Readenour v. Motors Ins. Corp., 22313

• Decision Date: 09 January 1956
• Docket Number: No. 22313,22313
• Citation: 287 S.W.2d 135
• Parties: Floyd READENOUR, Respondent, v. MOTORS INSURANCE CORPORATION, Appellant, Farley State Bank, Interpleaded Defendant.
• Court: Missouri Court of Appeals

Page 135

287 S.W.2d 135

Floyd READENOUR, Respondent, v. MOTORS INSURANCE CORPORATION, Appellant, Farley State Bank Interpleaded Defendant.

No. 22313.

Kansas City Court of Appeals, Missouri.

Jan. 9, 1956.

Watkins & Watkins, C. D. Hale, St. Joseph, for appellant.

Richard W. Mason, Homer C. King, St. Joseph, for respondent.

DEW, Presiding Judge.

The plaintiff brought this action in two counts. In the first count he sought to reform the insurance policy sued on so as to include a mortgage clause as if attached thereto, and in the second count he asked for damages under the policy for the loss of his combine harvesting machine by fire, including attorneys' fees and $250 for vexatious refusal to pay the loss. On the application of defendant Motors Insurance Corporation, the court permitted it to interplead the Farley State Bank of Farley, Missouri, as a party defendant and to file a third party petition accordingly. On separate trial of the first count the court decreed reformation of the policy to show a mortgage clause attached. On trial of the second count, tried before a jury, a verdict was rendered for the plaintiff in the sum of $800 damages, subject to a lien in favor of the Farley State Bank in the sum of $700. The issue of damages for vexatious refusal to pay and other penalties was not submitted. After judgment on Count II, a motion for new trial of that count was filed by the defendant Motors Insurance Corporation, only, which was overruled, whereupon said defendant brought this appeal. Hereinafter the word 'defendant' will apply only to Motors Insurance Corporation, the appellant.

The substance of Count I of the plaintiff's petition is that on May 28, 1952, he was the owner of a certain International 1949 12-foot combine harvester and on that date, defendant, through its agent, issued the policy sued upon and which was attached to the petition as an exhibit, insuring the combine against fire and other hazards as defined in the policy; that at the time the policy was issued plaintiff told defendant's agent and servant that said combine was mortgaged, and that a clause to that effect should be attached to the policy, a fact well known to said defendant and its agent, but that said agent failed to attach said clause to the policy and accepted plaintiff's premium for said policy at the time in the sum of $47.25; wherefore, the plaintiff prayed for an order reforming the policy to read as if said mortgage clause were attached, it being the mutual understanding between plaintiff and defendant that said equipment was insured with a mortgage clause attached, but that said defendant failed to attach the same on the policy.

Plaintiff's Count II adopted the allegations of his Count I and alleged that on May 27, 1953, while the aforesaid policy was in effect, the harvester described in Count I was substantially damaged by fire in the sum of $2,500; that although the fire occurred without the fault of plaintiff and although plaintiff notified defendant promptly of said loss, defendant failed and refused to pay the same and has vexatiously refused to adjust the loss or damage as required by the terms of the policy, making it necessary for plaintiff to employ counsel to collect the amount due him under the policy, and reasonable attorneys' fees in the sum of $225, and that plaintiff should recover also 10 percent of the value of said loss, in the sum of $250.

Prior to the answer the parties agreed to admit in evidence without further identification or objection, a letter to the defendant from the Farley State Bank as follows:

'June 29, 1953

'Motors Insurance Corporation

Kansas City, Mo.

'Gentlemen:

'This is to advise that we hold a chattel mortgage note dated July 23, 1952 signed by Floyd and Cecelia Redenour, Cameron, Mo. in amount of $1000 with interest from July 23, 1952, at rate of 7 per cent. The note is secured by chattel on a 1949 McCormick-Deering self-propelled 12 ft combine.

'Very truly yours,

/s/ Wallace J. Farley Cashier'.

