Case Title: Twin States Insurance Company v. Bush

Citation: 183 So. 2d 891

Docket Number: 

State: mississippi

Court: Mississippi Supreme Court

Date: 1966-03-07T00:00:00Z

Document:
183 So. 2d 891 (1966) TWIN STATES INSURANCE COMPANY v. James Edward BUSH. No. 43813. Supreme Court of Mississippi. March 7, 1966. Sullivan, Sullivan & Walker, Hattiesburg, for appellant. Simrall, Aultman & Pope, Hattiesburg, for appellee. RODGERS, Justice: This case came to this Court from the Circuit Court of Forrest County, Mississippi, in which a jury verdict and judgment were entered in favor of the appellee. Appellant, Twin States Insurance Company, (hereafter referred to as Insurance Company), made a motion for a new trial. The motion was overruled and the Insurance Company appealed to this Court. The record reveals the following facts. James Edward Bush purchased a 1962 Pontiac Bonneville four-door automobile from Roscoe Moore Pontiac Agency. Part of the purchase price was financed by Mississippi Motor Finance, Inc. At the time the loan contract was entered into, appellee purchased an insurance contract from appellant, Insurance Company, insuring the automobile against damages arising out of collision. The policy provided that "Any loss hereunder is payable as interest may appear to the named insured and Home Finance Company or Mississippi Motor Finance, Inc." Section 11 of the insurance policy provides that: *892 The insured automobile was involved in an accident on May 15, 1962, at a time when the insurance policy was in full force and effect, and was damaged in the sum of $1,160.41. While appellee was recuperating from the accident, his automobile was taken to a repair shop operated by Charles Hyde. Appellee learned that the frame of the automobile was bent and that the adjuster-agent of the Insurance Company had been to see Mr. Hyde and they were in a controversy with reference to the repair of the bent frame. Appellee claimed that he had nothing to do with the arrangement for the repair of the automobile, but that in view of the fact that the frame was bent, he decided to trade his damaged automobile. He purchased a new automobile from Roscoe Moore Pontiac Agency and traded the damaged automobile to the company as part payment on the purchase price. He thought that he traded the automobile as a damaged automobile, but later, an insurance adjuster came to his home and asked him to sign a paper. He did not read the paper but admitted that the proof of loss shown him was the paper which he signed. This proof of loss contained the following language: In the meantime, the appellee and the driver of the other automobile involved in the accident signed reciprocal releases. Appellee did not receive any sum of money for the release. After the Insurance Company received the proof of loss, and after the release had been given to the other driver, the Insurance Company issued its check payable to the Mississippi Motors Finance, Inc. and Roscoe Moore Pontiac Agency for the sum due for the repairs to appellee's automobile, less $50 deductible under the terms of the policy. The Insurance Company filed suit against the driver of the other automobile, but dismissed the suit when it learned appellee had given a release to the other driver. It then sued appellee, but did not allege in its declaration, nor did it offer proof that the accident, in which the insured automobile was damaged, was caused, in whole or in part, by the other driver. The appellant, Insurance Company, chose to stand upon the charge that it had paid the cost of repairs to appellee's automobile due to the dealer and finance company; and that it would not have done so if the appellee had not "represented to it that he had executed no release of his claim, that this representation was false and known to the defendant to be false at the time it was made." The testimony shows without dispute that appellee did not know the contents of the proof of loss signed by him, nor that the Insurance Company had paid for the cost of repairs to his damaged automobile, until he was sued by the Insurance Company. No evidence was introduced that appellee was guilty of any actual or willful fraud in signing the proof of loss, or in signing a release to the driver of the other automobile involved in the accident. The issue here is whether or not an insurance company can recover money *893 paid for repairs of an automobile when it discovers that the insured had released the other driver involved in the accident, thereby releasing the insurance company's right of subrogation, without alleging and proving that the other driver caused or contributed to the cause of the accident in which the insured's automobile was damaged. We hold that after the cost of the repairs to the damaged automobile has been paid by the Insurance Company in order for it to recover the money paid, it must allege and prove not only a breach of the contract by the insured but also that the Insurance Company was damaged by the release of its subrogation rights to sue, by showing that it could have recovered from the person to whom the release was given. A general rule on this subject may be found in 29A Am.Jur. Insurance section 1720 at pages 799-80 (1960), wherein the textwriter points out: The textwriter in 46 C.J.S. Insurance § 1209 at pages 159-160 (1946) points out: It is pointed out in 7 Am.Jur.2d Automobile Insurance section 207 at pages 549-50 (1963) that: The textwriter cites the case of Washington Fire & Marine Insurance Company v. Williamson, 233 Miss. 33, 100 So. 2d 852 (1958). In the case of Farmer v. Union Insurance Company of Indiana, 146 Miss. 600, 111 So. *894 584 (1927), the promise of the insurance company to pay Farmer for injury to his automobile was conditioned on its becoming thereby subrogated to his right of action for damages against the person who inflicted the injury thereto. This Court said: The Farmer case was approved in Chandler v. State Farm Mutual Automobile Insurance Company, 200 Miss. 702, 28 So. 2d 571 (1947) where the insured's administratrix released the railroad from liability for damage to an automobile at the time she accepted payment for the death of insured. This release, in effect, destroyed the right of subrogation of the insurer under the conditions of the policy, and this Court said: And this Court pointed out that when the administratrix released the railroad company from all liability in the judgment entered, it rendered the claim of the insurance company worthless against the railroad without the consent of the insured. Washington Fire & Marine Insurance Company v. Williamson, 233 Miss. 33, 100 So. 2d 852 (1958), is a case where the insurer brought an action against the insured to recover damages in an amount which insurer had paid insured under the automobile collision policy for damage to insured's automobile as the result of a collision with an automobile of a third party upon the ground that the insured had given a third party release in violation of the subrogation agreement. This Court said: Later, in the case of the United States Fidelity & Guaranty Company v. Covert, 242 Miss. 1, 133 So. 2d 403 (1961), this Court pointed out: In that case, however, we recognized the rule set out in Washington Fire & Marine *895 Insurance Company v. Williamson, 233 Miss. 33, 100 So. 2d 852 (1958), and stated: The answer in the Covert case, however, admitted the charge in the declaration that insured had an enforcible claim against the wrongdoer. In view of the rule set out in the foregoing authorities, we are of the opinion, and so hold, that the judgment of the trial court should be, and is hereby affirmed. Affirmed. GILLESPIE, P.J., and BRADY, INZER and SMITH, JJ., concur.