Schimmel Fur Co. v. American Indem. Co.

• Decision Date: 14 April 1969
• Docket Number: No. 53796,No. 1,53796,1
• Citation: 440 S.W.2d 932
• Parties: SCHIMMEL FUR COMPANY, Inc., a Corporation, Plaintiff-Respondent, v. AMERICAN INDEMNITY COMPANY, a Corporation, Anthony Charles Vanier Harden, Defendants-Appellants, and General Insurors, Inc., a Corporation, and Lee Kling, Defendants
• Court: Missouri Supreme Court

Page 932

440 S.W.2d 932

SCHIMMEL FUR COMPANY, Inc., a Corporation, Plaintiff-Respondent, v. AMERICAN INDEMNITY COMPANY, a Corporation, Anthony Charles

Vanier Harden, Defendants-Appellants,

and

General Insurors, Inc., a Corporation, and Lee Kling, Defendants.

No. 53796.

Supreme Court of Missouri, Division No. 1.

April 14, 1969.

Rehearing Denied May 12, 1969.

Merle L. Silverstein, Edward P. McSweeney, Rosenblum & Goldenhersh, Clayton, for respondent.

Robert C. Ely, St. Louis, David L. Campbell, Clayton, for appellants.

HIGGINS, Commissioner.

Action in equity for reformation of written endorsements to insurance policy issued by American Indemnity Company and Lloyds of London (through agent Charles Vanier Harden) to provide $22,500 coverage by each company. Over defendants' contention that their liability was limited to $2,500 each, the court found the issues for, and entered judgment as prayed by, plaintiff. The amount in dispute is thus in excess of $15,000.

Plaintiff's cause of action for reformation is stated in its Count I: that on and after September 7, 1962, plaintiff was engaged as a merchant in furs and on and before September 16, 1963, had contracts of insurance in force whereby defendants, American Indemnity Company and Lloyds of London, each insured plaintiff against certain losses in that policy No. BOS 16678, issued by American for policy period March 29, 1962, to March 29, 1965, insured and indemnified plaintiff against loss to $30,000 of merchandise by burglary on premises at 1103 Washington Avenue, St. Louis, Missouri, and policy or certificate No. UL 2477, issued by Lloyds for policy period March 29, 1962, to March 29, 1965, insured and indemnified plaintiff against the same losses to the same amount as described in American's policy No. BOS 16678; that in 1963 plaintiff planned to, and did, open a second place of business at 8143 Maryland, Clayton, Missouri, consisting of retail sales area in the front of, and two storage rooms in the rear of, the premises; that plaintiff asked defendant Lee Kling to order and arrange for insurance to protect the new premises against loss by burglary, Lee Kling, through defendant General Insurors, Inc., having procured and sold plaintiff the insurance policies on the 1103 Washington Avenue premises; that just prior to September 16, 1963, plaintiff's officers, on behalf of plaintiff, met with Kling at 8143 Maryland with respect to the insurance of those premises and Kling advised that the desired protection 'could and should be effected by an endorsement and addition to the existing policies' covering 1103 Washington Avenue; that it was mutually agreed between plaintiff 'and defendants Lee Kling and General Insurors, Inc. on behalf of defendants American Indemnity and Lloyds of London * * * That the existing American Indemnity Company policy No. BOS 16678 would be amended and endorsed to cover the new premises at 8143 Maryland Avenue, insuring plaintiff against any loss of merchandise through burglary from said premises, in the maximum amount of $22,500.00 for any loss from either of the two rooms in the rear of the premises, and in the maximum amount of $2,500.00 for any loss from anywhere else on said premises outside of said rooms, and that in all other respects the terms of the original policy should apply. * * * That Lloyds of London policy No UL2477 would be amended and endorsed in accordance with the amendment and endorsement of the American Indemnity policy * * * effective as of September 16, 1963. * * * That in negotiating and agreeing to the amendment and endorsement to the aforesaid policies, defendant Lee Kling and defendant General Insurors, Inc. were acting as the agents of * * * Defendant American Indemnity Company and Defendant Lloyds of London. * * * That during the negotiations for procuring said additional insurance, plaintiff's officers made it clear that, in regard to the two rooms to the rear of the store, the larger room, known by plaintiff as the 'vault,' was to be used primarily for the storage of customers' garments which were insured under another policy (I.N.A.), and the smaller room, known as the 'stockroom,' was to be used primarily to store the merchandise and stock owned by plaintiff, and that it was the smaller room for which the high limit burglary insurance was primarily desired'; that a physical inspection was made of the premises on behalf of the insurers, after which plaintiff was advised to install a certain type of burglary alarm, and 'plaintiff was subsequently advised by Lee Kling that plaintiff was appropriately covered by burglary insurance in accordance with their previous mutual agreement and understanding'; that sometime between October and December, 1963, after the insurance coverage had commenced on the Maryland Avenue premises and after plaintiff had commenced business there, American prepared its formal endorsements to policy No. BOS 16678, and through mistake or misadvertence did not correctly describe the part of the premises to be covered by the larger or higher limit in that 'said endorsement provided that the $22,500.00 burglary insurance limit should apply to the 'stockroom,' but set forth the physical dimensions and physical description of the larger room in the rear of the premises, known as the vault; * * * this description, * * * prepared long after the insurance coverage had commenced, was mistaken and erroneous, in the (sic) plaintiff and American Indemnity Company had mutually agreed, through their respective agents, that the $22,500.00 limit should apply to both rooms in the rear of the premises and particularly to the smaller room, known by plaintiff as the stockroom'; that the mistake and error was not discovered until October, 1964, when plaintiff sustained a substantial loss by burglary of its stockroom, 'the smaller of the two rooms at the rear of the Maryland premises' that 'American Indemnity Company attempted and is attempting to claim that the limit of liability for loss from this smaller room is only $2,500.00'; that the ultimate written endorsement prepared by American and adopted by Lloyds did not express the true intent and mutual agreement of the parties 'as to the specific premises at 8143 Maryland upon which the higher limit of insurance was to apply' and 'long before said written endorsement was prepared and issued, an expressed oral agreement and contract was in existence and effect, in accordance with the mutual intentions of the parties'; that plaintiff has no adequate remedy at law, and the court should reform the written endorsement to policy No. BOS 16678 so that it properly reflects 'the mutual intentions and agreements of the parties by providing that the $22,500.00 insurance limit shall apply to both rooms in the rear of the premises at 8143 Maryland and particularly to the smaller of said rooms known and used as a stockroom for plaintiff's inventory.'