For its answer the defendant denied generally the allegations of the petition, pleaded laches, defect of parties and the fact that the petition sought damages for willful failure of the defendant to pay the alleged loss and at the same time asked that the policy be reformed to contain the mutual understanding of the parties in which event, in case of loss, the defendant should pay the same under the policy to the mortgagee. The answer proceeded to allege grounds for its application to interplead the Farley State Bank, which application was later sustained, as stated.

The defendant thereupon filed a petition in interpleader, alleging that it had received written notice from the Farley State Bank that it claimed an interest in the alleged contract sued upon by the plaintiff and claimed to have a mortgage on the property in question at the time of the alleged fire, and, therefore, upon the proceeds payable thereunder. It was stated that a complete determination of the controversy required the presence of the Farley State Bank as a party, praying for the issuance of summons accordingly.

Plaintiff thereafter filed a motion to reform the policy of insurance, as pleaded in Count I of his petition, setting forth that the question was one in equity rather than one in law, and should be determined prior to a hearing on the merits of Count II. With the agreement of the parties in open court, the court proceeded to try Count I of the petition separately as a proceeding in equity.

The evidence pertaining to Count I need not be set out or considered on this appeal. Count I states an action in equity for reformation of the insurance contract, was so construed by the court and, by the consent of both parties in open court was separately tried as such and a decree was rendered for the plaintiff thereon on October 19, 1954. No motion was filed for a retrial of Count I. After the decree in Count I, the court made no order to hold it in abeyance to abide the judgment on the second count, nor to declare it of an interlocutory nature. The second count was tried nearly three months later before a jury, and the verdict and judgment were rendered therein on January 12, 1955, solely on the issues of Count II. After defendant's motion for retrial of Count II was filed and overruled, defendant appealed from the judgment 'entered by this court in this cause on January 12, 1955'. In the trial of Count II the court instructed the jury to disregard the fact that the policy showed no existing mortgage on the combine (the issue in Count I) since the court had already decreed a reformation of the policy to show such mortgage as if originally endorsed on the face of the contract. Under the circumstances and under Section 512.020 RSMo 1949, V.A.M.S., and 42 V.A.M.S. Supreme Court Rules, rule 3.29, the decree and judgment of the court on Count I is a final judgment which, for want of appeal therefrom, is an adjudication of the issues therein involved. Lightfoot v. Jennings, 363 Mo. 878, 254 S.W.2d 596; Harper v. St. Joseph Lead Co., 361 Mo. 129, 233 S.W.2d 835. Hence it would serve no purpose to set out the evidence pertaining solely to Count I, nor would it be proper to consider the following points made on this appeal but submitting specifications of error in the trial of Count I.

'II.

'Count I of the petition sought reformation of a contract. At the close of plaintiff's evidence on Count I defendant filed a motion for a directed verdict. The court erred in overruling this motion because there was no showing that a contract existed and no showing of mutual mistake.

'III.

'The trial court found J. W. Lewis, Jr., to be the agent for the defendant and the defendant bound by his knowledge. This was error. The evidence showed that Lewis procured the insurance from the defendant and was the agent of plaintiff.

'IV.

'Count I sought reformation of a contract. Plaintiff did not show by clear evidence an obvious mutual mistake. Therefore the court erred in reforming the contract.

'V.

'The court erred in entering a judgment for plaintiff on Count II for breach of contract. Defendant had shown that in violation of the terms of the contract the plaintiff had put on the property insured an accumulation of four (4) undisclosed liens.

'VI.

'Plaintiff's instruction Number 2 told the jury they need not consider whether defendant knew of the existence of any mortgage, that the court had already determined this issue against the defendant. This was prejudicially erroneous and excluded a vital issue from the case.'

At the trial of Count II, the plaintiff, a farmer 63 years of age, testified that in 1949, he purchased the combine from Lewis & Son, implement dealers at Platte City, Missouri, and for several years had taken out annual policies of insurance on it as required by the ...