Red 73 Creamery, Inc. v. Lumbermens Mut. Cas. Co.

• Citation: 138 Ind.App. 273,209 N.E.2d 896
• Decision Date: 07 September 1965
• Docket Number: No. 1,No. 20090,20090,1
• Parties: RED 73 CREAMERY, INC., Appellant, v. SUMBERMENS MUTUAL CASUALTY COMPANY, Appellee
• Court: Court of Appeals of Indiana

Page 896

209 N.E.2d 896

138 Ind.App. 273

RED 73 CREAMERY, INC., Appellant, v. SUMBERMENS MUTUAL CASUALTY COMPANY, Appellee.

No. 20090.

Appellate Court of Indiana, Division No. 1.

Sept. 7, 1965.

[138 INDAPP 274] Zane E. Stohler, of Mendenhall, Hunter & Stohler, Winchester, J. Brandon Griffis, of Griffis, Griffis & Tripp, Richmond, Richard

M. Givan, Bowen, Myers, Northam & Givan, Indianapolis, for appellant.

Wilson & Bales, Winchester, Harlan, Harlan, Schussler & Keller, Richmond, for appellee.

CARSON, Judge.

This case comes to us on appeal from the Wayne Superior Court. The issues were formed by the appellant's fifth amended complaint and the appellee's answer in four paragraphs. The case was tried before the court without a jury and a negative judgment was rendered.

There were four principal issues presented by the pleadings which were substantially as follows:

'1. The amount of the appellant's loss or damage;

2. Whether or not the loss or damage was 'accidental' or the result of 'accident', within the meaning of the comprehensive loss provisions of the policy;

3. Whether or not the damaged milk transport tanker, which was out of appellant's possession on bailment at [138 INDAPP 275] the time of the issuance of the policy but which was acquired into appellant's operating fleet and business use and possession during the policy period, was afforded insurance under the language of the automatic coverage provisions of the fleet endorsement (Auto 8D Clause) or, alternatively, whether or not the knowledge of appellee's local insurance agent respecting said vehicle at the time of the issuance of the policy was imputed to the appellee so as to preclude the appellee from denying liability upon said vehicle under the law of waiver or estoppel, under the facts and circumstances in this case;

4. Assuming that the loss to the tanker was covered by the policy, whether or not the same was 'due and confined to mechanical failure' so as to be subject to the mechanical failure exclusion' of the policy.'

Upon these issues the court found the facts specially and found that the appellant's transport tanker was damaged resulting in a reduction in value of $9,000.00. The court further found that the automatic coverage provision of the fleet provision was not applicable to the piece of equipment damaged; that the insurance agent who sold the policy was a 'local agent' and had no authority to vary any of the terms of the policy, to interpret the policy, or to bind the defendant by any notice he may have had; that the damage to the equipment was due and confined to mechanical breakdown or failure. In all the court made 31 findings of fact but it is not necessary to set out such other findings for the purpose of this opinion. After making its findings the court rendered judgment in favor of the appellee and against the appellant for costs.

Some of the evidence was stipulated including the provisions of the insurance policy in question and in order to properly lay the background for this opinion it is necessary that those provisions be set out.

Following the court's judgment the plaintiff's motion for new trial was filed specifying ten grounds. The first being that the finding and decision of the court is contrary to law, [138 INDAPP 276] second that the finding and decision of the court is not sustained by sufficient evidence. Assignments 3 through 9 are that the court erred in its ruling on the plaintiff's objections to certain questions and the answers thereto and the tenth ground is that the court erred in its each and every conclusion of law upon its special findings of fact.

There are two assignments of error. First that the court erred in overruling the appellant's motion for new trial and second, that the court erred in its each and every conclusion of law upon its special findings of fact.

It should be pointed out that this being a negative judgment no question is presented to this court on the sufficiency of the evidence and second, that the objection to the conclusion of law admits that the findings of fact were sustained by sufficient evidence in the trial. It is only for us to consider whether or not the conclusions of law are correct upon the findings of fact and whether the findings of fact are contrary to law.

The facts are undisputed that the appellant owned the tanker in question at all times; that it was leased to the Aiken's Express of Osgood, Indiana; that it was returned to possession of the appellant about a month before the accident; that during all of this time the facts were known to the appellee's local insurance agent, the Mangas Agency of Union City.

We feel that it is necessary to give careful attention to the language of the insurance contract being mindful of the generally accepted proposition of law to the effect that insurance contracts are to be interpreted most favorably to the insured. Masonic Acc. Ins. Co. v. Jackson (1929), 200 Ind. 472, 481, 164 N.E. 628, 61 A.L.R. 840, cited with approval in State Security Life Ins. Co. v. Kintner (1962), 243 Ind. 331, 185 N.E.2d 527.

Applying the above rule we consider first the definition of automobile as defined in the insurance contract before us:

[138 INDAPP 277] '(4) Newly Acquired Automobile--An automobile, ownership of which is acquired by the named insured who is the owner of the described automobile, if the named insured notifies the company within thirty days following the date of its delivery to him and if either it replaces an automobile described in this policy or the company insures all automobiles owned by the named insured at such delivery date; but the insurance with respect to the newly acquired automobile does not apply to any loss against which the named insured has other valid and collectible insurance. The named insured shall pay any additional premium required because of the application of the insurance to such newly acquired automobile.'

'This policy does not apply:

'(h) under coverages C, E, F, G, H and I (1) while the automobile is subject to any bailment lease, conditional sales, mortgage or other encumbrance not specifically declared and described in this policy; (2) to loss due to war, whether or not declared, invasion, civil war, insurrection, rebellion or revolution or to...