Third Nat. Bank et al. v. Yorkshire Ins. Co.

• Decision Date: 29 December 1924
• Docket Number: No. 15197.,15197.
• Citation: 267 S.W. 445
• Parties: THIRD NAT. BANK et al. v. YORKSHIRE INS. CO.
• Court: Missouri Court of Appeals

267 S.W. 445

THIRD NAT. BANK et al. v. YORKSHIRE INS. CO.

No. 15197.

Kansas City Court of Appeals. Missouri.

December 29, 1924.

Appeal from Circuit Court, Pettis County; Dimmitt Hoffman, Judge.

Action by the Third National Bank and another against the Yorkshire Insurance Company. Judgment for plaintiffs, and defendant appeals. Affirmed, on condition of remittitur.

Lamm & Lamm, of Sedalia, and Crow & Newman, of Kansas City, for appellant. H. B. Shain and W. D. O'Bannon, both of Sedalia, for respondents.

BLAND, J.

This is an action on a fire and theft insurance policy issued upon an automobile belonging to plaintiff McAninch. There was a verdict and judgment in favor of plaintiffs in the sum of $1,295, and defendant has appealed.

On the 10th day of May, 1923, while the policy was in force the automobile was stolen and afterwards burned. The policy is in the sum of $1,000, and insured the automobile for one year beginning April 23, 1923. A short time after the fire, McAninch borrowed the sum of $750 from plaintiff bank, and assigned to the bank an interest to that extent in the insurance policy and claim against defendant. Defendant's amended answer alleges, among others things, that the policy provided that, if the automobile was encumbered by a mortgage, the policy should be void, and pleads that the policy was void for the reason that at the time of the issuance of the policy and at the time of the alleged loss the car was encumbered by a chattel mortgage.

Defendant insists that its demurrer to the evidence should have been sustained for the reason that, on account of perjury and false statements of McAninch, he is unworthy of belief. There have been two suits on this policy. In the first suit, McAninch alone was plaintiff, and his attorneys having discovered that he had assigned an interest in the policy and claim to the bank, dismissed that suit and brought) the present one in the name of the two plaintiffs. McAninch's deposition was taken in the former suit. He testified in that deposition that when he purchased the car he gave a chattel mortgage thereon for a part of the purchase price; that at the time the policy was solicited by defendant's agent this mortgage had been paid off; that this mortgage was released after the fire and was turned over to the defendant; that prior to the time that the insurance was taken out there was a second mortgage upon the car made to one Shepherd, which plaintiff, McAninch, had paid off in cash before the policy was written, but which had not then been released; that afterwards this mortgage was likewise released and sent to the defendant. He testified that he told Dow, the insurance agent who solicited the policy, that the second mortgage had been paid off but not released and Dow said, "Well, we'll write it that way." Defendant now insists that McAninch did not tell Dow of the Shepherd mortgage, and this contention is based on what appears in the deposition following the testimony we have related. Defendant's contention rests upon the following testimony of McAninch

"Q. What did you tell him (the agent) when you went to take out the insurance? A. Told him I wanted insurance to insure the car against fire and theft.

"Q. What else did you tell him, if anything? A. Nothing."

After testifying as just quoted, McAninch again explained that he told the agent that there was a mortgage upon the car that had been paid off, but had not been released. It is not apparent what the witness meant when he said that he told the agent nothing except that he wanted to insure the car against fire and theft, but, after giving this testimony, he further testified that he told the agent about the mortgage. Whether he did not understand the question at the time he testified that he told the agent nothing else, or whether he had reference to the matter of the description of the car, is not plain. Of course, he must have said something else to the agent for the reason that the agent would not have known the amount of insurance to be written if McAninch had not told him. The deposition, fairly construed, shows that McAninch told the agent about the Shepherd mortgage.

