Shaffer v. Calvert Fire Ins. Co., 10243

• Decision Date: 12 December 1950
• Docket Number: No. 10243,10243
• Citation: 135 W.Va. 153,62 S.E.2d 699
• Court: West Virginia Supreme Court
• Parties: SHAFFER, v. CALVERT FIRE INS. CO.

Page 699

62 S.E.2d 699

135 W.Va. 153

SHAFFER, v. CALVERT FIRE INS. CO.

No. 10243.

Supreme Court of Appeals of West Virginia.

Submitted Oct. 4, 1950.

Decided Dec. 12, 1950.

Syllabus by the Court.

1. Parol evidence to contradict, add to, alter, enlarge, or explain a complete written agreement, which is clear and unambiguous, or to vary its legal effect, is inadmissible.

2. A contemporaneous oral agreement, which contradicts, adds to, alters, enlarges, or explains a complete written agreement between the same parties, or varies its legal effect, when such written agreement is clear and unambiguous, is void and of no binding force or effect.

3. A person does not have an insurable interest is an automobile when his only right to it is based upon an agreement which is void or unenforceable at law or in equity.

4. An instruction which submits a question of law for jury determination is erroneous and should be refused.

5. 'It is error to give an instruction based on inadmissible evidence.' Point 4, syllabus, Anderson v. Lewis, 64 W.Va. 297 .

6. The provisions of Code, 56-4-21, which require the defendant in an action on a policy of insurance to file a verified statement of defense, if he relies on any defense that such action cannot be maintained because of the failure to perform or comply with, or the violation of, any clause, condition, or warranty in the policy, do not apply to an automatic insurance clause which has not been violated and which, subject to specified exclusions, would constitute a defense by transferring the insurance on an automobile owned by the insured and described in the policy to another automobile of the insured, if he notifies the insurer, within a designated period of time, of its acquisition by him in place of the automobile described in the policy.

John M. Stephens, Whitesville, P. W. Hendricks, Madison, for plaintiff in error.

G. Steve Millhouse, M. O. Litz, Charleston, for defendant in error.

HAYMOND, Judge.

This case is here on writ of error, awarded the plaintiff, Loren Shaffer, doing business as Whitesville Motor Sales, to an order of the Circuit Court of Boone County, which set aside a verdict for $950.00 in favor of the plaintiff, assignee of Noble Q. Jarrett, in an action of assumpsit instituted in that court to recover the proceeds of a policy of fire insurance on a Ford automobile truck issued to Jarrett by the defendant, Calvert Fire Insurance Company, a corporation. To the declaration, in the short form provided by the statute, Code, 1931, 56-4-17, filed at September Rules, 1948, the defendant entered its plea of non assumpsit. It did not, however, file any written statement of defense as provided by Code 56-4-21. The action was tried, and the verdict rendered by the jury, on February 8, 1949. On motion of the defendant, the circuit court set aside the verdict and awarded a new trial, on the ground that the plaintiff did not have an insurable interest in the property covered by the policy at the time of the loss, and entered an order to that effect on April 19, 1949.

In February, 1948, Jarrett purchased from the plaintiff a 1941 Ford truck automobile which the defendant insured against loss by fire and other designated risks by the policy on which this action is based. On May 1, 1948, the plaintiff and Jarrett entered into an arrangement by which Jarrett purchased from the plaintiff, under a written agreement of the type commonly known as a conditional sales contract, a 1942 used Plymouth sedan automobile and returned the Ford truck. Under the arrangement Jarrett delivered the truck to Shaffer, an automobile dealer, at his place of business in Whitesville where it was left in the street in front of his parking lot. At the time of the arrangement, Jarrett, who resided about fifteen miles from Whitesville, took possession of the Plymouth automobile, and he continued to possess and use it at the time of the trial of this action. He entered into and signed the conditional sales contract which set forth the terms upon which he purchased the Plymouth automobile. He also had the title and the license plates for the Ford changed to the Plymouth by the Department of Motor Vehicles and paid the sales tax in connection with the purchase. The conditional sales contract between Jarrett and the plaintiff, introduced in evidence by the defendant, states that Jarrett purchased the Plymouth at the price of $1150.00, which embraced a cash payment of $391.00 and an unpaid residue of $952.00, in which were included $759.00 of the purchase price and insurance, recording and finance charges of $193.50, all of which Jarrett agreed to pay in fifteen monthly installments of $63.50 each. The contract contained no provision which permitted the purchaser to rescind the purchase, or to return the Plymouth and retake the Ford. Subject to the usual provisions relative to the rights of the seller in case of default in the payment of deferred installments by the purchaser, the contract shows an outright and completed sale of the Plymouth by the plaintiff to Jarrett, the purchaser. The contract also contains this provision: 'This agreement constitutes the entire contract and no waivers or modification shall be valid unless written upon or attached to this contract, and said Car is accepted without any express or implied warranties, agreements, representations, promises or statements unless expressly set forth in this contract at the time of purchase.' This agreement and the right, title and interest of the seller under it in and to the Plymouth automobile purchased by Jarrett were assigned by the seller to Commercial Credit Company on May 1, 1948.

