Opinion
No. 43336.
July 13, 1953. Motion for Rehearing or to Transfer to Court en Banc Denied September 14, 1953.
APPEAL FROM THE CIRCUIT COURT, CITY OF ST. LOUIS, F. E. WILLIAMS, J.
Willson, Cunningham McClellan, By J. H. Cunningham, Jr., St. Louis, for Home Indem. Co., appellant.
Roberts P. Elam, St. Louis, for George N. Graff, respondent.
The Home Indemnity Company appeals from a judgment against it for $22,000 as surety on an appeal bond in the above entitled cause, reported in Mo.Sup., 248 S.W.2d 648. That case was a bill in equity brought by seven fire insurance companies seeking a declaratory judgment and the reformation of their eight insurance policies aggregating $59,500, covering a building on land owned by a defendant-respondent therein, George N. Graff, which had been destroyed by fire. All these policies ran to "Thomas F. Stephens. Trustee, as his interest may appear."
The insurance companies sought to establish that their policies did not cover defendant Graff, owner of the land, but only the interest of the same Thomas F. Stephens in his capacity as trustee in a deed of trust on the property, given by defendant Graff securing his notes for $75,000, on which $69,000 was due, the notes being payable to another defendant Sam Iaconetti and held as collateral by still another defendant, the First National Bank of St. Louis, for Iaconetti's indebtedness to it.
The insurance companies based their claim of nonliability to defendant Graff on a provision in their policies that if they should deny liability to the mortgagor or owner (Graff) they should, to the extent of payments of loss to the mortgagee (trustee Stephens), be subrogated to the latter's rights of recovery but without impairing his right to sue. Or the companies could pay off the mortgage debt and require an assignment thereof, and of the mortgage, to them. The owner-mortgagor Graff had obtained this so-called "single interest" insurance running to the trustee Stephens as his interest might appear, through a broker Powers and had paid the premium on the policies and the broker's $10,000 commission, but had never seen the policies. Graff thought the insurance would cover his ownership interest in the property as well as that of the trustee Stephens — or the encumbrancer interests he represented.
The building covered by the insurance was destroyed by fire on or about January 1, 1948, with a resultant loss exceeding the $59,500 coverage of the insurance policies. Due notice was given to the insurance companies on or about January 1, 1948, but for over six months they refused to pay except on their own terms — namely, that they be accorded a right of subrogation against the landowner respondent Graff. Finally on July 10, 1948 they filed the main suit here involved seeking a reformation of their policies which would deprive respondent Graff of any benefits thereunder. In connection therewith they deposited in the registry of the court the full amounts of their several policies aggregation $59,500.
The brief of the appellant insurance companies states: "There being no dispute between any of the parties as to the right of Thomas F. Stephens, Trustee, to collect the $59,500 of insurance monies, the parties stipulated without prejudice that said monies which had been paid into Court should be paid over to Stephens, Trustee, and by him to Iaconetti, mortgagee; and by Court order of December 17, 1948, the sum of $59,500, representing the total amount of all the polices was paid to Stephens, Trustee, and by him to Iaconetti, Mortgagee, on December 22, 1948."
The brief of counsel for respondent Graff answers that the italicized portion of this quoted statement "is obviously incorrect, because the plaintiff insurance companies' major contention, and the very basis of their theory in the litigation brought by them, was that Thomas F. Stephens, as trustee in the deed of trust — i. e., as trustee (or agent) for both the mortgagor and mortgagee — was not entitled to collect the $59,500 insurance money, and that such money was for the use and benefit of the mortgagee only, to the exclusion of the mortgagor."
On this disputed point the appellant insurance companies' brief cites paragraph 21 of the trial court's decree, and the respondent Graff's brief cites paragraphs 19 and 20 thereof. Paragraph 21 did find, that on December 17, 1948, pursuant to a filed stipulation of the parties, the trial court ordered the fund of $59,500 previously deposited in court by the plaintiff insurance companies to be paid over forthwith to the defendant Thomas F. Stephens, trustee in the deed of trust mentioned and described in the plaintiff insurance companies' petition; and further ordered that Stephens as trustee pay the same over to the defendant Iaconetti — this to be without prejudice to any right or claim of any of the parties to the suit brought by the insurance companies; and that on December 22, 1948 Stephens as such trustee did pay the money over to the defendant Iaconetti.
