this endorsement is attached is in force, then the insurance hereunder shall be null and void: . . ."

On June 5, 1920, when both mentioned policies were in effect, plaintiff suffered a loss by burglary in the alleged sum of $ 4224.91. It is admitted that plaintiff notified defendant in this case of his alleged loss in the sum of $ 4269.89, and demanded of defendant $ 1269.89, and that the defendant refused to pay. As to the policy issued by the Fidelity & Deposit Company of Maryland, all that appears from the record in this case is that plaintiff, on cross-examination, admitted that a photostatic copy of an alleged original receipt produced at the trial by the defendant was a correct copy of the receipt executed by plaintiff at the time plaintiff settled his suit against the Fidelity & Deposit Company of Maryland, and that the date on which plaintiff settled his said suit was June 10, 1927. However when defendant later on offered the receipt in evidence, the objection of counsel for defendant to its introduction was sustained, so that the basis of the suit on the terms of the settlement made by plaintiff with the Fidelity & Deposit Company of Maryland nowhere appears. In other words, this record is barren of any evidence as to whether or not the insurance held by plaintiff in the Fidelity & Deposit Company of Maryland had "been exhausted in the payment of claims to the full amount of the expressed limits thereof."

In this state of the record it is here argued that the action of the trial court in overruling defendant's demurrer offered at the close of the case is error prejudicial to the rights of the defendant. In support of this contention appellant argues that since plaintiff failed to prove that the said policy issued by the Fidelity & Deposit Company of Maryland had been "exhausted in the payment of claims to the full amount of the expressed limits" thereof, plaintiff failed to make out a case showing any liability under the terms of the policy of defendant herein sued on. After due consideration we have concluded the point is well taken.

It is our view, and we so rule, that under the terms of the policy, the burden of proof was on plaintiff to show that insurance in the Fidelity & Deposit Company of Maryland had been "exhausted in the payment of claims to the full amount" $ 3000 "the expressed limits" thereof,...