St. Paul Fire & Marine Insurance v. Chas. H. Lilly Co.

286 P.2d 107, 46 Wash. 2d 840

• Court: Washington Supreme Court
• Decided: October 7, 1955
• Docket: 33003
• Status: Published

Opinions

Mallery, J.

The appellant, The Chas. H. Lilly Company, defendant below, rented a Scoopmobile from Air-Mac, Inc., on a month-to-month basis for five hundred fifty dollars a month. Appellant had paid four months’ réntal when the Scoopmobile was destroyed by fire on June 2, 1952. Appellant had an option to purchase the Scoopmobile at base price of $5,105, plus tax, upon which would be applied all of the first month’s rental, ninety per cent of the second month’s rental, eighty per cent of the third month’s rental, and seventy per cent of the fourth month’s rental. The option was never exercised. The value of the equipment, at the time of its destruction, was stipulated to be four thousand dollars.

Air-Mac, Inc., collected for its loss from respondent insurance company, plaintiff below, and thereupon assigned to respondent its claim against appellant for the loss of the Scoopmobile.

Air-Mac, Inc., is not a party to this action, but the respondent stands in its shoes by assignment. Appellant contends it is entitled to the benefits of respondent’s insurance and relies upon Gillingham v. Phelps, 5 Wn. (2d) 410, 105 P. (2d) 825, which is not in point. The respondent is subrogated to the rights of Air-Mac, Inc., and owes appellant nothing on account of the option. 8 C. J. S. 325, § 42.

The trial court gave judgment for respondent in the amount of four thousand dollars, plus attorneys’ fees of eight hundred dollars and costs.

The first question presented by this appeal is whether or not appellant, which was without fault, was liable to Air-Mac, Inc., for the loss of the Scoopmobile in its possession, under the terms of the written agreement. The instrument itself is decisive of the question, and the common law upon bailments is beside the point. The pertinent language of the lease is:

“3. First Party [Air-Mac, Inc.] hereby expressly warrants that at the time of the execution of this agreement said personal property, above described, is in new condition. Second Party [appellant] covenants and agrees to keep and maintain said personal property in good mechanical condition during the term of this agreement, or any extension or renewal thereof, and upon termination thereof to return to First Party the same in good mechanical condition, save and except the usual wear and depreciation as may be caused by reasonable use and wear thereof.” (Italics ours.)

Language of this general purport has been variously construed throughout the country. The Washington rule is stated in Metropolitan Park Dist. v. Olympia Athletic Club, 42 Wn. (2d) 179, 254 P. (2d) 475. In that case, the language in a letter was:

“ ‘We also agree to use every possible care in handling them and to replace any parts damaged while in our possession and to return them in the same condition in which we received them.’ ”

We said, “the letter recognized a duty beyond that of common-law bailment, amounting to an insurer’s liability.”

Our rule is also the same in landlord and tenant cases, which are analogous. A covenant to return premises at the end of a lease requires a tenant to replace buildings destroyed while in his possession. There appears to be no good reason for differentiating between leases of real and personal property. We adhere to the rule of Metropolitan Park Dist. v. Olympia Athletic Club, supra, and hold the appellant liable for the loss of the Scoopmobile.

Appellant contends that, in any event, respondent is not entitled to the value of the Scoopmobile, which was stipulated to be four thousand dollars, but only the lesser amount, which would be required to exercise the option to purchase.

Appellant is not entitled to benefits under an option it never attempted to exercise. Its position in this case has been the denial of liability in toto. Had it claimed the benefit of the option and tendered the amount provided for, even after destruction of the Scoopmobile, this suit would not have been necessary. Appellant must abide by its own election.

Appellant contends for the allowance of five hundred, dollars attorneys’ fees for respondent, and complains that the eight hundred dollars allowed by the trial court is too much. When attorneys’ fees are allowable by a trial court-to a prevailing party, the amount is within the discretion of the trial court, and we will reverse only for the abuse thereof.

We are not prepared to hold that the difference between the amount conceded by appellant and the amount allowed is great enough to constitute an abuse of discretion.

The judgment is affirmed.

SCHWELLENBACH, HlLL, and ROSELLINI, JJ., concur.