McCombs v. Fidelity & Cas. Co. of New York

• Citation: 89 S.W.2d 114,231 Mo.App. 1206
• Decision Date: 05 November 1935
• Docket Number: 23412.
• Parties: R. M. McCOMBS AND EMMA McCOMBS, RESPONDENT, v. THE FIDELITY AND CASUALTY COMPANY OF NEW YORK, A CORPORATION, APPELLANT
• Court: Court of Appeal of Missouri (US)

89 S.W.2d 114

231 Mo.App. 1206

R. M. McCOMBS AND EMMA McCOMBS, RESPONDENT, v. THE FIDELITY AND CASUALTY COMPANY OF NEW YORK, A CORPORATION, APPELLANT

No. 23412

Court of Appeals of Missouri, St. Louis

November 5, 1935

Opinion Modified; Appellant's Motion for a Rehearing Overruled January 2, 1936.

Appeal from Circuit Court, Cape Girardeau County; Frank Kelly Judge.

Action by R. M. McCombs and wife against the Fidelity & Casualty Company of New York. From a judgment for plaintiff named defendant appeals.

Affirmed.

G. A Hodgman and Oliver & Oliver for appellant.

(1) The great weight of authority in America definitely supports the position of the appellant: That under facts shown by this record there is no liability on the part of this appellant over and above that which it has paid. St. Joseph Transfer & Storage Co. v. Employers Indemnity Corp., 23 S.W.2d 215 (Kansas City Ct. of App.); Rumford Falls Paper Co. v. Fidelity & Casualty Co., 43 A. 503, 92 Me. 574 (first case in America); Auerbach et al. v. Maryland Cas. Co., 236 N.Y. 247, 140 N.E. 577; Schmidt & Sons Brewing Co. v. Travelers, 244 Pa. 286, 90 A. 6, 90 A. 653; Davis v. Maryland Cas. Co., 133 So. 769, l. c. 772 (La.); Best Bldg. Co. v. Employers Liability Assn. Corp., 160 N.E. 911, 247 N.Y. 451; Mendota Elec. Co. v. N. Y. Ind. Co., 221 N.W. 61 (Minn.); Georgia Cas. Co. v. Mann, 46 S.W.2d 777 (Ky.); Streat Coal Co. v. Frankfort Genl. Ins. Co., 142 N.E. 352 (N. Y.); Lander et al. v. Jordan, 59 S.W.2d 959 (Tex.); National Battery Co. v. Standard Acci. Ins. Co., 41 S.W.2d 599, l. c. 604, 226 Mo.App. 351; Brown and McCabe v. London Guarantee & Acc. Co., 232 F. 298; Emerson v. Western Auto Ind. Co., 182 P. 647, 112 Kan. 426; Newberger v. Preferred Acc. Ins. Co. of N. Y., 89 So. 90 (Ala.); Pennsylvania Mutual Life Ins. Co. v. Bank, 73 F. 653; Georgia Casualty Co. v. Cotton Mills Producing Co., 132 So. 73 (Miss.); 12 R. C. L. 237; New Orleans & C. R. Co. v. Maryland Cas. Co., 38 So. 89, l. c. 91, 114 La. 153; Wm. Levin v. New England Cas. Co., 135 N.E. 948, 233 N.Y. 631; Davison v. Maryland Cas. Co., 83 A. 407, 197 Mass. 167; Wynewood Lbr. Co. v. Travelers Ins. Co., 91 S.E. 946, 173 N.C. 269; Kingman & Co. v. Maryland Cas. Co., 115 N.E. 348, l. c. 351 (Ind.); Schencke Piano Co. v. Philadelphia Cas. Co., 110 N.E. 1049; National & Providence Co. v. Frankfort and Marine Ins. Co., 66 A. 58, 28 R. I. 126; Countryman v. Breen, 271 N.Y.S. 744, l. c. 747 (1934); McDonald v. Royal Ind. Ins. Co., 162 A. 620 (N.J.); City of Wakefield v. Globe Ind. Co., 225 N.W. 643, l. c. 646 (Mich.). (2) There is no bad faith on the part of the insurer in refusing to settle unless "under the conceded facts and upon settled principles of law, it would have been the duty of the court to direct a verdict for plaintiff for an amount in excess of the amount of the insurance. That is the rule fixed by the only appellate court ruling in Missouri on the subject. St. Joseph Transfer & Storage Co. v. Employers Ind. Co., 23 S.W.2d 215, l. c. 220. (3) Good faith is the opposite of bad faith, and bad faith and fraud are synonymous. Fraud is never to be presumed except when the law peremptorily so