Financial Indemnity Co. v. Murphy

The principal question is, which of two insurance companies is liable for damages resulting from a collision of vehicles; and there is a subordinate question of the damages covered. Each of the insurance companies which are parties to the ease believes that the party claiming to have been insured, Vernice Murphy, was probably insured, but by the other carrier.

Facts

In May 1959, Mrs. Murphy, a resident of Paradise, Butte County, signed an application for a public liability and property damage policy, which contained a $2,000 medical payments indemnity for the insured’s family, with Nugent, the local agent of Farmers Insurance Exchange. She testified she knew that Nugent was agent for Farmers and that Farmers was a good company. The agent, Nugent, told her she was covered when she signed, and Farmers admits that she was. The company decided, however, to cancel the insurance on the grounds that the car was exposed to minor drivers, the applicant was divorced (this was inaccurate), had recently come from another state, was but lately employed, did not own her home, and the ear was old—the last ground being undoubted, for the car was a 1939 Plymouth. Nugent, to save embarrassment,…