MacK International Motor Truck Corp. v. Wachovia Bank & Trust Co.

CoNNOR, J. There was no evidence at the trial of this action tending to show any contractual relation between the defendant, E. EE. Reed, and the plaintiff, Mack International Motor Truck Corporation, with respect to the notes sued on in this action, or with respect to insurance on the trucks described in the complaint against loss or damage by fire. The only cause of action alleged in the pleadings of the plaintiff, and established by the evidence at the trial, in favor of the plaintiff and against the defendant, E. EE. Reed, is for the possession of the trucks, one of which had been delivered to said defendant by his father, J. EE. Reed, and the other by the defendant, Wachovia Bank and Trust Company, executor, after the death of the said J. EE. Reed. In its letter to the defendant, Wachovia Bank and Trust Company, executor, dated 13 January, 1926, in reply to a letter advising plaintiff that E. H. Reed had the trucks in his. possession, and had agreed to assume liability for certain of the notes executed by J. EE. Reed, the plaintiff expressly declined to “look to” the said E. EE. Reed for the payment of said notes. At no time after the trucks sold by plaintiff to J. EE. Reed were delivered *162 into tbe possession of E. H. Reed did tbe plaintiff enter into any contract with tbe said E. H. Reed, with resident to said trucks, or with respect to insurance on tbe same. Nor was there any evidence of any contractual relation between the defendant, E. H. Reed, and bis codefendant, Northern Insurance Company of New York, with respect to insurance on said trucks. Tbe defendant, E. H. Reed, is not named as the assured in tbe policy of insurance offered in evidence at tbe trial, nor in any rider attached thereto. It does not appear from tbe evidence that the defendant insurance Company bad any notice prior to tbe fire that the trucks bad been delivered to the said E. H. Reed, or that tbe said E. H. Reed bad or claimed any interest in them. In tbe absence of evidence tending to show that tbe defendant, Northern Insurance Company, of New York, contracted, directly or indirectly, with tbe said E. H. Reed, with respect to insurance on tbe trucks, tbe latter is not entitled to recover in his cross-action against tbe said insurance company. There is no error in tbe judgment dismissing tbe cross-action of tbe defendant E. H. Reed ag*ainst tbe plaintiff and also bis cross-action against bis codefendant, Northern Insurance Company of New York. In this respect tbe judgment is affirmed. All tbe evidence with respect to tbe cross-action of tbe defendant, Wachovia Bank and Trust Company, executor, against its codefendant, Northern Insurance Company of New York, on tbe policy of insurance offered in evidence at tbe trial of this action, shows that said defendant is barred of any recovery on said policy by reason of tbe breach of and its failure to comply with certain valid and binding stipulations and provisions of said policy. Both tbe said defendant and its testator had knowledge of these stipulations and provisions, and with this knowledge both breached and failed to comply with tbe same. For this reason, by tbe express terms of tbe stipulations and provisions of tbe policy, an action to recover on tbe policy is barred. Tbe testator of said defendant was advised by bis agent, tbe plaintiff, Mack International Motor Truck Corporation, in its letter dated 23 July, 1925, that it bad insured tbe trucks against loss or damage by fire, under a policy of insurance, “tbe terms, conditions and limitations of which are printed on tbe reverse side of this letter for tbe information of all concerned.” There was no evidence tending to show that tbe defendant insurance company bad waived tbe several breaches by tbe defendant and its testator of said stipulations and provisions. There is no error in tbe judgment dismissing tbe cross-action of the defendant, Wachovia Bank and Trust Company, executor, against its co-defendant, Northern Insurance Company of New York. In this respect tbe judgment is affirmed. *163 At the time plaintiff sold the trucks described in the conditional sales agreements attached to the complaint in this action as exhibits, to J. EL Eeed, the said J. H. Eeed, in accordance with the terms of said conditional sales agreements, paid to the plaintiff, as a premium for the insurance of each of said trucks against loss or damage by fire, the sum of $157.45. In consideration of the payment of said sum of money, the plaintiff agreed to insure each of said trucks against loss or damage by fire, for a period of eighteen months, in the sum of $4,900, with the loss, if any, payable to the plaintiff and to the said J. EL Eeed, as their interests might appear at the date of loss. There was evidence tending to show that plaintiff insured said trucks in accordance with its agreement, and that it so advised the said J. H. Eeed. The plaintiff did not advise the said J. H. Eeed, nor