The answers of appellants American and Lloyds admitted the issuance of 'a policy of insurance, with endorsements, to plaintiff covering certain possible losses of property on premises of plaintiff' and denied 'each and every other allegation contained in Count I of plaintiff's petition.'

Plaintiff adduced evidence in support of its petition and to show that: American issued the policy in question, BOS 16678, to respondent February 1, 1962. The first page which contained the declarations had affixed to it a printed seal bearing the legend:

'General Insurors, Inc.

4144 Lindell Boulevard

Olive 2--2000

St. Louis 8, Mo.

Lee Kling'

At the bottom of the first page, over a line designated 'Authorized Representative,' appeared the stamp 'General Insurors Inc.' The last paragraph of the policy recited: 'In witness whereof, the American Indemnity Company has caused this policy to be signed by its president and a secretary at Galveston, Texas, and countersigned on the declarations page by a duly authorized representative of the company.' Endorsement No. 2, dated March 29, 1962, provided '* * * nor shall this endorsement bind the company until countersigned by a duly authorized representative of the company.' This provision is followed by a line designated 'Authorized Representative' over which is stamped 'General Insurors Inc.' The same provisions and designations are true also of Endorsement No. 1, also dated March 29, 1962.

Policy BOS 16678 was in effect in 1963 when Morris J. Schimmel contacted his insurance man, Lee Kling. Schimmel then had one place of business in downtown St. Louis at 1103 Washington which included a vault in the basement for storage of customers' furs and an upstairs stockroom for Schimmel's new merchandise. Endorsement No. 1 provided for high coverage ($27,500) for both these 'storerooms,' and for $2,500 coverage for loss outside such stockrooms. Schimmel planned to open a second store at 8143 Maryland Avenue in Clayton, and met with Kling prior to September 30, 1963, the date business was commenced in Clayton. Morris Schimmel told Kling he needed $45,000 coverage at the Clayton store on new merchandise which would be stored in a 'stockroom' at the rear of the store. Customers' garments would be stored in a 'storage vault' to the rear of the stockroom and also at the rear of the premises. The arrangement and intended use of rooms in the Clayton store were explained to Mr. Kling, and inspectors who came to the premises on behalf of the insurers were told how respondent intended to use the premises.

Mr. Kling, at the time he was on respondent's Clayton premises, was a vice-president of General Insurors, Inc. Mr. Schimmel had known and dealt with Mr. Kling for years, and knew of his position with General when arrangements were made for insuring furs at the Clayton store. For ten years Kling had written all of respondent's insurance through General. 'Mr. Kling was my agent and I only would say that, as a vice president of General Insurors, I don't know why I would have to look to anyone else.'

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