Manning v. Commerce Ins. Co. of Glens Falls, N. Y.

• Decision Date: 26 March 1947
• Docket Number: 310
• Parties: MANNING et al. v. COMMERCE INS. CO. OF GLENS FALLS, N. Y.
• Court: North Carolina Supreme Court

41 S.E.2d 767

227 N.C. 251

MANNING et al. v. COMMERCE INS. CO. OF GLENS FALLS, N. Y.

No. 310

Supreme Court of North Carolina

March 26, 1947

Civil action to recover on policy of automobile collision insurance.

These facts appear to be uncontroverted:

I. On 14 April, 1945, defendant being engaged in general liability insurance business in the State of North Carolina, and having H. A. White & Sons as its agent in Greenville, North Carolina, authorized to issue in its behalf automobile insurance policies, issued through this agency and delivered to plaintiff Rossie M. Manning a certain policy of insurance on his certain automobile, against loss by collision, within the life of the policy, with rider providing for 'single interest' limit of liability as hereinafter shown:

The policy of insurance in question is captioned 'Standard Automobile Policy', and sets forth on its face as 'Declarations' in pertinent parts, the following:

'I. Name of Insured--Rossie M. Manning * * * Except with respect to * * * mortgage or other encumbrance is the sole owner of the automobile, except as stated herein: Dickinson Ave Branch, Guaranty Bank & Trust Co.

'Loss Payee: Any loss hereunder is payable as interest may appear to the insured and Dickinson Ave. Branch, Guaranty Bank &amp Trust Co., Greenville, N. C.

'II. Policy Period: From April 14, 1945 to April 14, 1946.

'III. In consideration of the payment of the premium and in reliance upon the statements in the declarations and subject to the limits of liability, exclusions, conditions and other terms of this policy, the company agrees to pay for direct and accidental loss of or damage to the automobile hereinafter called loss, sustained during the policy period with respect to such and so many of the following coverages as are indicated by specific premium charge or charges:

COVERAGES-- LIMITS OF LIABILITY-- PREMIUMS B-1 COLLISION SINGLE INTEREST $4.00 (OR) UPSETT

'IV. Description of the automobile and facts respecting its purchase by the insured: 1939--Oldsmobile, etc. * * * Actual cost when purchased including equipment--$800.00: Purchased April 1945--Used--Encumbrance--$629.90--Installment Payments--One . . . Due Date-10/1/45.'

Among the conditions shown on the printed form of the policy are these:

'3. Limit of Liability: * * * The limit of the Company's liability for loss shall not exceed the actual cash value of the automobile, or if the loss is a part thereof the actual cash value of such part, at time of loss nor what it would then cost to repair or replace the automobile or such part thereof with other of like kind and quality, with deduction for depreciation, nor the applicable limit of liability stated in the declarations * * *.

'5. Payment of Loss: Action Against Company: Payment for loss may not be required nor shall action lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of this policy nor until thirty days after proof of loss is filed and the amount of loss is determined as provided in this policy * * *.

'9. Subrogation: In the event of any payment under this policy, the Company shall be subrogated to all the insured's rights of recovery therefor against any person or organization and the insured execute and deliver instruments and papers and do whatever else is necessary to secure such rights. The insured shall do nothing after loss to prejudice such rights.

'11. Changes: Notice to any agent or knowledge possessed by any agent or by any other person shall not effect a waiver or a change in any part of this policy or estop the company from asserting any right under the terms of this policy; nor shall the terms of this policy be waived or changed, except by endorsement issued to form a part of this policy * * *.

'16. Declarations: 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.'

Attached to and forming a part of the policy, besides another, is 'Finance Form 4', entitled 'Individual Policy Endorsement--Single Interest Collision Coverage', pertinent parts of which are as follows:

'1. Interest insured--Coverage Afforded--In consideration of an additional premium of $4.00, the policy designated above is extended to insure the interest only of Dick. Ave. Branch, Guaranty Bank & Trust Company, who, for the purpose of this coverage, is the Insured, or assignees of the Insured, hereinafter called 'Named Insured', in the automobile(s) described in such policy against loss or damage, hereinafter called loss, caused by collision of the automobile with another object or by upset of the automobile, while the automobile is in the lawful possession of a retail purchaser or borrower under a bailment lease, conditional sale, mortgage or other encumbrance * * *.

