{ "id": 1447048, "name": "The Aetna Casualty & Surety Company v. Jackson", "name_abbreviation": "Aetna Casualty & Surety Co. v. Jackson", "decision_date": "1942-02-23", "docket_number": "4-6662", "first_page": "839", "last_page": "847", "citations": [ { "type": "official", "cite": "203 Ark. 839" }, { "type": "parallel", "cite": "159 S.W.2d 461" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "54 Am. St. Rep. 297", "category": "reporters:state", "reporter": "Am. St. Rep.", "opinion_index": 0 }, { "cite": "35 S. W. 428", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "62 Ark. 348", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1905638 ], "opinion_index": 0, "case_paths": [ "/ark/62/0348-01" ] }, { "cite": "90 S. W. 850", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "77 Ark. 57", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1499063 ], "opinion_index": 0, "case_paths": [ "/ark/77/0057-01" ] } ], "analysis": { "cardinality": 779, "char_count": 15820, "ocr_confidence": 0.488, "pagerank": { "raw": 5.663806401086183e-08, "percentile": 0.35298776106251756 }, "sha256": "878cdc3d0c259a7b2b4fd9ba439f286fbe2a8537c112899f40c06e58388a035a", "simhash": "1:f602d8b2e02eb43c", "word_count": 2545 }, "last_updated": "2023-07-14T23:00:45.785345+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "The Aetna Casualty & Surety Company v. Jackson." ], "opinions": [ { "text": "Grieein Smith, C. J.\nAppellee Jackson is engaged in the liquor business at Malvern. He puichased a Buick sedan February 28, 1939. Twelve $34.45 payments were financed through General Motors Acceptance Corporation. A requirement was that fire and theft insurance be carried for benefit of the loan company as its interest might appear. This protection was written by General Exchange Insurance Corporation.\nJune 24, 1939, Jackson borrowed $500 of Malvern National Bank. The Buick was mortgaged as security. General Exchange issued its indorsement recognizing this transaction.\nWhen the policy issued by General Exchange expired at noon February 28, 1940, the bank called attention to the matter; whereupon Jackson authorized The Automobile Insurance Company of Hartford, Conn., to insure the car. A policy dated March 8, 1940, was delivered to the bank. It contained a loss payable clause in favor of this mortgagee.\nMarch 25,1940, Jackson paid the collecting agent of General Motors Acceptance Corporation $7.79 as premium on an extension of the insurance carried by General Exchange, the coverage being from February 28 to May 28, a period of three months.\nThe evening of May 27, Jackson lent his car to \u201cDusky\u201d Rhodes, whom he had regarded as a friend for four years. Rhodes drove into the country and returned with the explanation that upholstery around the dome light caught fire from what must have been 'a short circuit. He later confessed to having intentionally burned the car, and was indicted on a charge of arson. , Between May 27 and trial of the suits from which the instant appeal comes, Rhodes was killed in an automobile wreck. Jackson was indicted and acquitted.\nThe insurance companies contend that on March 23, 1940, Jackson mortgaged the Buick to secure $400 due Abe Gr. Sherry for liquor.\nThe three companies\u2014General Exchange Insurance Corporation, Aetna Casualty & Surety Company, and The Automobile. Insurance Company of Hartford\u2014were sued, the amount demanded being $435.16.\nThe Automobile Insurance Company paid the bank $312.17 and took an assignment of Jackson\u2019s note and mortgage.\nIn his proof of loss Jackson did not reveal there was double insurance, nor did he mention the Sherry mortgage.\nIn its answer General Exchange pleaded that other insurance had been procured, and that liens had been wrongfully created.\nAetna denied issuance of a policy.\nThe Automobile Insurance Company, like General Exchange, pleaded double insurance and unauthorized liens. It also filed a cross-complaint against Jackson for the amount it had paid the bank and for salvage received by Jackson from General Motors Acceptance Cor-, poration. Automobile Insurance also filed cross-complaint against General Exchange for half the amount it had paid the bank, in the event Jackson should recover against it.\nTrial to jury resulted in a verdict against each of the insurance companies for $435.16, with penalty of 12 per cent, and $200' as attorney\u2019s fee. No relief was granted The Automobile Insurance Company on either of its cross-complaints. It appeals from the principal judgment, and from the court\u2019s refusal to give judgment on the cross-complaints. General Exchange and Aetna have also appealed.