Hartford Fire Ins. Co. v. Associates Capital Corp.
| Decision Date | 25 May 1975 |
| Docket Number | No. 48093,48093 |
| Citation | 313 So.2d 404 |
| Parties | HARTFORD FIRE INSURANCE COMPANY v. ASSOCIATES CAPITAL CORPORATION. |
| Court | Mississippi Supreme Court |
Watkins & Eager, Jackson, for appellant.
Thomas W. Sanford, Jackson, for appellee.
Before RODGERS, INZER and WALKER, JJ.
The appellee, Associates Capital Corporation, filed suit against the Hartford Fire Insurance Company upon an insurance contract issued to Wayne Stone in which the plaintiff was named mortgagee. The Circuit Court of the First Judicial District of Hinds County transferred the case to the Chancery Court of the First Judicial District of Hinds County on the motion of the defendant, and Wayne Stone was added as a necessary party defendant in the bill of complaint filed in the chancery court. An amended bill of complaint was filed so as to correct the name of the plaintiff in the policy. A stipulation was filed by the defendant insurance company in which it was agreed that the 'loss-payable clause' should have been attached, wherein it was stated that the loss was payable 'to Associates Capital Corporation as interest may appear, subject, however, to all the terms and conditions of this policy.'
The insurance company filed its answer in which it denied liability under the terms of the policy and the stipulation because it contended that the insured Wayne Stone had the property destroyed by fire, and that since he concealed this fact and other facts from the insurance company, he could not recover under the terms of the policy and under the terms of the stipulation, and thus, the 'loss payee' could not recover. Interrogatories were propounded and answers filed by the parties, including interrogatories to Wayne Stone. Mr. Stone filed a disclaimer to the proceeds of the policy, but alleged that the Associates Capital Corporation was entitled to the proceeds as 'loss payee.' The complainant moved the court for permission to withdraw the stipulation as to the 'loss payee' form added to the original policy, and, after a hearing on the objection filed by the insurance company, the chancellor permitted the complainant to withdraw the stipulation and to file a second amended bill of complaint 'to correct deficiencies' in the previous bill of complaint.
The insurance company answered the second amended bill of complaint and alleged that the insured Wayne Stone caused the insured property to be destroyed by fire, and that he concealed these facts from the insurance company; and, therefore, under the terms of the policy, the insurance company was not liable. The insurance company made its answer a crossbill and requested the court to reform the insurance policy so as to make the policy cover 'the holder of a lien on personal property.' The complainant filed an answer to the affirmative matter set out in the answer, so as to deny that the policy should be reformed to show the 'loss-payable clause' sought to be made a part of the insurance policy. The complainant also filed an answer to the cross-bill essentially denying the claim of the insurance company to reform the insurance policy. The insurance company finally amended its answer to claim that the insured concealed certain facts of arson in an oral examination after suit was filed.
Deposition of Billy Lee Koonce, the insurance agent who issued the policy, was taken to indicate his intention to add the 'loss-payable clause' to the policy issued.
The case was called for trial on May 24, 1973, during a regular term of court, at which time witnesses for the complainant and defendant were duly sworn and interrogated. The insurance company amended its answer to allege that the complainant swore falsely as to the total loss of insured property.
Billy Traxler and Archie Maddox testified that the insured Wayne Stone employed them to burn the insured property. This was denied by the owner Wayne Stone.
The insurance agent Koonce testified that in his opinion the property was not totally destroyed by fire. There was other testimony which showed that after notice was given to the attorney for the insurance company, the salvage of the destroyed property was in fact sold for two thousand five hundred dollars ($2,500.00).
The chancellor, after having heard the testimony, was of the opinion that the insurance company did not meet the burden of proving that the insured was implicated in the burning of the insured property. The court was also of the opinion that the appellee Associates Capital Corporation did not willfully conceal any material facts as to the value of the property destroyed. The chancellor denied the application of the insurance company to reform the policy so as to add the 'short form' of the 'loss-payable clause' to the policy in which the loss was payable to 'loss payee as interest may appear.' The court also held that although the name of Associates Capital Corporation was set out in the policy as Associates Capital Loan, nevertheless, there could be no question from the testimony that the appellee was the mortgagee, or payee, in the policy.
The appellant insurance company has set out eleven assignments of error on which a reversal of this case is sought. We have examined the record and authorities cited by the parties, and we are of the opinion that the chancellor was correct in rendering his decree for the Associates Capital Corporation for the sum of sixteen thousand one hundred dollars ($16,100.00) for the following reasons.
If the chancellor were correct in holding that the insured was not a party to the destruction of the insured property, the 'mortgagee' or 'loss payee' was entitled to the proceeds of the property either a 'its interest may appear' or as a direct contractual obligation to it from the insurance company. The mere fact that the persons who were guilty of arson said that the owner of the property employed them to burn the property does not necessarily make it true. The trial court was the judge of the weight and worth of the testimony. However, as we see it, the question as to whether or not the insured was involved in the destruction of the insured property is not the primary issue presented on this appeal.
The appellant has raised several collateral issues with reference to comments made by the chancellor in his opinion, that 'arson must be shown by clear evidence,' that the insured's reputation was 'none other than good,' and that the insured 'had been acquitted of the crime of arson.' These collateral issues are based upon the proposition that the alleged arson of the insured is a defense to the suit filed by the named 'mortgagee.' We do not agree with this theory under the facts in this case.
The real issues in this case are: (1) whether or not the chancellor should have permitted the policy to have been reformed; and (2) whether or not the policy, as written, permits a recovery for the loss of the insured's personal property.
The general rule of law in insurance cases is that, under a simple 'losspay...
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