Ziegler v. Akin

Federal Mutual Implement & Hardware Insurance Company brought this declaratory judgment action for a determination of its liability under a multiple peril insurance policy which it had issued to the defendant, Fairfax Equipment Company, Inc. The defendant-insured operated a farm equipment and automobile business at three different locations in Fairfax, Oklahoma. The policy insured against loss to the merchandise placed at these three locations, but fixed a separate limit of coverage for each location. A fire destroyed the building and contents at the location having a coverage of $35,000, causing a loss of approximately $60,000. The insurer contended below that its liability could not exceed this $35,000 limit. The insureds theory was that the insurance coverage agreed to by it and the general agent of the insurer contemplated only one limit of coverage applicable to all the merchandise, wherever located, and that in any event, the $35,000 limit was not in force at the time of the fire because of an oral agreement entered into by the president of the insured and the agent of the insurer after the issuance of the policy. A jury returned a verdict for the insured in the total amount of the loss.