\nThe Judgment Against Aetna.'\u2014It is impossible to determine what the jury\u2019s views were as to any single phase of the controversies. For example, its verdict finds Aetna liable; yet this company did not issue a policy.. The policy issued March 8 is captioned: \u201cThe Aetna Casualty and Surety Company. The Automobile Insurance Company of Hartford, Connecticut.\u201d Liability of the companies is apportioned.\nUnder coverages \u201cA\u201d (bodily injury) and \u201cB\u201d (property damage) Aetna is the insurer if a premium is paid for that class of protection. Under coverages \u201cC,\u201d \u201cD,\u201d \u201cE,\u201d and \u201cF,\u201d The Automobile Insurance Company is the insurer. \u201cO'\u201d is related to comprehensive material damage, excluding collision or upset, for which a premium of $13.75 was paid. \u2022 Aetna and Automobile Lisurance severally contracted with Jackson, the provision relating to Aetna being that the company should be the insurer \u201c. . . with respect to any one or more of coverages \u2018A\u2019 and \u2018B\u2019 for which a premium is specified and charged in Item 3 of.the declaration.\u201d Since no premium was paid for coverages \u201cA\u201d or \u201cB,\u201d no liability attaches to Aetna. In the second place, bodily injury, as contemplated by coverage \u201cA,\u201d is not involved, and property damage contemplated by coverage \u201cB\u201d is that which the insured becomes obligated to pay \u201c. . . by reason of the liability imposed upon him by law for damages because of injury to or destruction of property.\u201d No such liability has been imposed upon Jackson.\nGeneral Exchange\u2014Its Defense.\u2014Neill Sloan, representing General Motors Acceptance Corporation, collected $42.59 from Jackson March 25, 1940, two days after Jackson borrowed from the bank. The monthly payment of $34.45 was discharged. Notations on the receipt are: \u201cThirty-day ex., 35c; three mo. in., $7.79; principal, $34.45.\u201d\nJackson testified Sloan was collecting for the acceptance corporation. He did not know whether Sloan was connected with General Exchange. Sloan was quoted as threatening to repossess the car unless insurance was renewed with General Exchange. Jackson \u201cbelieved\u201d one payment was past-due, but had not requested an extension of time. This statement was modified by the explanation that he did not remember whether a request for extension had, or had not been made.\nAfter March 25 Jackson made two additional payments. When asked whether Sloan represented the acceptance corporation, Jackson replied: \u201cHe didn\u2019t say. I paid him the insurance on the car ['because] he asked for it.\u201d Jackson also testified he told Sloan the car was insured with another company. The policy indorsement is dated May 28. It shows premium payment of $7.45.\nSloan testified three installments were delinquent \u2019 when Jackson made the March payment. The receipted item of 35 cents was interest on a 30-day extension. Insurance was $7.79. He admitted \u201crequiring\u201d Jackson to renew the insurance.\nIt is argued on behalf of Jackson that because he paid Sloan $7.79 for insurance, and the so-called \u201crider\u201d shows the premium was $7.45, the difference of 34 cents was a commission, and Sloan, or the acceptance corporation, profited to that extent.\nSloan ascertained that Jackson had mortgaged the car to the bank. He did not, however, know other insurance had been procured. His testimony in this respect and testimony of Jackson are in conflict. Sloan admitted having* forwarded Jackson\u2019s insurance premium, and said he informed General Exchange regarding the bank loan. General Exchange directed Sloan to make an investigation. The information was received April 5.\nThe acceptance corporation took charge of the car salvage and paid Jackson $57.60, representing the difference between salvage and the amount Jackson owed the corporation.\nWhether Jackson told Sloan he had other insurance, and whether he disclosed or concealed existence of the bank loan, were questions for tbe jury. As to General Exchange, the bank mortgage and coverage by Automo bile Insurance Company were waived. At least we cannot say there was not substantial testimony upon which the findings could be predicated.\n\u25a0 The Automobile Insurance Company.