Zancker v. Northern Ins. Co. of N.Y.

• Decision Date: 08 November 1943
• Docket Number: No. 20249.,20249.
• Citation: 176 S.W.2d 523
• Parties: NORMAN D. ZANCKER, APPELLANT, v. NORTHERN INSURANCE COMPANY OF NEW YORK, A CORPORATION, RESPONDENT.
• Court: Missouri Court of Appeals

176 S.W.2d 523

NORMAN D. ZANCKER, APPELLANT, v. NORTHERN INSURANCE COMPANY OF NEW YORK, A CORPORATION, RESPONDENT.

No. 20249.

Kansas City Court of Appeals, Missouri.

November 8, 1943.

Appeal from Buchanan Circuit Court. — Hon. Sam Wilcox, Judge.

AFFIRMED.

J.V. Gaddy for appellant.

(1) Respondent cannot maintain as a defense the fact that a mortgage was placed on the automobile. Williams v. Connecticut Fire Ins. Co., 47 S.W. (2d) 208; Bridgewater v. General Exchange Ins. Corp., 131 S.W. (2d) 220, 222; Davis, McDonald & Davis v. Tandy, 107 Mo. App. 437, 81 S.W. 457; Johnson v. Simmons, 61 Mo. App. 395; Milholen v. Mayer, 161 Mo. App. 491, 496. (2) The so-called second mortgage (Sun Money mortgage) was invalid and void because of usury. Sec. 3231, R.S. Mo. 1939; Smith v. Mohr, 64 Mo. App. 39; Smith v. Becker, 192 Mo. App. 597, 161 S.W. 286; Holmes v. Schmeltz, 161 Mo. App. 470, 143 S.W. 539. (3) If the second mortgage is not, in fact, valid, the respondent herein cannot urge that said instrument relieves them from liability on their policy. Saffran v. Rhode Island Ins. Co., 141 S.W. (2d) 98. (4) Neither the Sun Money nor the appellant treated their transaction as a mortgage, as the mortgage was never filed or stamped on deed as required by the statutes.

Price Shoemaker and Randolph & Randolph for respondent.

(1) The placing of the second mortgage on the insured automobile, subsequent to the issuance of the policy and without knowledge or consent of the company, relieves the company of liability for loss or damage during the existence of such mortgage. Bridgewater v. General Exchange Ins., 131 S.W. (2d) 222; See policy Exhibit A, "Exclusions." (2) Unless usury is shown by the instrument itself (except in possessory actions) the facts contituting usury must be pleaded with definiteness, particularity, and certainty. 66 C.J., p. 297, sec. 287; St. Paul Fire & Marine Ins. Co. et al. v. American Trust Co. (Mo.), 222 S.W. 142; Bond v. Worley, 26 Mo. 253. Usury must be specifically pleaded. Fischman v. Schultz, 55 S.W. (2d) 318. (3) The Sun Money Company note and mortgage are regular on their face, and usury will not be presumed. C.I.T. Corp. v. Byrnes (Mo. App.), 38 S.W. (2d) 750, 752; Bahl v. Miles, 222 Mo. App. 984, 6 S.W. (2d) 661; General Motors Corp. v. Weinrich, 218 Mo. App. 68; Mo. Discount Corp. v. Mitchell, 216 Mo. App. 100.

BOYER, C.

This is an appeal from a final judgment for defendant rendered by the trial court after giving an instruction offered by defendant in the nature of a demurrer to plaintiff's evidence, and after plaintiff had taken an involuntary nonsuit with leave to move to set the same aside.

The petition bases the action upon an insurance policy issued by defendant to plaintiff insuring against loss or damage to plaintiff's automobile occasioned by fire, and sought the recovery of damages to the automobile when it was burned.

The answer admits the issuance of the policy to plaintiff by which the company insured the car as alleged, but denies liability or any indebtedness to plaintiff because the loss was not covered, but was excluded from coverage, by the terms of the policy and in particular by the exclusion provision reading as follows:

"This policy does not apply: (b) Under any of the coverages while the automobile is subject to any bailment lease, conditional sale, mortgage, or other encumbrance not specifically declared and described in this policy."

The answer further alleged that after the issuance, delivery and acceptance of the policy and while the same was in force plaintiff, without any agreement on the part of defendant endorsed or added to said policy, made, executed and delivered his certain chattel mortgage dated December 8, 1941, by the terms and conditions of which he conveyed the property described in the policy to the Sun Money Company of St. Joseph, Missouri, to secure the payment of a debt to said corporation in the sum of $57.50, and that said mortgage was in full force and effect on the date of the fire mentioned in plaintiff's petition.

The reply was a general denial of the allegations in defendant's answer.

