Moline Timber Co. v. Schaad, 334.

• Decision Date: 19 May 1930
• Docket Number: No. 334.,334.
• Citation: 28 S.W.2d 336
• Parties: MOLINE TIMBER CO. v. SCHAAD et al.
• Court: Arkansas Supreme Court

Page 336

28 S.W.2d 336

MOLINE TIMBER CO. v. SCHAAD et al.

No. 334.

Supreme Court of Arkansas.

May 19, 1930.

Rehearing Denied June 16, 1930.

Appeal from Pulaski Chancery Court; F. H. Dodge, Chancellor.

Suit by Ben D. Schaad and others against the Moline Timber Company. Decree for plaintiffs, and defendant appeals.

Reversed, and cause dismissed.

Chas. W. Mehaffy and Cockrill & Armistead, all of Little Rock, for appellant.

S. L. White, of Little Rock, for appellees.

SMITH, J.

Appellees brought this suit to reform a fire insurance policy and to collect the proceeds thereof after a loss had been sustained by fire, and in support of their cause of action offered testimony to the following effect:

Appellees sold some sawmill machinery to J. L. Young. Part of the purchase price was paid in cash, and the balance was evidenced by what was termed "title retaining notes." The contract of sale provided that Young should carry fire insurance on the machinery until the indebtedness was fully paid; the loss, if any, being payable to appellees as their interest might appear.

Young operated two sawmills before buying the machinery above referred to, which was installed in a third mill. Young operated all these mills in sawing lumber for the Moline Timber Company, and represented to appellees that he had taken out insurance as agreed, and after the fire attempted to collect the insurance for the benefit of appellees.

The fire loss was adjusted on the basis of $2,140, which amount was collected and appropriated by appellant. This amount was in excess of the balance due appellees by Young, and judgment was rendered in favor of appellees for the amount of their debt on account of the conversion of this insurance money.

The appellant timber company is a corporation under the laws of the state of Maine, and was represented in all of the transactions out of which this litigation arose by F. M. Lay and L. L. Adair. These gentlemen testified that, representing the appellant timber company, they made advances to Young in his sawmill operations, and that the balance due on these advances at the time of the fire amounted to about $10,000; that to secure this indebtedness they had, with Young's knowledge and at his direction, caused policies of insurance to be issued on all three of the mills and the timber thereat, and had paid the premiums thereon, which they charged to Young, and all the policies were payable to the appellant timber company as its interest appeared, and that after the fire proof of loss was duly made and adjusted and the amount thereof paid to appellant.

The court made no special finding of fact, but we assume the finding was made that Young represented to appellees that he had insured the...