Melugin v. Imperial Cas. & Indem. Co. of Omaha, Neb., 23232

• Court: Missouri Court of Appeals
• Writing for the Court: PER CURIAM
• Citation: Melugin v. Imperial Cas. & Indem. Co. of Omaha, Neb., 344 S.W.2d 144 (Mo. App. 1961)
• Decision Date: 06 March 1961
• Docket Number: No. 23232,23232
• Parties: Emmett L. MELUGIN, Plaintiff-Respondent, v. IMPERIAL CASUALTY AND INDEMNITY COMPANY OF OMAHA, NEBRASKA, a Corporation, Defendant-Appellant.

Page 144

344 S.W.2d 144

Emmett L. MELUGIN, Plaintiff-Respondent, v. IMPERIAL CASUALTY AND INDEMNITY COMPANY OF OMAHA, NEBRASKA a Corporation, Defendant-Appellant.

No. 23232.

Kansas City Court of Appeals, Missouri.

March 6, 1961.

Lewis W. Sanders, Kansas City, for appellant.

Speers & Bevins, Austin B. Speers, Howard W. Bevins, Kansas City, for respondent.

MAUGHMER, Commissioner.

The suit is for damages to plaintiff's tractor-truck caused by fire, which loss allegedly was covered under a policy of insurance issued by defendant. The verdict was for plaintiff in the amount of $4,600 (full amount of coverage, less $8,400 paid directly to mortgagee) with accrued interest of $540.50. The jury also found vexatious refusal to pay and allowed $460 damages therefor, plus a $1,000 attorney fee. However, these allowances were remitted in the trial court and are not, therefore, involved in this appeal.

The appellant-defendant makes four assignments of error. First. Plaintiff placed a reconditioned motor in the tractor, failed to register the change, as required by law, and as a result had no insurable interest in the tractor, and so failed to make a submissible case. Second. Defendant's motion for directed verdict should have been sustained because the value of the tractor was not established and the evidence did not justify submission of total loss. Third. The verdict was the result of bias and prejudice on the part of the jury, and Fourth, material hearsay evidence was improperly admitted.

The plaintiff, E. L. Melugin, is a truck owner and operator. Since 1946 he has operated from one to seven trucks in his own name and with his wife under the trade name M-G-N. Food Products, Inc. The cargoes were primarily meat and were hauled long distances.

In October, 1956, plaintiff, through G. Bartling & Company, insurance agents and brokers, Kansas City, Missouri, purchased a Pacific National Insurance Company policy covering his three trucks for a period of one year. Item No. 2 was therein described as a 1953 Freightliner Tractor NHRBS 115902--insurance limit $13,000. Item No. 3 listed a 1950 Mack Tractor--insurance limit $8,000. The insured had difficulty with the motor in the Freightliner and about June, 1957, the Cummins Motor Company of Kansas City overhauled the motors and placed the engine from the Mack truck into the Freightliner.

Section 301.370, V.A.M.S. provides: '2. The owner and the person removing and replacing such motor or engine shall join in an affidavit showing the number of the motor or engine removed, the date of removal, the reason for removal, and a description of the motor or engine replaced in the vehicle.

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'4. The affidavit, together with the original certificate of title, shall be sent to the director of revenue at Jefferson City, Missouri, with a fee of one dollar for registering such change of motor or engine. The director of revenue shall file the affidavit and certificate in his office and shall issue and deliver a new certificate of title to the owner.' Neither insured nor Cummins complied with this statutory requirement respecting the change of motors.

This first policy's expiration date was October 17, 1957. It was purchased on time payments. Plaintiff said the agency financed the payments for him through a bank loan. In August, 1957, the Bartling Agency advised plaintiff that his insurance was about to run out. Plaintiff told Mr. Bud Bartling to renew the insurance and asked if any further description of the property was needed and was told no further descriptions were required. A new policy was written and issued by Bartling & Company covering the same three trucks but with Imperial Casualty & Indemnity Company, Omaha, Nebraska, the defendant here, as insurer. The limit of liability in this policy on the Freightliner was $13,000 and on the Mack $8,000, the same as in the 1956 policy. The annual premium was $818. It is this policy which is the basis of the present litigation. Mr. Melugin says he paid part of the premium and offered in evidence two checks payable to Bartling & Company for $200 and $400, which carried notations 'Paid in full, 1956 and 1957 balance, and part down payment 1957-58 Insurance'. Defendant Company canceled this policy as of December, 1957, and Bartling & Company assigned their Melugin premium indebtedness to defendant, which company made it the basis of its Count 1 counterclaim against plaintiff. It was its claim plaintiff owed $878.93 as of the cancellation date, but the jury found for plaintiff on this item.

On November 20, 1957, plaintiff was in San Francisco, where he had driven one of his trucks. On this same date the 1953 Freightliner with the reconditioned engine, which had been taken from the insured Mack vehicle, was about 16 miles east of Pontotoc, Oklahoma, whence it had been driven by Robert Stout, plaintiff's truck driver, whose whereabouts at the time of trial were unknown to plaintiff. At this last mentioned time and place the Freightliner truck caught on fire and burned.

Highway Patrolman W. E. Larecy of Colby, Oklahoma, testified. He was called to the fire scene and arrived while the truck was burning. He said: 'It was completely burnt up', but the court erased this answer. However, he further described the truck's appearance as 'Just a bunch of burnt metal, twisted, burnt to a crisp'. The officer said the burned vehicle remained there two or three days. It was then hauled away by a tow truck. Mr. Melugin never saw it after the fire and never received any salvage benefits from it. He filed a written proof of loss prepared by himself. He was advised by Bartling & Company to see Vincent & Cook, Insurance Adjusters in Kansas City and did get in touch with Mr. Austin Vincent. Mr. Vincent advised him and also testified, that he had been employed by the insurer to adjust the loss; that he had caused the trailer to be returned to Missouri, but that the burned tractor had been left in Oklahoma. It was Melugin's testimony that $13,000 was a low valuation at the time of the loss. Mr. Vincent's letter of January 20, 1958 to plaintiff contained these statements: 'I would appreciate it if you would advise me immediately regarding the exact specifications of your White Freightliner tractor which was destroyed by fire on November 20, 1957. * * * We need this information to aid us in ascertaining the correct value of this machine at the time it was destroyed'.

The Seattle First National Bank held a $20,000 mortgage on two of plaintiff's tractors--$8,400 of which was on the Freightliner. Defendant company paid this $8,400 direct to the holder of the mortgage at the time of loss.

In response to written interrogatories defendant company stated the policy sued on was in full force and effect on November 20, 1957, the issuing agent was G. Bartling & Company, premiums in the net amount of $889.76 were paid thereon, the policy was canceled by the company on December 16, 1957, the loss was investigated by Vincent & Cook and $8,401 on the loss was paid to Colorado-Kenworth Corporation.

Defendant complains that material, hearsay evidence was improperly admitted. Count 2 of defendant's counterclaim sought recovery for the amount of a draft it issued to Willets, Green & Hays, mortgagee, covering a damage loss sustained later by one of plaintiff's tractors. Plaintiff said he was authorized by the mortgagee to cash the check and go ahead and make repairs on the damaged tractor. He offered to prove what the mortgagee's manager said to him in this regard. An objection that the question called for hearsay was sustained but the Court permitted him to say that 'he was given authority to sign' the mortgagee's name. We think the witness should have been permitted to relate what the manager said and then the Court and jury could decide if it amounted to...