Southern Farm Bureau Cas. Ins. Co. v. Gaither

• Decision Date: 04 May 1964
• Docket Number: No. 5-3265,5-3265
• Citation: 378 S.W.2d 211,238 Ark. 50
• Parties: SOUTHERN FARM BUREAU CASUALTY INSURANCE COMPANY, Appellant, v. Bert GAITHER, Appellee.
• Court: Arkansas Supreme Court

Page 211

378 S.W.2d 211

238 Ark. 50

SOUTHERN FARM BUREAU CASUALTY INSURANCE COMPANY, Appellant, v. Bert GAITHER, Appellee.

No. 5-3265.

Supreme Court of Arkansas.

May 4, 1964.

Barrett, Wheatley, Smith & Deacon, Jonesboro, for appellant.

D. Leonard Lingo and Harry L. Ponder, Walnut Ridge, for appellee.

HARRIS, Chief Justice.

Appellee, Bert Gaither, was involved in a collision while driving his 1963 International truck. At the time of the collision, Gaither held a policy of insurance with the appellant, Southern Farm Bureau Casualty Insurance Company, and the policy was in full force and effect. The particular provision pertinent to this litigation is as follows:

'The limit of the company's liability for loss is the actual cash value of the automobile or its damaged parts at the time of loss. The company may pay any loss or repair or replace the automobile or its damaged parts * * *.'

An estimate was made by Webb Body Shop of Walnut Ridge, and a repair estimate was made on June 10, 1963, in the amount of $1,426.35. The appellant company authorized repairs on the basis of this estimate, ¹ but appellee insisted that he was entitled to a new cab, and he refused to authorize the repairing agency to proceed. The testimony reflected that subsequently additional damage to the truck was discovered, consisting of a bent frame, and two badly cut tires, which were not included in the Webb estimate. ² Appellee filed his complaint against appellant, and, after amendment, sought judgment in the amount of $2,618.07, together with penalty, attorney's fee, and costs. The company answered, contending that it was liable only to the extent of $1,326.35, and that it had promptly offered to pay this amount, which would fully comply with the policy, but that appellee had refused to authorize the repairs. On the day of trial, Gaither reduced the prayer of his complaint to $2,075.00, but the company only tendered the aforementioned $1,326.35. At the conclusion of the evidence, appellant moved for a directed verdict, but the motion was denied. On trial, the jury returned a verdict for appellee in the amount sought, and the court thereupon entered its judgment for $2,075.00, plus a penalty of $249.00, and an attorney's fee of $350.00, together with costs. From such judgment comes this appeal.

Appellant contends that under the policy of insurance it had an absolute right to repair the damaged vehicle, provided it exercised its option to do so within a reasonable time, and obtained a reputable repairing agency, located at a reasonable distance from Gaither's home, to handle the repairs. It is asserted that when the company elected, under its option, to repair the vehicle, the original contract was converted into a contract to repair.

Appellee contends that it was the duty of the company to repair the truck in a manner that would restore it to substantially the same value as at the time of the collision. We have held that the measure of damages is the difference in the market value of the vehicle immediately before and after the collision....