Thomas v. American Automobile Underwriters' Agency

• Decision Date: 01 May 1928
• Docket Number: No. 20321.,20321.
• Citation: 5 S.W.2d 660
• Parties: THOMAS v. AMERICAN AUTOMOBILE UNDERWRITERS' AGENCY, Inc.
• Court: Missouri Court of Appeals

5 S.W.2d 660

THOMAS v. AMERICAN AUTOMOBILE UNDERWRITERS' AGENCY, Inc.

No. 20321.

St. Louis Court of Appeals. Missouri.

May 1, 1928.

Appeal from Circuit Court, Cape Girardeau County; Frank Kelly, Judge.

"Not to be officially published."

Action by W. H. Thomas against the American Automobile Underwriters' Agency, Incorporated. Judgment for plaintiff, and defendant appeals. Affirmed.

Oliver & Oliver, of Cape Girardeau, for appellant.

Ward & Reeves, of Cape Girardeau, for respondent.

SUTTON, C.

This is an action on a fire insurance policy covering on one International bus in the sum of $2,800. The trial, with a jury, resulted in a verdict in favor of plaintiff for $2,760, with $161 interest, a penalty of $292.10, and an attorney fee of $300, aggregating $3,513.10, and judgment was given accordingly. From this judgment, the defendant appeals.

The policy sued on was issued on May 9, 1925. The bus insured was destroyed by fire on November 12, 1925, during the currency of the policy. The policy, in which the insurer is designated as the Exchange, provides, as follows:

"The Exchange shall not be liable for loss or damage to the automobile insured under this policy while the assured shall have any other insurance, whether valid or not, upon the automobile insured under this policy."

The defendant insists here that its instruction in the nature of a demurrer to the evidence should have been given, on the ground that the plaintiff had other insurance on the bus, whereas the plaintiff insists that the defendant, not having returned or offered to return the premium received under the policy, is estopped to deny that the policy was valid at the time of the fire.

It appears to be recognized as a general rule that a return of the premium is not essential to the avoidance of an insurance contract, nor is its mere retention a waiver, especially where the insured was guilty of fraud in obtaining the insurance. But the rule is otherwise where the ground of avoidance goes to the root of the whole insurance contract and avoids it from the beginning, so that no risk ever attached, and where there was no fraud in obtaining the insurance. Schwab v. Brotherhood of American Yeomen, 305 Mo. 148, 264 S. W. 690, loc. cit. 692; Meyer Dairy Equipment Co. v. Connecticut Fire Ins. Co. (Mo. App.) 287 S. W. 663, and cases there cited; Harland v. Liverpool & London & Globe Ins. Co., 192 Mo. App. 198, 180 S. W. 998; Marsden v. Williams (Mo. App.) 282 S. W. 478; State ex rel. Williams v. Daues (Mo. Sup.) 292 S. W. 58; Pauley v. Business Men's Assurance Co., 217 Mo. App. 302, 261 S. W. 340.

It is the general rule, applicable to all contracts, with the possible exception of insurance contracts, that a party seeking the avoidance of his contract ab initio either at law or in equity, must tender the return of what he has received under it, even though the avoidance is sought on the ground of fraud. The rule is not founded on any solicitude for the fraud-feasor, but on the iniquity of allowing a party to repudiate his contract while holding onto the benefits received under it. But in the present case no fraud appears. There was no misrepresentation or deception relative to the existence of other insurance. Moreover, it does not conclusively appear that there was other insurance. If, however, there was other insurance, it is certain that it existed at the time the policy sued on was issued. The ground upon which defendant seeks the avoidance of the policy existed at the time of the issuance of the policy, and continued throughout its currency, so that no risk ever attached under it. Thus the defendant is insisting that the policy was never a valid and binding contract, and never imposed any liability or obligation on the defendant. The retention of the premiums received under the policy is utterly inconsistent with this insistence....