However, McAninch's testimony at the trial was different from that given in his deposition. At the trial he testified that he told the agent that the Shepherd mortgage had been executed by him to secure the payment of $600, but that as a matter of fact no valid note and mortgage ever `existed because the note and mortgage were executed without any consideration therefor; that the mortgage was placed upon the automobile because he was threatened with a suit upon a forged or fraudulent note, and it was executed for the purpose of preventing the holder of the note from levying upon the automobile in case he obtained judgment; that within a short time after the execution of the note and mortgage Shepherd delivered the note to McAninch. McAninch further testified that the mortgage was not released until after the loss, that the placing of the Shepherd mortgage upon the car was McAninch's own idea; that he did so without consulting his attorney, but that when the latter found out what he had done, he told him that such a step was useless, and he, McAninch, thereupon obtained the note from Shepherd. He testified that when his deposition was taken he had never been a witness before, and was somewhat confused, and had testified to facts concerning the second mortgage when he had the first in mind; that he stated to the agent all the facts in connection with the execution of the mortgage prior to and at the time of the issuance of the policy. Dow, testifying for defendant, stated that he did not at any time have any information or knowledge of the existence of the Shepherd mortgage.

Shepherd, a witness for plaintiffs, testified concerning the giving of the second mortgage substantially as McAninch testified at the trial. He stated, however, that McAninch told him in the fall of 1923, before the first suit was filed, that if any one asked him anything about the mortgage "to tell them that he (McAninch) paid me in cash" the sum of $600. He did not instruct Shepherd to tell this to the attorney for the insurance company, but to tell any one who came to see him about it. He also testified that plaintiffs' attorney, O'Bannon, told him, between March 26th and 29th, 1924, that he should not tell anybody the teal facts in the matter until he went on the witness stand, and not to tell the attorneys for the insurance company the real facts and truth of the matter until that time. Upon being recalled he testified that O'Bannon told him to "just let this go as it is until you come on the witness stand"; that he should relate the matter just as it occurred when he got on the witness stand. O'Bannon testified that what he told Shepherd was not to talk to the attorneys of the insurance company. Shepherd further testified that a few days prior to March 29, 1924, before the present suit was first set for trial, the attorneys for defendant came to see him and that he told them that McAninch had paid him $640 in cash approximately two months after the destruction of the automobile, and that the $660 in question was a loan made by the witness to McAninch. Shepherd admitted that what he told the attorneys was not true, but that he told them this because directed to do so by McAninch.

Plaintiffs' attorney, O'Bannon, testified that the case was set for trial on the 29th day of March; that a week prior thereto local counsel for defendant called him over the phone and asked him if he would waive the penalties and attorney's fees for vexatious delay if the company would pay the face of the policy; that he got in touch with his clients, and they agreed to the proposition, and it was accepted; that he came to the court house on the 29th expecting defendant to live up to the agreement he had made with its local counsel; that while waiting the call of the case defendant's out of town counsel, Newman, appeared for the first time, and called O'Bannon's attention to the Shepherd mortgage; that up to that time defendant had never based any defense on the Shepherd mortgage incident, but had merely filed a general denial; that Newman showed him an amended answer based upon the mortgage incident; that thereupon O'Bannon told Newman "all that occurred" and related to him that while the witness was out of town McAninch gave Shepherd the mortgage in question to discourage a levy on his automobile; that when the witness learned of this he told McAninch that he had done wrong, and that it would not be effective for the purpose intended, that he should get back the note; that at that time Shepherd had held the note not to exceed three or four days; that Newman replied that he would investigate the matter, and would keep the contract made by the local attorney, and pay the face of the policy if he found the facts as stated by O'Bannon to be true; that thereupon O'Bannon stated, "Shepherd is here, and while I told him not to talk to you, you can talk to him; if he verifies what I say, I am going to depend upon you to do what you say." Newman talked to Shepherd and obtained an affidavit from him on that day. O'Bannon further testified that about an hour after this conversation between Newman and himself the former called the latter over the phone and told him, "Mr. Shepherd, he has verified it; we are going to pay your policy;" that he (O'Bannon) did not know that defendant would not pay the policy until the case was called for trial, which was on May 21, 1924.

Shepherd in his affidavit that he gave to Newman and which was introduced in evidence by defendant, stated what actually occurred in reference to the giving of the chattel mortgage, and this was substantially as he testified to at the trial. He stated in the affidavit that there was no consideration for the note and mortgage, but that the note was indorsed without recourse and immediately returned. Shepherd...