\u2014Jackson does not contend he informed this appellant when the policy with General Exchange was purchased March 25, or' that the information was given at a later period. Hence, there\u2019 was no waiver of contractual terms which would render the policy inoperative if additional insurance should be procured, or if an unauthorized mortgage were executed.\nSherry\u2019s Mortgage.\u2014Two defenses are interposed: no obligation existed in favor of Sherry, and Sherry was not Jackson\u2019s creditor. An indebtedness of several years\u2019 duration ran in favor of Harry Hastings. Sherry, according to Jackson, was salesman for Moon Distributing Company. Hastings had charge of the distributing company\u2019s business. Jackson had been sued by Hastings.\nJackson\u2019s version of the transactions is that Hastings drew a mortgage, and he (Jackson) refused to sign it. Hastings was told the car had been pledged to the bank, and that a balance was due acceptance corporation. Jackson\u2019s testimony was that he signed the mortgage in blank, after telling Hastings it should cover a building and liquor store fixtures.\nA photostatic exhibit discloses Abe G. Sherry as mortg\u2019agee. The only property pledged is \u201cone Buick automobile, motor number 43636325, sedan 41, serial number 1345836.\u201d It recites an indebtedness of $400, evidenced by note dated March 23, 1940, payable without interest at the rate of $20 each Saturday. Upon default of two consecutive payments the entire debt \u201c. . . may be declared immediately due and payable by the said Abe G. Sherry.\u201d Acknowledgment was by C. A. Metrailer, notary public. Jackson denied knowing Metrailer. He also denied having acknowledged the mortgage.\nJackson insists that because Hastings\u2019 name appears to have been written on that part of the mortgage which becomes a caption when the document is folded, appearing on the outside as \u201cC. W. Jackson to Abe G. Sherry,\u201d (followed by a space for the clerk\u2019s filing notations) there is a circumstance showing substitution of Sherry for Hastings. It is apparent that \u201cHarry Hastings\u201d has been partially erased, and \u201cAbe G. Sherry\u201d overwritten. But the mortgage proper contains no such erasure. The conveyance was to Sherry, and Jackson admits the signature. It is only insisted in avoidance that the automobile was substituted for property Jackson told Hastings he would pledge, and that Sherry\u2019s name was written on the blank in the second line. Jackson claims to have paid $140 on the liquor bill \u201c. . . after I had the argument about it.\u201d\nAlthough service was had upon Sherry at the instance of General Exchange, he was absent when the cases were tried. Motion for continuance was overruled when Jackson agreed that Sherry, if present, would testify the $400 note and mortgage were executed in his favor in good faith, delivery having been made March 23; that when the car was burned $82 had been paid, leaving a balance of $318. June 8, 1940, there was an additional payment of eight dollars. Marginal indorsements on the mortgage indicate payments: March 30, $20; April 13, $20; April 29, $20; May 25, $22; June 8, $8.\nJackson\u2019s testimony regarding the liquor bill is in conflict. As heretofore quoted, he denied having at any time owed Sherry. This statement is reasserted. Yet in denying execution of the mortgage he said: \u201cI want to make an explanation. I owed Abe Sherry and Harry Hastings\u2014\u201d.\nJackson contended he came to Little Rock (318 Third St.) where an attorney had papers for bim to sign. An' emphatic statement regarding the mortgage is: \u201cI didn\u2019t owe [Sherry] a dime and didn\u2019t pay him eight dollars.\u201d\nWhether Sherry\u2019s name was substituted for that of Hastings after the mortgage had been signed in blank, and whether the automobile was pledged when Jackson\u2019s instructions were that other property be listed and the car be excepted\u2014these were questions upon which the jury had a right to pass. The triers of facts could also believe Jackson\u2019s testimony that he did not owe Sherry a dime and did not pay him eight dollars. But Sherry\u2019s agreed testimony went further. He claimed three 20-dollar payments and one item of 22 dollars. These correspond with indorsements on the mortgage, and were not specifically denied by Jackson.