On the other hand paragraphs 19 and 20 of the trial court's decree, cited by respondent Graff, stated the following. Paragraph 19 found that under the terms of the appellant insurance companies' policies it became their duty within 60 days after receipt of proofs of loss to pay to Stephens as trustee the amounts due on their several policies. Next, it further found the companies failed to do so, but instead vacillated as to their reasons for failing and refusing to pay until July 10, 1948, when they brought their suit to reform the policies and from time to time deposited the amounts of their policies into court on the condition that the monies so paid were for the sole use and benefit of the defendant Sam Iaconetti and the defendant Stephens as his trustee, to the exclusion of the respondent Graff — who owned the land and building and had procured the policies and paid the premiums on them.
Paragraph 20 of the decree found the action of the insurance companies in refusing for six months to pay the proceeds of their several policies of insurance to the defendant Thomas F. Stephens as party of the second part and trustee in the deed of trust securing Iaconetti, and the filing by the companies of the suit against Stephens et al., of which this appeal is an outgrowth, were "groundless and baseless both in law and in fact." Continuing, the decree stated the suit was brought by the plaintiff companies in an effort to avoid liability on their part to the defendant-respondent Graff and to defendant Stephens as agent and trustee for Graff under the deed of trust securing Iaconetti, and under the policies they had issued, and that it was all done without reasonable cause or excuse, in bad faith, and was harassing and vexatious.
The decree in the original case was rendered on November 13, 1950. It denied relief to the seven plaintiff insurance companies and awarded separate judgments in favor of the defendant Thomas F. Stephens, Trustee, and against the several plaintiff insurance companies for the amounts due on their respective policies with interest plus penalties for vexatious delay and attorney fees under Section 375.420 RSMo 1949, V.A.M.S., subject to a credit in favor of each company for the face amount of its policy [all totaling $59,500] which amounts they had already paid into the trial court, and that court on December 17, 1948, had ordered paid over to the defendant Thomas F. Stephens, as party of the second part and trustee in the deed of trust securing the defendant Sam Iaconetti. Said amounts were so paid over on December 22, 1948. The decree further directed trustee Stephens to apply the insurance monies and other sums collected to the payment of respondent Graff's note and deed of trust to Iaconetti, any remaining balance to go to Graff.
As stated at the outset the issue in this case arises on the appeal of the Home Indemnity Company from a judgment against it for $22,000 as surety on the appeal bond given by the several plaintiff fire insurance companies on their appeal in the original case reported in 248 S.W.2d 648. The judgment against them in that case was rendered on November 13, 1950. It was affirmed by this court on April 17, 1952, and our mandate was received and filed by the circuit clerk on May 29, 1952. Thereafter on June 10, 1952, the judgment creditor Thomas F. Stephens, Trustee, assigned the judgment to the respondent George N. Graff, and that assignment was filed in the cause on June 24, 1952. On the same day Graff filed a motion for judgment against the Home Indemnity Company as surety on the appeal bond, which was sustained by the trial court on June 27, 1952, after a hearing and judgment rendered against the Indemnity Company for $22,000 and costs.
As shown in the table in the original case, 248 S.W.2d loc. cit. 652, the trial court rendered judgment against the seven insurance companies for the amounts of their several policies, totaling $59,500, and also for interest thereon totaling $851.66. The judgment was rendered November 13, 1950. The interest was computed from April 30, 1948 to July 10, 1948, the latter being the date on which the companies had filed their suit, except as to one company. Lloyd's of London, which entered the litigation later. As to it the interest was computed to August 1, 1948. Apparently the starting date for the computation of interest was set at April 30, 1948 because the fire on which the insurance claims were based occurred on or about January 1, 1948, and under their policies the companies were entitled to 60 days notice and proof of loss, and had 60 days thereafter to pay the claims. This would make 120 days, or four months running to and including April 30, 1948.
The table erroneously shows the interest to be $854.66.
