American Central Ins. Co. v. Ehrlich

• Citation: 65 Colo. 545,177 P. 978
• Decision Date: 06 January 1919
• Docket Number: 9246.
• Parties: AMERICAN CENTRAL INS. CO. v. EHRLICH.
• Court: Colorado Supreme Court

177 P. 978

65 Colo. 545

AMERICAN CENTRAL INS. CO. v. EHRLICH.

No. 9246.

Supreme Court of Colorado

January 6, 1919

Error to District Court, City and County of Denver; John A. Perry Judge.

Action by S. Ehrlich, individually and as trustee for the creditors of A. M. Russell, against the American Central Insurance Company. To review judgment for plaintiff, defendant brings error. Reversed and remanded, with directions.

Sylvester G. Williams, of Denver, for plaintiff in error.

William H. Dickson, of Denver, for defendant in error.

BAILEY J.

This cause is here on writ of error to review a judgment against plaintiff in error, the American Central Insurance Company for $2,055.79, claimed to be due under a mortgage clause attached to a policy of fire insurance issued by that company. One A. M. Russell is beneficiary under the policy and the mortgage clause provides that----

'Loss or damage, if any, under this policy shall be payable to creditors, S. Ehrlich, mortgagee (or trustee) as interest may appear.'

The right is reserved by the company to cancel the policy at any time as provided by its terms; and provides also that in the event of such cancellation the policy shall continue in force for the benefit only of the mortgagee (or trustee) for ten days after notice to such persons. The word 'creditors' was typewritten in a blank space left for the purpose, and the name 'S. Ehrlich' following it was written in with a pen.

The goods covered by the insurance were in a building about to be opened by Russell as a general store, in Dalhart, Texas. Ehrlich is a resident and citizen of Denver, Colorado. The policy was issued by local agents of the company at Dalhart on February 25, 1916. Four days later it was cancelled by the general agents of the company, and the premium, less thirty-seven cents to cover insurance for four days, was returned to Russell. At the time of the return of the premium Russell signed the following relinquishment:

'February 29, 1916.

'I, A. M. Russell, do hereby relinquish my right and title to any interest or claim on a fire insurance policy issued by The American Central Insurance Company of St. Louis Mo. Said policy stands cancelled. Same being Policy No. 4002. Issued by the Dalhart agency.

'A. M. Russell, Insured.'

Somewhat to the left of the signature of Russell appears the name 'S. Ehrlich,' and below it, opposite the word 'Witnesseth,' is the name, 'J. D. Meler,' one of the local agents of the company. It appears that the policy was not surrendered at that time for the reason that it had been delivered to Ehrlich, and sent by him to Denver.

Eight days after this cancellation the goods covered by the policy were destroved by fire. Ehrlich claimed compensation under the mortgage clause upon the theory that under it he had an insurable interest which would be protected for ten days after cancellation of the policy. The company denied liability, whereupon suit was brought and Ehrlich secured judgment as above stated. In this opinion the parties will be designated as they were in the trial court.

A number of errors have been assigned by defendant; but in disposing of this case it will be necessary to consider only...