declares, but must be proven. Stark v. Starr, 1 Sawyer 15; Penn. Mutual Life Ins. Co. v. W. & S. Bank, 73 F. 653 (by Taft); City of Wakefield v. Globe Ind. Co., 225 N.W. 643 (Mich.); Mendota Elec. Co. v. N. Y. Ind. Co., 221 N.W. 61 (Minn.); St. Joseph Transfer & Storage Co. v. Employers Ind. Co., 23 S.W.2d 215, l. c. 220. (4) "Negligence is a positive wrong--a breach of duty, and no person may recover damages because of the wrong save the one to whom the duty was owing." Plaintiff's petition does not state that there was any duty on the part of the defendant to settle the McClard case. Forch v. Prudential Ins. Co. of A., 66 S.W.2d 983 (Mo. App.); Georgia Cas. Co. v. Cotton Mills Pro. Co., 132 So. 73 (Miss.). (5) A policy of indemnity insurance which provides that, in order for the assured to be indemnified, the loss must have actually been paid in money in satisfaction of a final judgment, means exactly what it says, must be enforced as written and cannot be "construed" to mean something else. State ex rel. Western Auto Ins. Co. v. Trimble, 249 S.W. 902, l. c. 905 (Mo. S.Ct. en banc), 297 Mo. 659; Prange v. Intern. Life Ins. Co., 329 Mo. 651, l. c. 661; State ex rel. Casualty Co. v. Cox, 322 Mo. 38. (6) Under the terms of the policy in question in this suit the reciprocal duties and obligations of the parties were fixed--the maximum liability of insurer fixed for a fixed consideration. To the extent of the first $ 5000 of liability "it occupied the position of the real party in interest." Dissenting opinion in Stone Co. v. Ins. Co., 186 Mo.App. 332; Adopted as Missouri law in Stone Co. v. Ins. Co., 274 Mo. 537. (7) "It is not suggested that the plaintiffs were misled by reason of the suppression of any of the facts by the insurance company or any fraud practiced upon them by it." Auerbach et al. v. Maryland Cas. Co., 236 N.Y. 247, 140 N.E. 577; Davis v. Maryland Cas. Co., 133 So. 769, l. c. 772 (La.). (8) In the McClard suit they both testified positively that their car did not hit the Pulliam truck. Their petition here specifically states it did strike it. Their failure to testify "is practically equivalent to an admission of the truth" of their former testimony in the other case. National Battery Co. v. Standard Acc. Ins. Co., 41 S.W.2d 599, l. c. 604 (Kansas City Court of Appeals). (9) With the rights stipulated in the contract of insurance it had authority to refuse to compromise without apprehension of being held for the difference, if thereafter cast by judgment in a larger amount than that at which compromise was offered. New Orleans & C. R. Co. v. Maryland Cas. Co., 38 So. 89, l. c. 91, 114 La. 153. (10) The fact that the insurer appealed the case which had resulted in a judgment for $ 5000, the amount of the indemnity, is no ground for complaint against it; that on appeal and retrial it might have resulted in a judgment for $ 10,000 though true is no basis for complaint by assured. It might also have resulted in a reversal of the $ 5000 judgment. Davidson v. Maryland Cas. Co., 83 A. 407, 197 Mass. 167. (11) "Insurer's duty is to elect to defend or to settle or to pay. It was not its duty to settle to the exclusion of the other alternatives." . . . "Liability against appellee cannot, in the absence of fraud, be predicated upon the fact that it elected to defend, rather than to settle." Kingman & Co. v. Maryland Cas. Co., 115 N.E. 348, l. c. 315 (Ind.); Schencke Piano Co. v. Philadelphia Cas. Co., 110 N.E. 1049 (N. Y.).

