Arizona Fire Ins. Co. v. Dillingham

• Citation: 23 Ariz. 508,205 P. 589
• Decision Date: 05 April 1922
• Docket Number: Civil 1855
• Parties: ARIZONA FIRE INSURANCE COMPANY, a Corporation, Appellant, v. C. D. DILLINGHAM, Appellee
• Court: Supreme Court of Arizona

205 P. 589

23 Ariz. 508

ARIZONA FIRE INSURANCE COMPANY, a Corporation, Appellant, v. C. D. DILLINGHAM, Appellee

Civil No. 1855

Supreme Court of Arizona

April 5, 1922

APPEAL from a judgment of the Superior Court of the County of Maricopa. R. C. Stanford, Judge. Reversed.

Messrs Ward & Griffith, for Appellant.

Messrs Kibbey, Bennett, Gust & Smith and Mr. A. T. La Prade, for Appellee.

OPINION

ROSS, C. J.

This is a suit by the insured, C. D. Dillingham, to recover from the insurance company a fire loss. The policy, running for one year, was dated March 3, 1919, and covered a stock of general merchandise which was destroyed by fire on May 24 1919. The insurance company refusing to pay the loss, suit was instituted for the full amount of policy, $2,000, fifteen per cent penalty, and reasonable attorneys' fees. The insurance company filed a general attorneys' fees. The insurance company filed a general demurrer to the complaint. It also set forth in its answer that the insured, before the fire, had sold and delivered possession of the stock of merchandise to one J. E. Anderson, who continued to carry on the business, selling and replenishing the stock of goods; that said sale and delivery of possession to Anderson was without the knowledge or consent of the insurer. It is alleged that such sale violated that clause of the contract of insurance against any change in the interest title, or possession of the property without the consent of insurer. There were other defensive matters in the answer, but this statement will present the vital questions at issue. The jury returned a verdict for the full amount of the insured's claim. Whereupon the court entered judgment for $2,000 damages, and the statutory fifteen per cent penalty. The court, after taking proof, allowed attorney's fees in the sum of $400. The defendant, insurance company, appeals from the judgment, and from the order refusing a new trial.

From the conclusion we have come to, it will be necessary for us to consider but one of the errors assigned. At the close of the case the appellant moved the court for an instructed verdict, and we think the court's refusal to grant it was error. One of the conditions of the insurance policy was:

"This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void . . . if any change, other than by the death of an insured, take place in the interest, title, or possession of the subject of insurance (except change of occupants without increase of hazard) whether by legal process or judgment or by voluntary act of the insured, or otherwise. . . . "

It is not contended that the appellant consented to, or knew of, any change in the interest, title, or possession of the subject of insurance from appellee to anyone else.

The appellant attached to its answer as an exhibit, and also introduced in evidence to sustain its contention that the appellee had sold the stock of merchandise and delivered possession thereof to one J. E. Anderson, the following agreement:

"An Agreement of Sale.

"This agreement made and entered into this 1st day of May, 1919, between C. D. Dillingham, hereinafter designated the 'first party,' and J. E. Anderson hereinafter designated the 'second party' . . . witnesseth: That,

"Whereas, the first party the owner of a stock of mixed merchandise consisting of groceries, hardware, dry goods and drugs, situated three miles north from Tolleson, Maricopa County, Arizona, in the store building known as 'West End Store' and now occupied by first party under a lease on said building; and said first party being also the owner of the following described land, to wit, NE. 1/4 of Sec. 6, Tp. 12 N., range 26 W. Ind. M., in the state of Oklahoma, and the county of Rodger Mills, and consisting of 160 acres. Second party is the owner of 160 acres of land in Beckham county, state of Oklahoma and described as NE. 1/4 of Sec. 26, Tp. 11 N., R. 22 W. of Ind. M.:

"Therefore, said first party contracts to sell unto the second party for the consideration hereinafter stated, the stock of merchandise hereinbefore described, and to give second party immediate possession thereof. The said second party agrees to assume indebtedness of first party for scales, oil tank, one ton truck and stock of merchandise herein described to the amount of twelve hundred fifty ($1,250) dollars. It being understood that if first party should elect to retain the scales referred to, that the amount of indebtedness assumed by second party shall be eleven hundred fifty ($1,150) dollars and no more. That the first party assumes all other indebtedness that may be against said stock of merchandise.

"First party further agrees that as soon as he can conveniently obtain his abstract of title to the lands hereinbefore described as belonging to him, and which abstract shall show a complete title in him, to deed the same to second party by good and sufficient deed therefor, free from all encumbrances of whatsoever nature. And in consideration of the foregoing covenants by the first party hereto, the second party hereto agrees to make a good and sufficient deed to first party to the lands hereinbefore described as belonging to second party, said deed to show the lands so deeded to be free from all encumbrances except a mortgage thereon in the sum of fifteen hundred ($1,500) dollars which said encumbrance the first party hereto agrees to assume. "It is mutually understood between both parties hereto, that the abstracts of title to said land shall be obtained in a reasonable time from this date, and, should any latent defects in the title of either of said two tracts of land be found, then said party that now holds the title to said tract, and who is hereby contracting and selling the same to the other party, shall have, and it shall be his duty to remove said defects therefrom. It is further understood that by the taking possession immediately of the stock of merchandise hereinbefore described, the party of the second part shall apply all moneys received from sales thereof for the purpose of replenishing said stock of goods and liquidation of the said sum of twelve hundred fifty ($1,250) dollars until the said sum of twelve hundred fifty ($1,250) dollars is fully paid and discharged.

"It is further understood and agreed that the lands that are hereby contracted to be exchanged between the parties hereto, each have crop tenants thereon for the year 1919, and that this contract carry the right of immediate possession to each of said tracts of land to each of the respective parties hereto upon the signing hereof, subject to the rights of said tenants. It is further understood that should the said indebtedness be less than $1,250, that second party will pay the difference between the sum of indebtedness and that of $1,250.

"Witness our signatures hereto the day above written.

"C. D. DILLINGHAM,

"J. E. ANDERSON."

The day of the date of the above agreement Anderson took charge of the West End Store and stock of merchandise and continued in charge thereof until May 24th,...