State Farm Mut. Auto. Ins. Co. v. Central Sur. & Ins. Corp., No. 24448

• Court: Court of Appeal of Missouri (US)
• Writing for the Court: PER CURIAM
• Citation: 405 S.W.2d 530
• Decision Date: 04 April 1966
• Docket Number: No. 24448
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a Corporation, Respondent, v. CENTRAL SURETY AND INSURANCE CORPORATION, a Corporation, Appellant.

Page 530

405 S.W.2d 530 STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a
Corporation, Respondent,
v.
CENTRAL SURETY AND INSURANCE CORPORATION, a Corporation, Appellant. No. 24448. Kansas City Court of Appeals, Missouri. April 4, 1966.
Motion for Rehearing and/or Transfer to Supreme Court Denied
June 6, 1966.
Application to Transfter Denied Sept. 12, 1966.

Page 531

Henry G. Eager, Robert M. Duboc, Swanson, Midgley, Jones, Blackmar & Eager, Kansas City, for appellant.

Thomas E. Deacy and Deacy & Deacy, Kansas City, for respondent.

SPERRY, Commissioner.

This suit is based on plaintiff's right to subrogation against defendant. The case was tried to the court on an agreed statement of facts and resulted in judgment for plaintiff in the sum of $10,144.26. Defendant appealed.

Plaintiff, engaged in the automobile insurance business, in Missouri, issued its policy to Roberta E. Spargur, of Kansas City, Missouri, insuring her against liability for personal injuries inflicted by or through the operation of her 1952 Chevrolet passenger automobile described therein. The contract became effective July 14, 1955, and was in full force at all times material herein. The extent of personal injury liability covered by the policy was $15,000.00 for any one peron. That feature of the policy was extended to cover anyone operating the automobile with Miss Spargur's consent.

On February 25, 1961, while this automobile was being operated by Mr. Kilby F. Johns, with the consent of Miss Spargur, and while its ownership was vested in Miss Spargur, it struck and injured a Mr. Scoggins, a pedestrian, on a Kansas City street. Mr. Scoggins sued Johns and plaintiff settled and satisfied that claim for personal injuries in the amount of $11,500.00. In defending and settling said claim it incurred expenses, in addition to that amount, in the sum of $1,678.52.

Page 532

Miss Spargur authorized Johns to use her automobile, above described, since she owned another and newer automobile which she had acquired. From that time forward, Mr. Johns kept the automobile in his possession and paid all expenses thereon, including licenses, repairs, and gasoline. He was using it when he became an employee of Jenkins Music Company. Immediately after Johns was employed, in 1958, Jenkins caused to be issued to Mr. Johns a certificate of insurance issued by defendant, naming therein Jenkins and Johns as insureds. The Chevrolet automobile herein mentioned was described in that certificate. The coverage was for $50,000.00, for personal injuries suffered by any one individual in any one accident. That certificate did not insure against any loss or damage to the automobile itself, in any manner. All premiums had been paid thereon and it was current when this casualty occurred.

Johns testified to the effect that, after the accident occurred, he was sued and summons was served on him; that he notified defendant; that its agent contacted him and investigated the circumstances; that he told Johns that the loss would be adjusted and settled; that, later, defendant declined to pay the claim or to defend the suit; that it notified him to contact plaintiff, that plaintiff was primarily liable for the loss, up to $15,000.00; and that defendant would only be liable for any excess over and above $15,000.00, (the suit was for $40,000.00), within the limits of its coverage. Johns then notified plaintiff of the casualty and plaintiff assumed the defense of the suit, with defendant's full knowledge. Defendant refused to participate in the defense in any way, taking the position that plaintiff, alone, was liable to the full extent of its coverage, and that defendant was liable only for the excess, if any, over and above plaintiff's liability under its policy. It is agreed that the sum paid by plaintiff herein, including attorney fees and other expenses, is reasonable. Plaintiff says it is entitled to recover fifty/sixty fifths of that amount on the theory that defendant should pay its pro rata share of the loss based on the total coverage. The sum adjudged to plaintiff against defendant is correct and in accord with that theory, if plaintiff is entitled to recover under its theory of liability.

The evidence is to the effect that neither party knew the other had issued a policy covering this automobile, prior to the loss; but plaintiff knew that Johns was operating the vehicle while working for Jenkins, with Miss Spargur's consent; and defendant had been told, through Jenkins, that there was other insurance on the car. Defendant now, weakly, contends that it is not liable under any theory because Johns was not operating the vehicle, at the time the accident occurred, on any business connected with Jenkins. When defendant first denied liability it was on the theory that it was liable under its policy only after liability under plaintiff's policy was exhausted. It is a general rule of law that, having denied liability for a stated reason, an insurer may not, later assert a different one. McCarty v. United Insurance Company (Mo.App.), 259 S.W.2d 91, 94; Carroll v. Union Marine Insurance Company (Mo.App.), 249 S.W. 691, 692; Ash Grove Lime & Portland Cement Company v. Southern Surety Company, 225 Mo.App. 712, 39 S.W.2d 434, 441; Goffe v. National Surety Company, 321 Mo. 140, 9 S.W.2d 929, 938.

Defendant issued its certificate, describing this car, and both Jenkins and Johns are named therein. The language of the certificate does not limit defendant's liability except as to amounts it is to pay in case of loss, and as to coverages, to wit:

"Bodily injury liability. . each person, $ 50,000.00;
                "Bodily injury liability. . each occurrence, 100,000;
                "Medical payments. . each occurrence, 10,000.00;
                "Medical payments. . each person, 1,000.00;"
                

Page 533

Furthermore, after the casualty occurred, defendant did not cancel the policy but merely increased Johns' premium and the policy remained in effect until Johns left Jenkins employ. Defendant's contention that it is not liable because the automobile was not being used in connection with Jenkins' business when the casualty occurred is denied.

Mr. Johns testified to the effect that, immediately after he became an employee of Jenkins, Mr. Limbacher, his...