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Commerce Union Bank v. Midland Nat. Ins. Co.

NOVEMBER 13, 1964.

COMMERCE UNION BANK, PLAINTIFF-APPELLEE,

v.

MIDLAND NATIONAL INSURANCE COMPANY AND ROBERT LEWIS ANGEL, DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Clay County; the Hon. RAYMOND O. HORN, Judge, presiding. Affirmed. WRIGHT, JUSTICE.

This is an action on insurance contracts brought by plaintiff, Commerce Union Bank, the assignee, under a conditional sales contract against defendants, Midland National Insurance Company and Robert Lewis Angel, the insurors, for damages to a 1959 Mack tractor caused by fire.

During the trial held before the court, without a jury, the defendants asserted the affirmative defenses of arson on the part of the owner of the vehicle and the failure of the plaintiff to furnish proof of loss under the terms of the policies. At the conclusion of the trial, the trial court ruled that under the terms of the loss payable clause, arson on the part of the owner of the vehicle would not be a defense to this action and the evidence relating thereto was stricken. The court further held that the defense of failure to give proof of loss was not proven.

Judgment was entered in favor of the plaintiff in the amount of $4,998.05 and costs. From this judgment defendants appealed.

The Fourth District Appellate Court in Commerce Union Bank v. Midland Nat. Ins. Co., 43 Ill. App.2d 332, 193 N.E.2d 230, affirmed the ruling of the trial court with respect to the defense of failure to give proof of loss but disapproved the exclusion of the arson evidence by the trial court and reversed and remanded the cause for a new trial for the limited purpose of having the trial court weigh the evidence with respect to arson and render its determination as to the effect of such evidence with respect to the liability of defendants.

Upon rehearing following remandment, the trial court reconsidered the evidence in full, including the evidence with respect to arson erroneously excluded at the previous trial, and found that defendants failed to prove their special affirmative defense of arson on the part of Lionel Burkett, the owner of the vehicle, and entered judgment for the plaintiff in the amount of $4,998.05 and costs.

The opinion of the Fourth District Appellate Court narrowed the issue for the trial court in this case to the single question of whether or not the evidence which had been excluded from the record was sufficient to establish that Lionel Burkett intentionally ignited the fire which caused the damage to the 1959 Mack tractor insured by defendants.

It appears from the evidence in the record that on June 20, 1960, Lionel Burkett was 42 years of age, married and had his home in Flora, Illinois. For about twenty years prior to that date, he had been engaged in the trucking business. He maintained a garage at Xenia, Illinois and had at one time operated about twenty-five trucks. In the last ten years, he had suffered various financial reverses until in June, 1960, he owned only one truck and was working as a farmer with his father. He had taken bankruptcy at one time and shortly before the loss had several outstanding obligations.

On October 2, 1959, Lionel Burkett purchased the 1959 Mack tractor from Neely Coble Company of Nashville, Tennessee. As a part of the purchase price, he executed a conditional sales contract in the amount of $11,673.36 payable in monthly installments of $324.26. The Neely Coble Company assigned its interest in the conditional sales contract to the plaintiff, Commerce Union Bank. At about the same time, the defendant, Midland National Insurance Company issued a policy of insurance providing $5,000 coverage on the vehicle for fire, lightning and transportation, naming Lionel Burkett as the insured and naming Commerce Union Bank as loss payee. Defendant, Robert Lewis Angel, a Lloyds of London underwriter, issued a policy of reinsurance incorporating the Midland National Insurance Company and providing excess coverage to the extent of $9,000.

From October, 1959, until the middle of May, 1960, this 1959 Mack tractor was used by Lionel Burkett under contracts with various freight lines. In May, 1960, the tractor needed repairs and since the owner, Lionel Burkett, was farming with his father and had no regular driver, the unit was taken out of service. The tractor was kept at Xenia, Illinois, until the first part of June, 1960, when it was removed to a farm owned by Eber Burkett, the father of Lionel, and stored in a metal clad frame garage. At this time, Lionel Burkett was two months in arrears on the payments under the conditional sales contract and plaintiff had begun proceedings to repossess the tractor.

On the afternoon of June 20, 1960, Lionel Burkett and his father were planting beans on the farm where the tractor was stored. At about 5:30 or 6:00 o'clock p.m., Lionel Burkett was in the garage where the tractor was stored. At this time, the tractor was not damaged and the windows of the cab were rolled down and the doors to the garage were open. He closed the garage doors and returned to the bean field. At about 8:30 or 9:00 o'clock p.m. a storm came up and Lionel Burkett and his father, Eber Burkett, stopped planting beans. Lionel left the farm and returned to his home in Flora, Illinois. During the trip to Flora, it was raining hard and thundering and lightning. He next returned to the farm at about 10:00 or 10:30 o'clock on the following morning and discovered that the cab of the tractor had been gutted by fire. He proceeded to his father's home and the two men returned to the garage and inspected the tractor. Thereafter, they both went to the office of James Reed, the local insurance agent who had sold the insurance policy, and reported the fire.

Although the testimony of the witnesses varies on the physical condition of the garage, there is no conflict in the evidence as to the location and condition of the 1959 Mack tractor on the morning of June 21, 1960. The tractor was setting in the north half of the garage and the inside of the cab was gutted by fire. The glass in the windshield and doors had melted, run down into puddles and recrystalized. The metal door handles and window handles on the inside of the cab doors had melted. The instruments, the materials in the seats, sleeper portion of the cab, and glove compartment were completely destroyed by fire. The aluminum parts next to the firewall were melted. However, the spotlight, which was located on the outside of the left hand door, still had the glass intact and was not broken or melted. The fuel tanks, which were located on the outside of the cab below the floor boards, were not burned. The springs in the seat were still in place.

The uncontradicted testimony as to the garage discloses that it was a building about five or six years old, about thirty-two feet long with posts on eight-foot centers. The roof and exterior of the building was covered with galvanized iron roofing nailed over a wood frame. On the east side of the building were sliding doors which operated on an overhead metal track. The building was wired for 220 electric current, which came in on three wires on the east side of the building above the metal door track. The interior of the building was wired with power outlets and switches around the north side of the building. The building had a pitched roof with three joists evenly spaced. Immediately above the cab of the tractor were two double rafters and one of the joists. The rafters had an area about two feet in length where they were charred and burned next to the sheathing and metal roof, but were not burned on the bottom side. The wood sheathing between the rafters and the metal roofing was burned in this area. The underside of the metal roofing was white and showed evidence of extreme heat. The joist was not damaged by fire. There was no hole or break of any sort in the metal roofing above the burned area. There was loose hay on the floor between the tractor and a work bench, which was not damaged by fire. There was a corn sheller located about three feet from the right side of the cab, which was covered with a tarpaulin. Both the tarpaulin and the chain on the corn sheller were burned.

Lionel Burkett, the conditional purchaser, testified and expressed the opinion that the fire was caused by lightning.

Eber Burkett, the father of Lionel, testified that on June 20, 1960, there were two farm tractors and some shop tools in the garage with the 1959 Mack tractor; that he first saw the fire damage at about 10:00 o'clock a.m. on June 21, 1960, and at that time it looked like the garage was twisted; that prior to June 20, 1960, the building was in good shape; that there were some scorched places ...


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