Thereafter on December 17, 1948, pursuant to a filed stipulation of the parties, the trial court ordered that the fund of $59,500 which the insurance companies had deposited in court be paid to Thomas F. Stephens as trustee in the deed of trust securing defendant Iaconetti [mentioned in the second paragraph of this opinion], and that Stephens pay the same to Iaconetti without prejudice to any right of claim of any of the parties to the cause. This was done on December 22, 1948. The cause remained pending, and was heard and decided against the insurance companies nearly two years later on November 13, 1950. They appealed, giving a supersedeas bond, and this court affirmed the decree below on April 17, 1952. Trustee Stephens thereupon assigned the judgment to the respondent Graff on June 10, 1952, and he claims interest thereupon from the date thereof, November 13, 1950 to May 29, 1952 when the mandate of this court was filed in the circuit court. It is stated in the brief for respondent Graff that the amount of interest actually due exceeds the penal sum of $22,000 specified in the appellant surety company's appeal bond, being $25,944.19.
The appellant Indemnity Company's brief maintains first that there is no common law right to recover interest, and that the right is purely statutory. It cites Section 408.040, RSMo 1949, V.A.M.S., which provides that "Interest shall be allowed on all money due upon any judgment or order of any court, from the day of rendering the same until satisfaction be made by payment, accord or sale of property". [Emphasis ours.]
On this legal premise the Indemnity Company argues there was no "money due" from the insurance companies within the meaning of the statute when the trial court entered its decree of November 13, 1950. The thread of the argument is that long before that in the July and August, 1948 the insurance companies had paid into court their respective portions of the $59,500 insurance, and that all the parties had stipulated without prejudice that the money should be paid over to Thomas F. Stephens, Trustee, and by him to Iaconetti the mortgagee. And this was done on December 22, 1948 pursuant to an order of the trial court dated December 17, 1948.
But that payment by the insurance companies had a string tied to it. While they had paid the amount of their policies into court, and had stipulated without prejudice to any of the parties that it be used to discharge Iaconetti's mortgage notes against Graff's land, yet they claimed a right of subrogation to recover it back from Graff although he had paid the premiums on the policies. He was a party to the suit and claimed the insurance protected him. That was the main issue when the case was here before, 248 S.W.2d loc. cit. 649-650, and it was decided in favor of Graff.
We find no error in paragraph 17 of the trial court's decree holding that the defendant Thomas F. Stephens, as party of the second part and trustee in the deed of trust executed by defendant Graff, and as the insured named in the several policies of insurance issued by the plaintiff companies, was and is the trustee and the agent for both the owner and holder of said deed of trust [Iaconett] and the maker thereof [defendant Graff].
We reach the same conclusion as to the remaining paragraphs of the decree holding the insurance companies were duly notified of the fire loss covered by their policies; that they then became duty bound to pay the amounts of their several policies to Thomas F. Stephens, as such trustee; and that when they deposited the proceeds of said policies into court they wrongfully and vexatiously imposed the condition that the same should be for the sole use and benefit of the defendant Iaconetti, to the exclusion of the defendant Graff.
In the instant case the brief for respondent Graff cites cases construing Section 408.040 RSMo 1949, V.A.M.S., supra, which provides that interest shall be allowed on all money due upon any judgment or order of any court from the day of rendition until satisfaction be made, at 6% interest. The statute has been construed almost literally in Kennard v. Wiggins, 353 Mo. 681, 687(3), 183 S.W.2d 870, 872(4). Likewise it is stated in State ex rel. Southern R.E. F. Co. v. City of St. Louis, 234 Mo.App. 209, 213, 115 S.W.2d 513, 515(2), that where the judgment against a debtor is affirmed by an appellate court, "then in order to satisfy it he must pay, not only the face of the judgment, but all interest which has accrued from and after the date of entry of the judgment."
Appellant's reply brief argues that since the plaintiff insurance companies paid the amount of their policies, $59,500 into the registry of the court when [or about when] they filed their declaratory judgment suit in July, 1948, they should not be charged with interest on that sum over the period until our mandate was filed in the trial court on May 29, 1952. But they deposited that money solely for application to Iaconetti's mortgage notes then amounting to about $69,000, and still litigated to a conclusion their contention that their policies did not cover respondent Graff, against whom they claimed a right of subrogation.
We have reached the conclusion that the judgment and decree of the trial court were correct, and for that reason they are affirmed.
All concur.