Stoddart v. National Liberty Ins. Co.

• Decision Date: 21 May 1923
• Docket Number: No. 14677.,14677.
• Citation: 251 S.W. 398
• Parties: STODDART v. NATIONAL LIBERTY INS. CO. OF AMERICA.
• Court: Missouri Court of Appeals

251 S.W. 398

STODDART v. NATIONAL LIBERTY INS. CO. OF AMERICA.

No. 14677.

Kansas City Court of Appeals. Missouri.

May 21, 1923.

Appeal from Circuit Court, Buchanan County; Thos. B. Allen, Judge. "Not to be officially published."

Action by Thomas R. Stoddart against the National Liberty Insurance Company of America. From judgment for plaintiff, defendant appeals. Reversed and remanded.

John S. Boyer, of St. Joseph, and Crow & Newman, of Kansas City, for appellant. John E. Heffley and Randolph & Randolph, all of St. Joseph, for respondent.

ARNOLD, J.

This is a suit to recover on a fire insurance policy of $1,500, issued by defendant in favor of plaintiff on a 1½-ton Gary truck.

Defendant is a corporation organized and existing under the laws of the state of New York, and licensed to transact a general fire insurance business in the state of Missouri. The policy upon which this suit is based was issued June 27, 1921, and the premium thereon paid. On, September 1, 1921, the said truck was destroyed by fire. Defendant refused to pay the loss because of an alleged violation of a certain clause in said policy which provided that, if any mortgage be executed upon the automobile described in the policy after the delivery thereof, without the written consent of defendant company, then the policy should become null and void.

The truck was purchased by plaintiff from the Gary Truck Sales Company of St. Joseph, Mo., January 22, 1920, and on July 8, 1920, plaintiff entered into a conditional contract of sale of the truck to one Frank D. Becker. Becker placed a mortgage on the truck payable to one Lee Brown and plaintiff —in the case of the latter for the unpaid purchase price. The defendant issued to Becker a policy of fire insurance on the truck for the sum of $2,000, loss payable to T. H. Stoddart, plaintiff herein, and Lee Brown. Becker failed to meet the deferred payments on the purchase price, and plaintiff thereupon took the truck by writ of replevin, paid off the $450 mortgage placed thereon by Becker, and applied to defendant for the cancellation of the policy issued to Becker, and secured a new policy for $1,500, issued in plaintiff's name. In his application for the new policy plaintiff stated there were no existing mortgages or liens against the truck at that time affecting plaintiff's status as the unconditional and sole owner thereof. In order to pay off the Becker mortgage plaintiff borrowed $450 from the Morris Plan Bank of St. Joseph, giving a note therefor with one Walter O. Hoover as security.

At this point the testimony diverges, and there follows a heated dispute as to the facts in the case. It is contended by plaintiff, and there is testimony tending to show, that plaintiff went to the Morris Plan Bank, and executed a note for the loan, and at the suggestion of the manager of the bank also executed a chattel mortgage to said Hoover; that on a second visit the first agreement was changed and a new one entered into; that the manager of the bank, Mr. Toel, informed plaintiff that, with Mr. Hoover as an indorser, no chattel mortgage was needed, and the first set of papers was destroyed, and a note signed by plaintiff and Hoover was substituted therefor. However, there was a copy of the chattel mortgage filed for record in the office of the recorder of deeds on June 23, 1921, and canceled by the recorder February 1, 1922.

It is claimed by defendant that the chattel mortgage he gave to Hoover was by him assigned to the Morris Plan Bank, and a copy thereof filed in the recorder's office, and that the mortgage on the truck Was therefore an existing valid lien against, the truck at the time the policy was issued until and after, the destruction of the truck, and that it was afterwards canceled as above indicated. There was evidence tending to support this view.

The question for our determination is: Was there a valid chattel mortgage existing against the truck at the time the policy was issued and at the time the truck was burned, which would have invalidated the policy under the clause above mentioned?

The original mortgage was not introduced in evidence, and it was claimed that neither the bank nor plaintiff had it. However, a certified copy of the copy on file with the recorder of deeds was introduced.

The petition is formal, pleads the issuance by defendant of the policy, the destruction of the truck by fire, and prays judgment for the face of the policy less 5 per cent. for wear and tear, as provided by the policy, or $1,425, and reasonable attorney fees for vexatious delay.

The amended answer is first a general denial, and specially pleads the terms of the policy as follows:

" * * * That if any mortgage be executed on the automobile described in the policy after the delivery of said policy, without the written consent of defendant company, then said policy shall be void."

The answer further charges that at the time the policy was issued there was a chattel mortgage on said car securing the payment of $450 to W. O. Hoover, and that at the time the policy was issued plaintiff was not the sole owner of said truck, and that by reason thereof the policy sued on had no existence in fact. Tender of return of the premium prior to the institution of this suit also was pleaded. The answer further charges that at the time the policy was issued plaintiff was not in possession, nor was he the owner of said car.

The reply is a general denial, and further pleads knowledge of defendant of the sale of said cat to Becker and other facts surrounding the dealings and replevin suit, and states that "at the time he fully believed that all liens, incumbrances and mortgages against said truck had been canceled and released," and "that there was not on said truck at the time said policy was issued, nor at the time it was burned, any lien or incumbrance or condition of title which was material to the risk assumed by the defendant, or in any manner increased the hazard assumed by the defendant."

A peremptory instruction Offered on behalf of defendant at the close of all the evidence was refused by the court. The verdict and judgment were for plaintiff in the sum of $1,402.50. After unsuccessful motions for a new trial and in arrest, defendant appeals.

For its first assignment of error defendant urges that the trial court erred in refusing to sustain its demurrer offered at the close of the evidence, for the reason that plaintiff admitted under oath, in his examination by an adjuster of the company, made under the terms of the policy, that the property was mortgaged at the time the policy was issued and at the time the truck was burned. Plaintiff meets this situation by testimony tending to show that said adjuster refused to allow him to explain the circumstances relative to the alleged agreement to tear up the mortgage, and charges that the adjuster's investigation extended only so far as to develop a situation that would be useful in defeating the claim, and not far enough to establish the actual facts as to the status of the mortgage.

There can be no question that, if there was a valid mortgage in existence at the time the policy was procured, and a statement was made by plaintiff that no such mortgage was in existence, under the clause in the policy applicable thereto, the policy would be void. Buck v. Stuyvesant Ins. Co., 209 Mo. App. 302, 237 S. W. 840. But plaintiff meets this issue squarely by denying that any valid lien existed against the truck at the time the application was made and the policy issued, and declares there is no...