The policy and other documentary evidence, including the mortgage and note of plaintiff to the Sun Money Company, a letter in behalf of the company denying liability on account of said mortgage, and other letters and documents which have no bearing in reference to the points raised on appeal were all received in evidence at the request of plaintiff.

From the foregoing it appears that the policy was issued November 28, 1941. A debt to the General Credit Corporation was mentioned in the policy and the evidence shows that said debt was secured by a mortgage then existing upon the car. There is no claim by defendant that said mortgage was not declared in the policy. The exclusion provision pleaded in the answer is contained in the policy as alleged, together with other exclusion provisions. On December 8, 1941, plaintiff signed a note by the terms of which he agreed to pay the Sun Money Company the sum of $57.50, due January 8, 1942, and at the same time executed and acknowledged a mortgage pledging said automobile as security for the payment of the amount of the note, which sum was acknowledged to be justly due the mortgagee. It appears that the note and mortgage were both contained in the same instrument. The car was burned January 24, 1942, and was practically a total loss. Upon learning of the second mortgage defendant declined liability on account thereof, February 18, 1942.

Plaintiff testified to his ownership of the automobile, its value, its loss by fire, and over the objection and exception of defendant was permitted to testify in reference to "the circumstances" attending the execution of his note and mortgage to the Sun Money Company. In response to the objection to such evidence that it was immaterial and that plaintiff could not impeach the mortgage in this proceeding, the court stated: "We will admit the testimony because it will be a matter of law anyway. We will admit it subject to the objection and go into that a little later." Plaintiff then gave testimony as follows:

"Q. How much money did you borrow of them? A. Fifty dollars.

"Q. How much of a note did they require you to sign? A. Fifty-seven dollars and fifty cents, payable thirty days later.

"Q. How much money did they let you have — actually pay you? A. Fifty dollars.

...

"Q. Did they require you to sign a mortgage there? A. No, I understood they made second mortgages on automobiles. I understood that but they required nothing from me in regard to that.

"Q. But did you sign that mortgage? A. Yes.

"Q. That is your signature? A. Yes.

"Q. Do you know whether that was filled in at the time? A. No, I do not, sir.

...

"Q. Did you make any payment on this mortgage? A. No, sir.

"Q. Did you renew it? A. Yes, sir.

"Q. When? A. The latter part of December.

"Q. How much did you renew it for? A. I renewed it for the full amount.

"Q. How much did you pay them? A. Seven dollars and fifty cents.

"Q. Seven dollars and fifty cents per month? A. Yes, sir.

"Q. That is what you were paying them, and that is what they required you to pay as interest? A. Yes, sir.

...

"Q. What was the $7,50? A. Evidently it was interest." On cross-examination:

"Q. How much is still due and owing on this mortgage? A. Fifty dollars.

"Q. Did you sign anything besides this note and mortgage when you borrowed that money? A. Not that I remember of.

"Q. Are you sure? A. I might have signed a card, but not that I remember of.

"Q. Do you know how they arrived at the computation of $57.50? A. No, sir, I was not interested.

"Q. You don't know how they arrived at that? A. No.

"Q. You don't know how much is hazard charge and how much is interest? A. No, sir.

"Q. Do you know how much of that is an investigating fee? A. No, sir."

At the conclusion of plaintiff's testimony the court gave defendant's tendered Instruction A, reading as follows:

"The court instructs the jury that under the pleadings, the law and the evidence your verdict must be for the defendant."

Plaintiff objected and excepted and then took an involuntary nonsuit with leave, which was granted. Thereafter the court entered judgment for defendant. In due time, plaintiff filed his motion to set aside the involuntary nonsuit and to grant him a new trial on the alleged grounds that the court erred in giving defendant's Instruction A, for the reason that there were facts in evidence justifying submission of the case. The motion was overruled and upon proper steps an appeal was allowed to this court.

The appeal was first heard and determined here during the March term, with the result that the judgment was affirmed. A rehearing was granted and the case is now presented upon the same abstract and briefs heretofore furnished with the citation of additional authorities.

Appellant's first contention is that there was error in giving defendant's Instruction A because in so doing the court held in effect that the exclusion provision in the policy was broad enough to include any encumbrance placed on the insured property after the issuance of the policy; that the provision of the policy applied only to mortgages existing at the time of the issuance of the policy, but not declared; and that the policy is a contract prepared by the company and cannot be broadened beyond its specific terms by judicial construction

Such contention is not well founded. The policy provides that there should be no coverage while the automobile is subject to any mortgage not specifically declared and described in the policy. The provision is not ambiguous and is not subject to any construction other than its plain meaning. The word "while," as used in the policy, is an adverbial modifier expressing duration. It means "as long as," and is not limited to the date of the issuance of the policy but refers as well to time thereafter.

In the case of Bridgewater v. General...