Opinion
No. 28535.
September 15, 1953. As Modified on Denial of Rehearing October 16, 1953.
APPEAL FROM THE ST. LOUIS CIRCUIT COURT, WALDO C. MAYFIELD, J.
Not to be reported in State Reports.
Anderson, Gilbert, Wolfort, Allen Bierman, by William R. Gilbert, St. Louis, for Mercury Ins. Co.
Willson, Cunningham McClellan, by J. H. Cunningham, Jr., St. Louis, for Sun Ins. Office, Ltd.
Remmers Remmers, by Oliver T. Remmers, St. Louis, for respondents.
This is an action on two fire insurance policies for a loss sustained by reason of damage by fire to the household furniture, furnishings and personal property belonging to the plaintiffs. The loss caused by the fire amounted to $7,750. The defendants claim that the insured property was also covered by another insurance company and that by reason of a "pro rata liability" clause of their respective contracts they are each liable for only one-fourth of the loss. Each defendant paid into court one-fourth of $7,750.
The case was tried to the court upon an agreed statement of facts. The court found for the plaintiffs and awarded them a judgment in the sum of $7,750 against both defendants. Both defendants have appealed to this court.
In view of the fact that the judgment is for $7,750 and the Supreme Court is vested with jurisdiction "in all cases where the amount in dispute, exclusive of costs, exceeds the sum of seventy-five hundred dollars", Mo.Const. 1945, Art. 5, Section 3, V.A.M.S., Section 477.040, RSMo 1949, V.A.M.S., it should be noted that the "amount in dispute" is not the amount of the judgment. The defendants have paid into court half of the amount sued for, which leaves in dispute only the sum of $3,875. The amount in dispute, as a basis of appellate jurisdiction, is the amount that actually remains in dispute between the parties at the time of the appeal; the amount in controversy to be determined by the appeal. Jackson v. Merz, 358 Mo. 1212, 219 S.W.2d 320, loc. cit. 321; Lemonds v. Holmes, 360 Mo. 626, 229 S.W.2d 691; Ewing v. Kansas City, 350 Mo. 1071, 169 S.W.2d 897.
The agreed statement of facts as it is pertinent to the issues involved is in substance as follows: The plaintiffs were owners of certain personal property located in their dwelling at 631 East Polo Drive, in St. Louis County, Missouri. The property had a value in excess of $20,000. It was insured by defendant Mercury Insurance Company and defendant Sun Insurance Office, Ltd., each having issued to the plaintiffs a policy of fire insurance in the amount of $10,000 on January 5, 1950, for a period of three years. Both of these policies contained the following clause: "Pro rata liability. This Company shall not be liable for a greater proportion of any loss than the amount hereby insured shall bear to the whole insurance covering the property against the peril involved, whether collectible or not."
At the time the policies were issued J. G. Taylor Spink had another policy of insurance which by its terms did not expire until October 31, 1951. This policy was issued by the Rhode Island Insurance Company and was what is known as a "floater" policy. It insured against all risks of loss to Spink and members of his family, including fire, and it contained no pro rata liability clause, but, on the contrary, stated.
"Unless otherwise endorsed hereon, no other insurance against the risks hereby insured is permitted on the property covered hereunder except as to property described under Paragraphs 4(a) and (b), 5(b) and (c), 6(b) and (c). If at the time of loss or damage, there is any other insurance which would attach on the property described in Paragraphs 4(a) and (b), 5(b) and (c), 6(b) and (c) had this policy not been effected, then this insurance shall apply only as excess insurance over all such other insurance whether valid or not and in no event as contributing insurance."
(None of the property classified in the paragraphs mentioned is involved in this case.)
On March 26, 1950, a fire occurred which damaged the insured property to the extent of $7,750, and Spink notified the defendants of the fire.
On May 8, 1950, the Rhode Island Insurance Company wrote to its local agent the following letter:
"We wish to acknowledge your letter of April 29th enclosing report of adjusters, MacKay Mooney, in connection with the captioned claim.