did it advise the defendant, "Wachovia Bank and Trust Company, executor of the said J. EL Eeed, after his death and before the date of the fire which injured and damaged said trucks, the name of the insurance company which had issued the policy of insurance. Plaintiff did, however, advise the said J. EL Eeed of the terms, conditions and limitations contained in the policy of insurance which plaintiff had procured. There was evidence tending to show that the said J. EL Eeed, and after his death the defendant, his executor, breached and failed to comply with certain stipulations and provisions of said policy. By reason of said breaches of and failure to comply with said stipulations and provisions, by the express terms of the policy, the defendant, Wachovia Bank and Trust Company, executor, is barred of recovery on the said policy, and is also barred of recovery on the contract of plaintiff to insure said trucks, unless the same have been waived by the plaintiff. With respect to such waiver, the facts shown by the evidence are as follows: After the death of J. H. Eeed, and after the defendant had qualified as his executor, to wit, on 11 January, 1926, the defendant advised the plaintiff that it was informed that E. H. Eeed, the son of J. EL Eeed, claimed that his father had sold or given to him one of the trucks and that he had assumed the payment of the notes of J. EL Eeed for the balance due on the purchase price of said truck. In its letter to plaintiff, dated 23 February, 1926, the defendants advised the plaintiff that it had sold the other truck to the said E. EL Eeed, and had taken a mortgage on same for the purchase price. In this letter, defendant requested plaintiff to have the policies of insurance on the trucks “fixed so that in case of accident or fire, we will be protected, after you have been paid.” To this letter plaintiff replied on 27 February, 1926, advising plaintiff that the trucks were insured, and that “in the event of fire, theft or collision on trucks covered with insurance with this company, the claim of the company would, of course, be paid first, and the balance *164 would then go to the estate of Mr. J. H. Reed.” The trucks were thereafter injured and damaged by fire on 2 July, 1926. After the fire, to wit, on 3 July, 1926, defendant by letter advised the plaintiff of the loss and requested plaintiff “to send proper papers to be signed in regard to the loss.” In response to this letter, plaintiff wrote the defendant on 10 July, 1926, as follows: “With reference to your letter of 3 July, regarding loss by fire of two trucks, Nos. 737906 and 737855, which were operated by the estate of J. H. Reed, deceased. Our insurance adjuster has been advised of this loss, and no doubt will be in Asheville in a short time to make an adjustment.” An adjuster soon thereafter investigated the loss. Both the plaintiff and the Northern Insurance Company of New York, from whom plaintiff had procured the policy of insurance on the trucks, subsequently denied liability to the defendant for the loss which it had sustained by the fire. Plaintiff did not inform the defendant that the policy of insurance on the trucks had been issued by the Northern Insurance Company, until after the expiration of the time within which according to the terms of the policy proofs of loss were required to be filed. On the foregoing facts it was error to nonsuit the defendant, Wachovia Bank and Trust Company, executor, in its cross-action against the plaintiff. The plaintiff with knowledge that the terms of the policy which it had procured for the protection of its- interest and of the interest of the defendant in the trucks had been violated by both J. H. Reed and the defendant, his executor, advised the defendant that the trucks were then insured against loss by fire, and that in the event of loss by fire “its claim would be paid first, and that the balance would then go to the estate of Mr. J. H. Reed.” This information was given to the defendant after it had requested the plaintiff to have the policies on the trucks “fixed” so that its interest in the trucks would be protected in case of accident or fire. If plaintiff failed to have the policies “fixed” as requested by defendant, and as defendant was, in effect, advised had been done, then plaintiff is liable to defendant for the loss which it has sustained as a result of the fire. Case v. Ewbanks, 194 N. C., 775, 140 S. E., 709. The amount of defendant’s loss is the value of its interest in the trucks at the date of the fire. In accordance with this opinion, the judgment is affirmed in the appeal of the defendant, E. H. Reed, and in the appeal of the defendant, Wachovia Bank and Trust Company, executor, except as to the plaintiff. The judgment that the cross-action of the defendant, Wachovia Bank and Trust Company, executor, against the plaintiff be dismissed as of nonsuit is reversed. It is ordered that as to the issues determinative of said cross-action there shall be a New trial.