Dearmont, Spradling & Dalton for respondent.

(1) If the case could be submitted to the jury on any theory, then the demurrer to the evidence should have been overruled. Roques v. Railroad, 264 S.W. 474, 475; Conley v. Railroad, 253 S.W. 424, 427; Evans v. Klusmeyer, 256 S.W. 1036, 1039 (6). (2) The demurrer to the evidence admitted every fact, which the evidence showed in the slightest degree. City of St. Louis v. Nash, 260 S.W. 985, 986. (3) The demurrer searched the whole record to see if plaintiff's case was aided by defendants' proof. Lorton v. Railroad, 267 S.W. 385, 389; Stauffer v. Railroad, 243 Mo. 305, 316. (4) All inferences favorable to the plaintiff from the whole evidence must be considered and all unfavorable inference rejected. Stewart v. Light Co., 241 S.W. 909, 911; Buesching v. Gaslight Co., 73 Mo. 219, 230-231. (5) In passing on the demurrer, only that evidence most favorable to the plaintiff should be considered. Montague v. Railroad, 264 S.W. 813, 815; White v. Pupillo, 263 S.W. 1011, 1012; Stewart v. Furniture Co., 259 S.W. 875, 876. (6) The demurrer admitted every fact which the jury could have inferred from the whole evidence. Doody v. Mills Co., 274 S.W. 692, 696; Rooney v. Baggage Co., 269 S.W. 669, 670; Stratton v. Barnum, 263 S.W. 477, 478; Ross v. Hoppman, 269 S.W. 679, 680; Shields v. Railroad, 264 S.W. 890, 893; Poynter v. Const. Co., 265 S.W. 841, 842. (7) The Fidelity and Casualty Company was the agent of R. M. McCombs in the handling, adjusting and trial of the case of McClard v. McCombs and required to give the matter closer scrutiny than that of the ordinary agent because of the adverse interest. Douglas v. U. S. F. & G. Co., 127 A. 708, 711; Stowers Furniture Co. v. American Indemnity Co., 15 S.W.2d 544, 547; Hilker v. Western Automobile Ins. Co., 231 N.W. 257, 259. (8) In conducting the defense of the insured, it is the duty of the insurer to act in good faith, and in a careful and prudent manner, otherwise, it will be liable for damages caused by its negligence. 36 C. J., 1111-1112, Sec. 102; Maryland Casualty Co. v. Cook-O'Brien Const. Co., 69 F.2d 462, 464; Douglas v. U. S. F. & G. Co. (N.H.), 127 A. 708, 711; Stowers Furniture Co. v. American Indemnity Co. (Tex.), 15 S.W.2d 544, 547; Hilker v. Western Automobile Ins. Co. (Wis.), 231 N.W. 257, 259; Cavanaugh Bros. v. General Acc. Fire & Life Assur. Co. (N.H.), 106 A. 604; Attleboro Mfg. Co. v. Frankfort Marine Ins. Co. (Mass.), 240 F. (C. C. A.), 573 579; Mendota Electric Co. v. New York Indemnity Co. (Minn.), 211 N.W. 317, 318-319; Stevedores v. Ins. Co., 232 F. 298; Tiger River Pine Co. v. Maryland Casualty Co. (S. C.), 161 S.E. 491; American Mutual Liability Co. v. Cooper (Ala.), 61 F.2d (C. C. A.), 446, 448; Anderson v. Southern Surety Co. (Kan.), 191 P. 583; Noshey et al. v. American Automobile Ins. Co. (Tenn.), 68 F.2d 808, 809.

SUTTON, C. Hostetter, P. J., and Becker and McCullen, JJ., concur.

OPINION

SUTTON, C.

This is an action for damages arising out of a liability insurance policy issued by defendant, Fidelity & Casualty Company of New York, to plaintiff R. M. McCombs, on January 19, 1928 and renewed...