\nThere may have been unauthorized substitutions in the mortgage, and Jackson may not have paid the eight dollars credited in June; yet if he recognized the mortgage after its erroneous execution and paid 82 dollars to Sherry, the fact of payment would constitute ratification. Sherry was Hastings\u2019 agent, and Hastings represented Moon Distilling Company. The obligation to Hastings is conceded. Jackson\u2019s testimony that he did not owe Sherry \u201ca dime\u201d might be accepted as true and still the obligation of the mortgage could subsist if Sherry were acting for Hastings or the distilling company.\nThere are too many suggestive circumstances to justify an appellate court in disposing of the issues with the easy declaration that only questions of fact are involved. The relationship between Jackson and Rhodes is shown to have been such as to negative a presumption that a grudge existed, or that Rhodes intended to injure Jackson financially through destruction of- the property.\n\u201cDusky\u201d had previously used Jackson\u2019s car. The loaner\u2019s cordial attitude toward the arsonite seems to have been reciprocated. Why, then, did Rhodes become a pyromaniac and utilize his base talents at the precise time consequences might be expected to buoy the insured\u2019s bank balance? The known answer died with the destroyer.\nBut is it merely coincidental that the match was applied so soon before the policy issued by .General Exchange lapsed? Was it an inadvertence that proof of loss sent by registered mail to each of two insurance companies failed to disclose the other\u2019s risk? and that cause of the loss was not stated, although the form upon which proof was made provided space for this purpose.\nThe policy issued by Automobile Insurance Company provides that it shall be void if the interest of the insured in the automobile . . be or becomes other than unconditional and sole lawful ownership.\u201d A similar provision in the policy issued by General Exchange is that the company shall not be liable for loss or damage to any property insured while subject to any lien, mortgage, or encumbrance.\nThese stipulations, unless waived, are enforcible. Such was the holding in Rhea v. Planters\u2019 Mutual Insurance Association, 77 Ark. 57, 90 S. W. 850. A further holding was that an unrecorded mortgage worked a forfeiture, it being good' between the parties. See, also, German-American Insurance Company v. Humphrey, 62 Ark. 348, 35 S. W. 428, 54 Am. St. Rep. 297. It was there held that the act of \u201cplacing\u201d the mortgage avoided the policy, although the debt secured by -it was paid before loss occurred.\nIt is our view that Jackson\u2019s testimony regarding the Sherry transaction was hot of the substantial nature justifying a verdict that the mortgage was not ratified by payments. Identity of Sherry as a representative of Hastings, and the showing that Hastings had charge of Moon Distributing Company\u2019s business, \u201ctie in\u201d with the admitted indebtedness of $400 to Hastings. The court, therefore, should have instructed that a mortgage valid between the parties had been executed without knowledge of the insurers.\nResult of this determination is that judgment should have been rendered against Jackson in favor of Automobile Insurance Company on the note it purchased from Malvern National Bank for $312.17, with interest from August 9, 1940. Such judgment is given here. Cost in both courts is adjudged against appellee. It is so ordered.\nA New York stock company authorized to do business in Arkansas.\nThe policy issued by General Exchange carried, in conspicuous print, a stipulation that it shall not be valid unless countersigned \u201cby the duly authorized agent of the company at Little Rock.\u201d The agent was Elizabeth Shaver.\nThe insurance was written by J. A. Burch, the company\u2019s agent at Malvern.\nThe name appears in the record as \u201cHostens\u201d and \u201cHastings.\u201d\nC. A. Metrailer, according to the mortgage, is in Pulaski county. [Records in the office of the secretary of state show that a commission was issued C. A. Metrailer February 1, 1939, and expires February 1, 1943.]\nTranscript, p. 60.\nTranscript, p. 58.", "type": "majority", "author": "Grieein Smith, C. J." } ], "attorneys": [ "John Sherrill, Hoioard Gochrill, Thomas R. Vaughan and Barber, Henry S Thurman, for appellants.", "H. B. Means, for appellee." ], "corrections": "", "head_matter": "The Aetna Casualty & Surety Company v. Jackson.\n4-6662\n159 S. W. 2d 461\nOpinion delivered February 23, 1942.\nJohn Sherrill, Hoioard Gochrill, Thomas R. Vaughan and Barber, Henry S Thurman, for appellants.\nH. B. Means, for appellee." }, "file_name": "0839-01", "first_page_order": 857, "last_page_order": 865 }