Ratliff v. Virginia Surety Co.

Seawell, J. The crux of appellant’s defense lies in the assumption that the motor and serial numbers endorsed- on the policy in the description of the White truck which was the subject of the insurance constitutes the whole and only description in the policy and that the truck is therefore unidentifiable. Obviously the defendant could not succeed in avoiding the policy if the subject of the insurance was identifiable, as between the insured and the insurer, by other descriptive insignia that may be resorted to in the policy of insurance, or which might in the case of an ambiguous description be shown by evidence aliunde. In that event it seems clear upon the face of this record that there is no necessity of resort to the equitable proceeding of alleging and proving a mutual mistake; because the defective description does not extend to any matter fundamental to the scope of the liability or the rate of premium which the plaintiff paid for and defendant received under the policy. The ambiguity here consists in the fact that the motor and serial numbers endorsed upon the policy were those of a truck formerly owned by the insured but which at the time of the insurance was a dismantled wreckage incapable of use of any sort upon which risk or liability could attach under the policy, — a wreck from which the usable parts had been taken away. We think this makes it clear that if the incorrect numbers had not been those of another car theretofore owned by plaintiff, it might readily be conceded that the partial misdescription would not be such a defect as to defeat recovery. G.S. 58-30, cited infra. The defendant cannot argue that the ambiguity thus raised will subject it to danger from liability from the use of a car bearing the listed numbers, and at the same time argue that no ambiguity exists which might be explained by evidence aliunde, as in any other sort of contract. The demurrer admits the truth of all the allegations of the complaint; and among them the truth of all the allegations of other identifying marks of description or insignia by which the truck, the subject of the insurance, could be identified; and with this acknowledges whatever right the plaintiff may have to use extraneous evidence in identification should it become necessary. There is little doubt about the effectiveness of this principle inter partes. With technicalities stricken out for the moment, we find the gist of plaintiff’s cause of action lies in the fact that he and the defendant Casualty Company joined in a mutual contract for liability insurance on a live and usable car, then owned by plaintiff, a 1937 Model White Truck, with the immediate expectation that it would be used in service, and by such use might become a source of liability, — a risk which the insurer assumed, and for which the insured paid. There is no possibility of a unilateral mistake so far. The defendant could not commend itself to a sense of common fairness or add much credit to the business practices [170] of the company by denying this, and contending that it was the mutual intent of the parties to contract for liability insurance on a piece of junk or wreckage which had been at the time of the insurance stripped of all usable parts, and demand for such service the payment of a substantial premium. The demurrer admits that there were only two White trucks concerned in this controversy: The one above described as a 1937 model White truck then owned by the plaintiff, and a former truck of that description which had become defunct. The live terms used in the insurance policy, the ownership of the car, its make and other correct descriptions in the policy, and all the circumstances surrounding the making of the contract, become vital and distinctive as identifying parts of the description,— and those most nearly connected with the liability and risk undertaken and the security purchased by the payment of the premium. Appellant, therefore, cannot proceed on the assumption that the serial numbers mentioned constitute the entire description of the truck insured in the policy. If this were true the description might be so material as to be vital; because the truck would then be unidentifiable except for the figures. That is not the case.' The parties did not agree on an abstraction,' — a floating insurance, to hover over and descend upon any car having these numbers; or, to put it as the plaintiff does in his brief, the defendant did not insure a number. The insurance was on a concrete, tangible, existing thing, identifiable by the other description; and as we have said, it does not call for equitable correction, since it does not call into question any fundamental consideration affecting either risk or coverage such as was considered in Coppersmith v. Ins. Co., 222 N.C. 14, 21 S.E. 2d 838. (This case related to a deductible clause for $1,000 alleged to have been put in the insurance by fraud of defendant and by mutual mistake.) See provisions of G.S. 58-30 (Chapter 58, Insurance) : “All statements or descriptions in any application for a policy of insurance or in the policy itself shall be deemed representations and not warranties; and a representation, unless material or fraudulent, will not prevent a recovery on the policy.” Rudd v. Casualty Company, 202 N.C. 779, 164 S.E. 345, supports the position of the plaintiff; and under the facts of this case evidence aliunde may be admitted to clarify the ambiguity produced by the use of wrong-motor and serial numbers used in the description. We think that justice-lies with the plaintiff and thus far is not inconsistent with law. The case of Kostecki v. Zaffina, 384 Ill. 192, 51 N.E. 2d 152, is pertinent, and we think correctly reasoned. In that case there was a similar-contention of the conclusiveness of the motor and serial numbers as fixing the identity of the trucks concerned; and the holding in that case merits [171] our approval. See also Fucaloro v. Standard Surety and Casualty Co., 225 Iowa 437, 280 N.W. 605, and other cases therein cited. We are not at this moment concerned as to what may be revealed when the case is tried. The complaint is sufficient to survive the demurrer. The judgment overruling the demurrer is Affirmed.