Sun Insurance Co. of New York v. Aetna Insurance Co. of Hartford

98 N.W.2d 692, 169 Neb. 94, 1959 Neb. LEXIS 117
CourtNebraska Supreme Court
DecidedOctober 23, 1959
Docket34568
StatusPublished
Cited by23 cases

This text of 98 N.W.2d 692 (Sun Insurance Co. of New York v. Aetna Insurance Co. of Hartford) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sun Insurance Co. of New York v. Aetna Insurance Co. of Hartford, 98 N.W.2d 692, 169 Neb. 94, 1959 Neb. LEXIS 117 (Neb. 1959).

Opinion

Messmore, J.

The Sun Insurance Company, a corporation, insti *96 tuted this action in the district court for Dodge County as plaintiff, against the Aetna Insurance Company, a corporation, Mercantile Credit Company, a corporation, and Platte Valley Bank of North Bend, a corporation, as defendants. By order of the court, Illinois Appleton & Cox, Incorporated, and certain Underwriters at Lloyds of London were brought into the case as additional parties. The purpose of the action was to obtain a declaratory judgment to adjudicate plaintiff’s liability and the division of any award money among claimants upon the statutory motor vehicle dealer’s bond furnished by Lumir L. Urban, a motor vehicle dealer, pursuant to the provisions of section 60-606, R. R. S. 1943, and sections 60-601, 60-611, and 60-619, R. S. Supp., 1955. Cross-petitions were filed by all of the defendants praying for judgment on the bond. The trial court rendered judgment in favor of the plaintiff and against the defendants and dismissed the defendants’ cross-petitions. Motions for new trial were filed by all of the defendants, and all were overruled. Defendants perfected appeal to this court.

For convenience we will refer to the parties as follows: Defendant Aetna Insurance Company, as Aetna; defendant Mercantile Credit Company, as credit company; defendant Platte Valley Bank of North Bend, as the bank; Illinois Appleton & Cox, Inc., if required, as Appleton & Cox; John Alfred Halford, representative of the Underwriters, as Halford; and Lumir L. Urban, who is not a defendant, as Urban.

We summarize the pleadings of the respective parties and eliminate therefrom certain facts which are covered in detail in the statement of facts appearing later in the opinion.

The plaintiff’s petition alleges that in December 1955, Urban, an individual doing business as Urban Motors in Fremont, applied for a license to sell new and used cars, signed a bond as principal, and the plaintiff signed the bond as surety; that on December 6, 1955, a license *97 as a motor vehicle dealer for the year 1956 was issued to Urban by the proper authorities; that the bank carried a policy of insurance with Aetna, protecting the bank against loss on loans secured by chattels by reason of its failure to have the loans on automobiles endorsed on the certificates of title thereto; that under the terms of the policy, Aetna paid the bank $5,000 to reimburse it in part for the loss sustained on Urban loans; and that Aetna claims that it is subrogated to the rights of the bank in the amount of $5,000 by virtue of the terms of said insurance policy on a loan receipt which Aetna took at the time of its payment of such amount to the bank.

The plaintiff further alleges that the defendants have made claims against the plaintiff in varying amounts, as set forth in the petition, totaling $20,270; that each defendant claims it is covered by the bond of Urban which was signed by the plaintiff as surety for him although said claims of the defendants arise out of loans made on automobiles to Urban by defendants; and that there has arisen between the plaintiff and said defendants an actual controversy as to the rights, liabilities, duties, and legal relationships as between the plaintiff and defendants, and more particularly, the controversy between defendants and plaintiff that defendants claim said bond covers the loan of money by defendants to Urban for the purpose of purchasing automobiles for Urban. Plaintiff alleges it is not liable on the bond because the bond does not cover the seller of an automobile to Urban, or lenders of money to Urban, and that the bond is limited to and only for the protection of purchasers of automobiles from Urban.

The petition prays for judgment against the defendants; that a declaration and determination be made declaring the rights, duties, liabilities, responsibilities, and legal relations between the plaintiff and defendants; that it be determined that the plaintiff is not liable on the bond for the reasons stated; that the court declare the *98 bond only protects purchasers of automobiles from Urban because of the violation of any of the provisions of the bond; that the court declare and determine that defendants loaned money to Urban and therefore have no claim under the bond; and that in no event can liability of the plaintiff exceed $10,000, and if it should be discovered that there are legal claims of more than $10,000 against plaintiff under the bond, that the court then pro rate said claims allowing to each defendant its proper percentage of $10,000.

The credit company, in its answer and cross-petition, alleges that Urban, as a licensed automobile dealer covered by the plaintiff’s bond, caused this defendant to suffer a loss in the sum of $9,870, which loss was caused because of the false and fraudulent representations and deceitfulness of Urban in representing the purchase of automobiles as before set forth in this pleading (which facts appear in the opinion); that Urban failed to comply with the provisions of his license and the laws of this state; and that as a result of said failure and the false representations this defendant has been damaged, which damage is a proper claim against the bond described in the plaintiff’s petition, for which this defendant prays judgment in the amount of $9,870, together with interest, costs, and attorney’s fees.

The answer and cross-petition of Appleton & Cox and Halford, representative of certain underwriters, alleges that the underwriters paid the credit company $3,500, being the maximum loss on one borrower, on the policy of insurance issued by this cross-petitioner to the credit company; that by virtue of said payment to the credit company, Halford is subrogated to any rights of the credit company to the extent of such payment; and that under the provisions of the bond, the defendants are entitled to recover from the plaintiff because of the violations of the statutes. They pray judgment in behalf of the credit company and Halford in the amount of $10,000, and costs.

*99 The answer and cross-petition of Aetna and the bank alleges that on October 22, 1956, October 30, 1956, and November 28, 1956, the bank made loans of money to Urban for the purchase of automobiles; and that the bank required Urban to execute separate notes and trust receipts in its favor for the amount of the purchase price of each automobile and required Urban to deposit with the bank the original certificates of title to each automobile signed or endorsed in blank. This pleading then alleges certain facts relating to false and fraudulent representations made by Urban to the bank, and the borrowing of money from the bank for the purchase of automobiles.

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Bluebook (online)
98 N.W.2d 692, 169 Neb. 94, 1959 Neb. LEXIS 117, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sun-insurance-co-of-new-york-v-aetna-insurance-co-of-hartford-neb-1959.