"Under the Agreement of Guiding Principles this company is liable for their proportion of the claim under the basis of contributing insurance.
"Will you, therefore, instruct the adjusters to proceed accordingly."
The Agreement of Guiding Principles referred to in the letter is a written agreement between a number of insurance companies, including the defendant companies and the Rhode Island Insurance Company. Among other things, the agreement deals with the liability, of the signing companies, on floater policies. It covers the question of a pro rata liability with fire insurance companies in the payment of fire losses for property covered by both types of policies. The plaintiffs, of course, were not parties to the agreement. After the above letter was written the Rhode Island Insurance Company was placed in the hands of a receiver, who declined to proceed with the agreement to prorate the loss, writing in part as follows:
"In view of the policy violation in that there was specific insurance without knowledge of this company we do not feel there is any liability attaching to the Rhode Island."
On October 5, 1950, the plaintiffs filed their proofs of loss with both defendant companies listing the policies written by the two defendants as the policies to which the loss was to be apportioned. The defendants declined payment upon that basis, but each offered to pay one-fourth of the agreed amount of the loss which would be $1,937.50. This sum was paid into court by each of the defendant companies after suit was brought.
Upon the foregoing facts the court entered judgment holding "that the plaintiffs have and recover of the defendants the sum of $7,750.00, with interest thereon at the rate of six per cent per annum from March 26, 1950, together with the costs of this proceeding, and that execution issue therefor."
The main contention of the appellants is that since the plaintiffs carried the $20,000 policy with Rhode Island Insurance Company and a $10,000 policy with each of the defendants, each defendant is liable for only one-fourth of the loss under the pro rata liability clause. As stated, this clause limits the insurer's liability to the ratio that it bears to the total insurance covering the risk. The basic question to be considered is whether or not there was any insurance of the property by the Rhode Island Insurance Company. If there was not, then of course the only insurers are the two defendant companies which must each bear one-half of the loss. The first part of the clause in the policy issued by the Rhode Island Insurance Company which states that no other insurance against the risk insured is permitted, is the only part with which we are concerned and such a clause was construed by this court in Kossmehl v. Miller Nat. Ins. Co. of Chicago, Ill., 238 Mo.App. 671, 185 S.W.2d 293, 295, wherein we stated:
"The policy provided that it was made in consideration of the stipulations contained therein. The stipulation in question provided that `No other insurance is permitted on the property insured hereunder during the term of this Policy except as may be endorsed hereon.'
"An agreement that there shall be no other insurance is material to the risk as a matter of law. Dolan v. Missouri Town Mutual Fire Ins. Co., 88 Mo.App. 666. We cannot view the agreement other than as an express warranty by the insured that no other insurance was or would be carried by her on the property in question, and since defendant's policy was in full force and effect at the time the Dubuque policy was taken out, the latter policy was voidable for that reason.
"Nor do we agree that a breach of the provision would not render the policy voidable because the policy did not provide for a forfeiture for its breach. * * *
"Since the Dubuque policy was not enforceable at the time of the loss, it was not other insurance which would defeat liability on defendant's policy."
The facts in the above case are dissimilar to those under consideration in that the policies there considered both contained a clause prohibiting other insurance. If, however, the first policy was not enforceable and not other insurance which would defeat liability on the defendant's policy in that case, there appears to be no reason why the Rhode Island Insurance Company policy should, under its terms, be considered other insurance in this case for the purpose of prorating the loss.
On facts quite analogous to those we are considering the Supreme Court held in Cox v. Home Ins. of New York, 331 Mo. 10, 52 S.W.2d 872, loc. cit. 876, as follows:
"It is no injustice to an insurance company to have to pay, in case of loss, the amount of insurance for which it has collected premium, unless there is some valid reason to the contrary. Of course, the insured should not be allowed to collect more than his real loss, which, under our statute, may be fixed by the contract, though not so here, and where there is more than one valid and existing policy covering the same loss, such loss should be prorated. There is no good reason, however, why mere colorable insurance, invalid in fact, should reduce the amount covered by a valid policy."
