The opinion of the court was delivered by: John E. Miller, Chief Judge.
This is an action by Preferred Risk Insurance Company,
hereinafter referred to as Preferred, and Vivian S. Andres,
Executrix of the Estate of Suzanne Sage, deceased, against
Central Surety & Insurance Corporation, hereinafter referred to
as Central, or defendant, arising out of an automobile liability
insurance policy allegedly issued by Central to the deceased,
Suzanne Sage. The case was originally filed in the Circuit Court
of Clark County, Arkansas, and duly removed to this court.
Preferred is an Arkansas insurance corporation, having its
principal place of business at Fayetteville, Arkansas. Vivian S.
Andres, Executrix of the Estate of Suzanne Sage, deceased, is a
citizen of the State of Arkansas. Central is an insurance
corporation organized under the laws of the State of Missouri,
with its principal place of business in Kansas City, Missouri.
The matter in controversy exceeds the jurisdictional amount,
exclusive of interest and costs.
In the complaint it is alleged that defendant issued an
automobile liability insurance policy insuring Suzanne Sage
against liability arising out of bodily injury sustained by third
persons in the operation of her 1958 Rambler automobile, the
limits of liability being $10,000 for one person, $20,000 for one
accident, and $5,000 property damage; that the policy also
insured the occupants of the automobile for medical, including
funeral, expenses, arising out of injuries sustained by the
occupants of the car,
and that said policy was in effect from May 20, 1959, until
November 20, 1959.
It is further alleged that the plaintiff Preferred likewise
issued an automobile liability insurance policy on May 20, 1959,
insuring for a one-year period the deceased against the same
risks and in the same amounts as the defendant's policy.
Plaintiffs further contend that on June 7, 1959, while both
policies were in force and effect, Miss Sage was driving the
insured automobile and was involved in an automobile accident
which caused her death, along with the death of one of the
passengers in the other automobile involved in the collision.
Several occupants of the Sage car and of the other car were
injured. After the accident the plaintiff, Vivian S. Andres,
Executrix, notified both Central and Preferred of the accident
and of claims arising out of it. Central declined to defend said
action and denied liability under its policy. Preferred appeared
and defended the litigation, and paid a total judgment of
$17,750, plus costs. Preferred now seeks to recover one-half of
this sum from Central under the applicable co-insurance provision
contained in each policy. The plaintiff Andres seeks to recover
the sum of $456 as funeral expenses paid in connection with the
death of Suzanne Sage. Preferred also seeks to recover one-half
of the attorneys' fees and litigation expense, and both
plaintiffs pray for the statutory 12 percent penalty, along with
reasonable attorneys' fees in this action.
In its answer to the complaint, the defendant Central denies
that the collision between the automobile driven by Suzanne Sage
and the Sowell automobile, driven by Thomas R. Sowell, "occurred
at a time when any policy of insurance issued by this defendant
was in force." The defendant further alleges "that if any
insurance policy ever became effective between defendant and
Suzanne Sage, that the same was canceled by mutual agreement
prior to the collision which occurred on June 7, 1959."
Prior to the trial of the case the parties entered into the
"The parties hereto, by their attorneys, stipulate
"1. On May 20, 1958, Greening Insurance Agency of
Hope, Arkansas, an authorized local agent of Central
Surety & Insurance Corporation, prepared and mailed
to Miss Suzanne Sage of Hope, Arkansas, a document
entitled Family Automobile Policy and bearing Serial
No. AC136771. Described therein as the owned
automobile was a 1958 Rambler. The policy period
stated therein was from May 20, 1958 to November 20,
1958. The Limits of Liability described therein were
$5,000.00 for bodily injury liability to each person,
$10,000.00 for bodily injury liability on each
occurrence, $5,000.00 for property damage liability
on each occurrence and $500.00 medical payments for
each person. The premiums set out therein were
seasonably paid by Miss Sage.
"2. Thereafter and prior to expiration of the
policy period described in the document referred to
in Paragraph 1 hereof, Greening Insurance Agency, as
agent for Central Surety and Insurance Corporation,
prepared and mailed to Miss Sage a document entitled
Family Automobile Policy and bearing Serial No.
AC163646. The owned automobile and Limits of
Liability were described in the same manner as in the
document described in Paragraph 1 hereof. The policy
period described in the document bearing Serial No.
AC163646 was from November 20, 1958, to May 20, 1959.
The premiums set out therein were seasonably paid by
Miss Sage. A photostatic copy of this document is
attached as Exhibit A to this Stipulation.
"3. On or about May 8, 1959, and prior to the
expiration of the policy period referred to in the
described in Paragraph 2 hereof, Greening Insurance
Agency, as agent for Central Surety and Insurance
Corporation, prepared and mailed to Miss Sage a
document entitled Family Automobile Policy and
bearing Serial No. AC181275. The policy period
described therein was from May 20, 1959, to November
20, 1959. The owned automobile described therein was
the same as described in the documents referred to in
Paragraphs 1 and 2 hereof. The Limits of Liability
referred to were $10,000.00 for bodily injury
liability to each person, $20,000.00 for bodily
injury liability on each occurrence, $5,000.00 for
property damage liability on each occurrence and
$500060 medical payments for each person. A
photostatic copy of the document referred to herein
is attached hereto as Exhibit B to this Stipulation.
A bill for the premiums set out in this document was
prepared and mailed to Miss Sage on or about May 18,
and again on or about June 1, 1959.
"4. The premiums referred to in Paragraph 3 were
never paid and the document referred to therein was
never returned to Greening Insurance Agency. Greening
Insurance Agency never mailed a Notice of
Cancellation and no Cancellation Agreement was ever
executed by Miss Sage.
"5. On June 7, 1959, Miss Suzanne Sage, while
driving said Rambler automobile, was involved in a
collision on U.S. Highway No. 67 in Clark County,
Arkansas, which caused her death and the death of
Lauran Sowell and injuries to Richard Sowell, Marrgie
Sowell, and Thomas R. ...