Readenour v. Motors Ins. Corp.

• Decision Date: 14 January 1957
• Docket Number: No. 45468,45468
• Citation: 297 S.W.2d 554
• Parties: Floyd READENOUR, Respondent, v. MOTORS INSURANCE CORPORATION, Appellant, Farley State Bank, Interpleaded Defendant.
• Court: Missouri Supreme Court

Page 554

297 S.W.2d 554

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

No. 45468.

Supreme Court of Missouri, En Banc.

Jan. 14, 1957.

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

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

WESTHUES, Judge.

Plaintiff Readenour filed this suit against Motors Insurance Corporation on a policy of insurance. The subject of the insurance was a combine. The policy was dated May 28, 1952, and it expired on May 28, 1953, at 12:01 a. m. Plaintiff claimed the combine was damaged by fire on May 27, 1953. The defendant denied liability. The Farley State Bank held a mortgage on the combine and was made a defendant at the request of the Insurance Company. Liability was denied on two grounds. Defendant claimed the fire occurred on May 28, 1953, after the policy had expired and that it had no notice that the combine was covered by a mortgage, and, therefore, under the mortgage clause in the policy, the defendant was not liable. Those were the two principal issues in the case. There was also a dispute as to the amount of damage.

Plaintiff's petition was in two counts. In count one, plaintiff asked for reformation of the policy so as to show that the combine was covered by a mortgage. In count two, plaintiff asked $2,500 for damages caused by the fire.

By agreement of the parties, count one was tried before the court without a jury in October, 1954, and on October 29, 1954, the court entered a decree reforming the contract of insurance to show the existence of a mortgage. Later, on January 12, 1955, a jury trial on count two was concluded and a verdict and judgment were entered in plaintiff's favor in the sum of $800 subject to a lien of $700 in favor of the Farley State Bank. An appeal was taken by defendant Insurance Company to the Kansas City Court of Appeals where the judgment was affirmed. See 287 S.W.2d 135.

The court of appeals reviewed the questions briefed by the Insurance Company as to errors which were alleged to have occurred during the trial on count two by a jury. The court declined to consider any points briefed pertaining to alleged errors as to the trial before the court on count one of the petition. This, for the reason, as the court held, that the judgment on count one was a final judgment and no steps to appeal therefrom were taken and therefore no assignments of error briefed as to the trial on that count could be considered. The court cited Section 512.020 RSMo 1949, V.A.M.S., and 42 V.A.M.S. Supreme Court Rule 3.29, as authority. See 287 S.W.2d loc. cit. 138(1).

We are of the opinion that the court of appeals was in error in holding that the order of the trial court on count one of the petition reforming the policy of insurance was a final appealable judgment. It was for this ruling that this court ordered the case transferred.

The policy of insurance sued on had expired before this suit was filed. Count one asking that the policy be reformed was ancillary to the principal object of the suit. Had an appeal been taken from the decree on count one before the trial on count two, it would have and should have been dismissed as premature. The one and only object of the suit, though in two counts, was to collect damages on a policy of insurance that had expired when suit was The event giving rise to the cause of action pleaded had occurred. The suit of plaintiff constituted but one claim which was for damages. Court one, in the circumstances of this case and trial thereon, was not a separate trial of any claim, counterclaim, or third party claim within the meaning of our Rule 3.29 or Sec. 512.020, supra; Weir v. Brune, 364 Mo. 415, 262 S.W.2d 597; State ex rel. State Highway Commission v. Hammel, 290 S.W.2d 113, loc. cit. 117(11, 12), 118(13, 14).

We now consider the points briefed by the Insurance Company. Defendant says the evidence did not justify reformation of the policy; that the evidence did not show that Lewis, a farm implement dealer who also wrote insurance, was defendant's agent; and that the evidence was insufficient to show mutual mistake. The evidence showed that plaintiff purchased the combine in question from Lewis and Sons, dealers in farm implements, at Platte City, Missouri. The price was $4,500. Plaintiff paid $1,500 in cash and gave a note and mortgage for the balance due. The note was later transferred to the Farley State Bank where it remained until the combine was damaged by fire. The balance due at that time was $700. The note and mortgage had been renewed each year. Plaintiff's negotiations for the purchase of the combine were with J. W. Lewis. Lewis personally sold the note and mortgage to the Bank. Lewis suggested to plaintiff that the combine should be insured to protect the indebtedness. Lewis testified that he, in addition to carrying on the implement business, had an insurance business; that he wrote insurance for the defendant company; that he issued the original policy on the combine in question and notified plaintiff each time when the year was up; that plaintiff would then authorize him to renew the insurance; that he, Lewis, collected the premium and sent it to the defendant company; that he received a commission on all policies issued. Lewis further testified that he knew the note and mortgage were renewed each year and that the note had not been paid in full. In the circumstances, the trial court was justified in finding that Lewis was the agent of the defendant Insurance Company and therefore through him the defendant company had knowledge that the combine was covered by a mortgage. The decree reforming the policy was justified by the evidence. Benanti v. Security Insurance Company, 222 Mo.App. 763, 9 S.W.2d 673, loc. cit. 675(2). The defendant's contention that the evidence did not justify the decree is without merit. Since agency was shown, it was not necessary for plaintiff to prove there was a mutual mistake. We, therefore, need not discuss this point.

The following questions, which were briefed by defendant concerning the trial on count two, were disposed of by the court of appeals. Defendant says that the trial court should have dismissed the petition for failure to state a cause of action. This, because the petition did not allege that the defendant was a corporation. The court of appeals correctly disposed of this question. The court held that under Section 509.140 RSMo 1949, V.A.M.S., defendant should have raised that question by a 'specific negative averment' before trial which defendant failed to do.

We also find that the court of appeals correctly disposed of the other assignments of error briefed. We approve the disposition of the case as made by the court of appeals and we shall not consider the questions at length. We desire to make only a few comments. Defendant says that plaintiff had placed four undisclosed mortgages on the combine. There was but one indebtedness against the combine which represented the unpaid balance of the purchase price. The note and mortgage were renewed each year. Even if the old note and mortgage were not cancelled, they were, in fact, discharged by the renewal.

In the last two points briefed, ...