Defendants, however, state that there has been a waiver of the provision against other insurance. This rather anomalous claim might give rise to the question of the right of a stranger to the contract of insurance to assert a waiver of its provisions, had there been a waiver, but the facts disclose none. It is true that before a receiver was appointed for the Rhode Island Company one of its officers wrote to its local agent and stated that the company would pay its pro rata share of the loss, but the letter did not refer to liability under the policy. It stated: "Under the Agreement of Guiding Principles, this Company is liable for their proportion of the claim under the basis of contributing insurance." It is obvious that the liability that the company agreed to assume was under an entirely different agreement and one to which the plaintiffs were not parties. Whatever the "Agreement of Guiding Principles" may be, and it was not before the court, it could in no way affect the rights of the plaintiffs nor the insurer's obligation to them under its policy. It was another contract and if it is enforceable the right to enforce it still rests with the defendants who were parties to it.
The defendants also assert that since the Rhode Island Insurance Company made no refund of any portion of the premium paid by Spink it waived the provision of the policy. We are cited to State ex rel. Northwestern Nat. Ins. Co. v. Trimble, 323 Mo. 458, 20 S.W.2d 46; Block v. United States Fidelity Guaranty Co., 316 Mo. 278, 290 S.W. 429; and Marsden v. Williams, Mo.App., 282 S.W. 478. These cases for the most part have to do with a forfeiture asserted by the insurer against the insured. The insurer is held by these cases to have waived a forfeiture by reason of a failure to return the unearned premiums at the time it disclaimed liability for the loss. We have no such situation here. The policy was not forfeited and, while it was not in force as to the loss here involved, it continued, by its terms, to insure as excess insurance property not damaged and also continued to cover other risks not covered by the defendants' policies.
Since the Rhode Island Insurance Company policy did not cover plaintiffs' loss by reason of its terms, or any waiver of them, the defendants must bear the full loss.
As stated, the court entered a judgment against both defendants for the total amount of the loss and the defendants claim that it erred in so doing. We do not know upon what theory both defendants were joined in one action, when each had a separate contract with the plaintiffs, but no point was made of that. Each defendant filed a separate answer and each made its separate tender into court but the theory of the defense interposed was common to both. The case was tried in the same manner as it would have been had separate suits been brought on each policy and the causes consolidated. There is, however, no doubt that each contracted to pay only its pro rata share of the loss and was liable for no more than that. The liability of the defendants was therefore several, as they contend, and in order that the judgment should conform to the proof it should charge the liability of each defendant separately.
It is also asserted that the court erred in allowing interest from the date of the loss. The policies provide:
"The amount of loss for which this Company may be liable shall be payable sixty days after proof of loss, as herein provided, is received by this Company and ascertainment of the loss is made either by agreement between the insured and this Company expressed in writing or by the filing with this Company of an award as herein provided."
The amount of the loss was agreed upon December 3, 1950. Sixty days after this date is the time when the interest awarded should run. Zimmerman v. Southern Surety Co., Mo.App., 241 S.W. 95; Wood v. General Ins. Co. of America, 229 Mo.App. 296, 77 S.W.2d 167.
For the reasons stated, it is the recommendation of the Commissioner that the judgment be reversed and that the cause be remanded with directions to enter a judgment in favor of the plaintiffs against defendant Mercury Insurance Company in the sum of $3,875, with interest at the rate of six per cent from February 1, 1951, and a judgment against the Sun Insurance Office, Ltd., for the same amount, bearing interest from the same date.
The foregoing opinion of WOLFE, C., is adopted as the opinion of the court.
The judgment of the circuit court is accordingly reversed and the cause remanded with directions as recommended by the Commissioner.
BENNICK, P. J., and ANDERSON and ARONSON, JJ., concur.