'3. Conditions Precedent to Liability: The Named Insured agrees, and it is a condition precedent to the attaching of the Company's liability for any loss under this Endorsement:

'(a) That on April, 1945 * * * the automobile was: 1. Sold by Lewis W. Herring, dealer, to Rossie M. Manning, retail purchaser, or 2. Pledged by -----, Borrower, to the Named Insured, under a legally enforceable bailment lease, conditional sale, mortgage or other encumbrance, and the unpaid balance due from the Purchaser or Borrower at the time of execution of such bailment lease, conditional sale, mortgage or other encumbrance was $629.90 * * * due * * * 10/1/45; also

'(b) That, at the date this Endorsement is effective, there are no payments more than thirty (30) days past due under any bailment lease, conditional sale, mortgage or other encumbrance covering the automobile; also

'(c) That the Named Insured shall not make any loss settlement, except at its own cost, which may in any way prejudice the rights of the company without the written consent of the company previously given; also

'(d) That, in case of loss which is covered hereunder and when so requested by the company, the Named Insured * * * shall use all reasonable means for the * * * recovery of the automobile * * *; also

'(e) That the Named Insured shall notify the company promptly of any change in ownership * * *; also

'(f) That the Purchaser or Borrower has defaulted in payment; and

'(g) That the Named Insured has made all reasonable efforts to collect overdue payments, and, failing so to do, has repossessed the automobile; and

'(h) That the interest of the Named Insured, as hereinafter defined, has become impaired * * *.

'4. Limits of Liability: The Company's liability for loss of or damage to any automobile insured hereunder shall not exceed the limits specified in such policy nor exceed the lowest of the following limits:

'(a) The cost of repair or replacement of the automobile; or

'(b) The actual cash value of the automobile at time of loss; or

'(c) The amount of any impairment of the Named Insured's interest as represented by the Purchaser's or Borrower's unpaid balance not more than sixty days past due less interest, insurance, finance and other carrying charges computed pro rata as of the date of loss * * *.

'The Named Insured's interest shall be impaired when the value of the automobile at the time and because of loss is reduced to an amount less than the Named Insured's interest therein * * *.

'This Endorsement is subject to the limits of liability, exclusions, conditions and other terms of such Policy which are not inconsistent herewith.'

II. The indebtedness of plaintiff Manning to plaintiff Bank, referred to in the 'Individual Policy Endorsement--Single Interest Collision Coverage' as above shown, is evidenced by his certain note payable to the Bank, dated 14 April, 1945, in the amount of $629.90, due 1 October, 1945, which expressly provides that the automobile in question is collateral security for payment thereof. This note bears endorsement of Floyd McGowan. On same date plaintiff Manning also executed to plaintiff Bank a chattel mortgage on the same automobile as security for same indebtedness.

III. The automobile, to which the policy of insurance relates, was damaged by collision with a mule on 4 August, 1945,--at which time no part of the note held by the plaintiff Bank was in arrears and no default thereon had then occurred.

Plaintiffs allege in their complaint in respect to other pertinent matters, that in the collision with the mule the automobile was damaged in excess of its salvage value in the sum of $229.90; that defendant was duly notified of said loss and damage and demand was made upon it for payment of the loss according to the terms and conditions of said policy, and defendant wrongfully denied liability in any amount and refused to pay any part of the loss and damage; that thereupon the plaintiff Manning, owner of the automobile, delivered same to plaintiff Bank, and, in order to reduce its damage as much as possible, it sold said automobile for $400 leaving a balance due and owing upon said note in the sum of $229.90, with interest from 1 October, 1945, for which due demand was made upon defendant; that plaintiff, at the time of the collision, had performed all of the conditions required of them in said policy; and that defendant, by reason of matters and things therein set forth, is justly indebted to plaintiffs in the sum of $229.90 with interest. Plaintiffs thereupon pray judgment.

Defendant answering,...