Merchants & Farmers Mut. Cas. Co. v. St. Paul-Mercury Indem. Co.
| Citation | 8 N.W.2d 827,214 Minn. 544 |
| Decision Date | 02 April 1943 |
| Docket Number | 33340. |
| Parties | NERCHANTS & FARMERS MUT. CASUALTY CO. v. ST. PAUL--MERCURY INDEMNITY CO. |
| Court | Minnesota Supreme Court |
Syllabus by the Court.
In an action by one liability insurance company against another to recover one-half its costs and expenses in defending and settling an action against the insured, the question whether the insured's policy in defendant company had been cancelled prior to the accident depended upon the intent of the parties as evidenced by their acts, and where different inferences could be drawn therefrom the question was for the jury and it was error to direct a verdict for defendant.
Weyl & Weyl, of St. Paul, for appellant. Faegre & Benson, Paul J. McGough, and Wright W. Brooks, all of Minneapolis, for respondent.
Action to recover of defendant one-half the amount plaintiff was required to pay as liability insurer of Jennie Schullo. Plaintiff's liability accrued as the result of an action brought against Mrs. Schullo and her son Millard by one John A. Berglund for personal injuries sustained when he was struck by the Schullo automobile. It appears that Mrs. Schullo assigned whatever rights she had against defendant to plaintiff. The trial court directed a verdict for defendant upon the ground that the evidence required a finding that Mrs. Schullo's policy with defendant had been cancelled prior to the accident and that therefore plaintiff was not entitled to contribution from defendant. Plaintiff appeals from an order denying its motion for new trial.
On December 26, 1940, defendant, through its agents, Barney & Barney, issued a standard automobile policy to Mrs. Schullo. The following month defendant advised its agents that because Frank Schullo, another son of the insured, had been convicted of a traffic violation it wished to eliminate him from coverage except when accompanied by a member of the family. About January 31, 1941, one of defendant's agents called Mrs. Schullo and informed her that the company would not carry the risk unless the policy be indorsed to so restrict its coverage. Mrs. Schullo did not consent to the proposed endorsement, and she said that she could get full coverage for Frank from some other company. The agent gave her a few days in which to obtain another policy. She told him that when she got it she would call him up and that he could come and get the defendant's policy.
On February 4, 1941, plaintiff issued its standard automobile policy to Mrs. Schullo. Four days later, Saturday, February 8, she called Frank H. Barney, defendant's agent, and told him that she had other insurance and to send ove the return premium and she would deliver the policy. There was some discussion as to the amount of the return premium to which Mrs. Schullo was entitled, but Mr. Barney finally agreed to refund the entire premium paid. He directed his junior partner to take the money over to Mrs. Schullo and to pick up the policy. The younger Mr. Barney did not attend to the matter that day.
In the early morning of the following Monday the accident giving rise to the action against Mrs. Schullo and Millard occurred. Mrs. Schullo notified the agents of both companies, and the Barneys then tendered a return of the premium and asked that she surrender the policy. She declined to accept the money or to relinquish the policy. Defendant refused to defend the action against the Schullos, and plaintiff seeks to recoup one-half its expenses incurred in the defense and settlement thereof.
The sole question before us is whether the telephone conversation of February 8 between defendant's agent and Mrs. Schullo effected a cancellation of the policy as a matter of law. If so, then of course the trial court correctly directed a verdict for defendant.
Rescission of an insurance contract may be accomplished by mutual agreement without an actual surrender of the policy. Whether a rescission has been accomplished depends upon the intent of the parties as evidenced by their acts. Miller v. Continental Ins. Co., 152 Minn. 404, 188 N.W. 1000; Id., 157 Minn. 489, 196 N.W. 651. It is ordinarily a question of fact for the jury to determine whether the parties intended a cancellation or rescission (MacDonell v. Keller Mfg. Co., 90 Minn. 321, 96 N.W. 785); and on a motion for directed verdict the evidence must be viewed in the light most favorable to the party opposing the motion. Arnold v. Dauchy, 115 Minn. 28, 131 N.W. 625. The party asserting the rescission bears the burden of proving it. Miller v. Continental Ins. Co., 152 Minn. 404, 188 N.W. 1000, supra.
When Mr Barney informed Mrs. Schullo that his company wished to limit the coverage on her son Frank, she told him that she desired full coverage for Frank and that she would get insurance with another company. Concerning this conversation with...
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