Sometime during the month of May, 1948, and before the expiration of thirty days from the date of the conditional sales contract, the Ford automobile, while in the possession of the plaintiff, was destroyed by fire; and on May 25, 1948, after the occurrence of the fire, Jarrett assigned the policy of insurance, and his rights under it, to the plaintiff who, as assignee, instituted this action.

Upon the trial Jarrett and the plaintiff both testified, over the objection of the defendant, that, as part of the transaction covered by the written contract, they entered into a verbal agreement by which Jarrett was given an option, for a period of thirty days from the date of the sale, to return the Plymouth, retake the Ford, and cancel the contract. The reason he was given the option, according to Jarrett, was to afford sufficient time for his wife to decide whether the Plymouth was satisfactory and whether she desired him to keep it permanently. Despite the existence of the verbal agreement, as testified to by Jarrett and the plaintiff, Jarrett admitted, on cross-examination, that he had received and retained possession of the Plymouth, had caused the license plates issued for the Ford to be changed to the Plymouth, and had paid the tax imposed by law upon him as the purchaser of that automobile. The circuit court sustained the motion of the defendant to exclude the testimony relating to the verbal agreement, but later, during the trial, reversed its ruling upon the motion and permitted that testimony to be considered by the jury.

The circuit court submitted to the jury the question whether the insured had an insurable interest in the Ford automobile at the time of the loss. As the instance of the plaintiff and over the objection of the defendant, it also gave the jury this instruction: 'The Court instructs the jury that if you believe from the evidence that at the time the insured Ford truck was destroyed by fire, there was an existing agreement between the plaintiff, Loren Shaffer, and the witness, Noble Jarrett, to the effect that even though the truck had been delivered to Mr. Shaffer, Jarrett, if he so decided, could have reacquired the truck from Mr. Shaffer, then Jarrett had an insurable interest in the truck, and, after the loss occurred, he could assign his right to recover on the policy to another person; and if you believe that Jarrett had such an insurable interest, and if you further believe that Jarrett made an assignment of his right to Loren Shaffer, the plaintiff in this case, then you may find for the plaintiff and assess his damages at an amount not in excess of $950.00.'

The insurance policy provides automatic insurance for newly acquired automobiles and, among others, contains this clause: 'If the insured who is the owner of the automobile acquires ownership of another automobile and so notifies the company within thirty days following the date of its delivery to him, such insurance as is afforded by this policy applies also to such other automobile as of such delivery date: (a) if it replaces an automobile described in this policy, but only to the extent the insurance is applicable to the replaced automobile, * * *.'

The principal grounds on which the plaintiff relies to support his assignments of error are: (1) By its verdict the jury found that Jarrett had an insurable interest in the Ford automobile at the time of the fire and that finding, being based on conflicting evidence, should not be disturbed by the court; and (2) the defendant, not having filed a statement of defense, can not take advantage of the automatic insurance clause in the policy as a defense to the claim of the plaintiff. On the contrary, the defendant insists, in substance: (1) That the evidence does not establish a valid verbal agreement between the plaintiff and Jarrett with respect to his claimed right to...