Bronx Fire Ins. Co. v. Wasson

• Decision Date: 28 December 1932
• Docket Number: No. 685.,685.
• Citation: 62 F.2d 556
• Parties: BRONX FIRE INS. CO. v. WASSON.
• Court: U.S. Court of Appeals — Tenth Circuit

62 F.2d 556 (1932)

BRONX FIRE INS. CO. v. WASSON.

No. 685.

Circuit Court of Appeals, Tenth Circuit.

December 28, 1932.

Arnold C. Todd, of Wichita, Kan. (James G. Norton, Carl O. Bauman, and Julian E. Ralston, all of Wichita, Kan., and Wendell P. Barker, of New York City, on the brief), for appellant.

Roy H. Wasson, pro se, and C. H. Pugh, both of Wichita, Kan. (E. L. Foulke, of Wichita, Kan., on the brief), for appellee.

Before COTTERAL, PHILLIPS, and McDERMOTT, Circuit Judges.

McDERMOTT, Circuit Judge.

This is an unusual case. A judgment was rendered upon a policy of fire insurance. The insured, at the trial, disclaimed any interest in the policy or the property insured. The policy was issued at the request of a stranger, attached to a draft and sent to a bank for collection of the premium; the insured declined to pay the draft or accept the policy; the bank, upon advice of its counsel, mailed it to the clerk of the court. Recovery was had for the benefit of materialmen whom the state court adjudged were not creditors of the insured. The judgment rendered is for some $3,000 more than the total claims of those in whose behalf recovery was sought, leaving this balance to be paid either to the insured who has disclaimed, or into the registry of the court. The trial court increased the verdict of the jury, after the jury was discharged. There are two bills of exceptions of the proceedings at one trial, an anomaly in federal procedure; yet neither incorporates the charge to the jury, as our rules require. Rule 13. Many errors are assigned. But one need be considered.

The Iago of this unusual drama is one Stoneburner, who, having played his part, vanished from the stage before the trial. He contracted to purchase some building lots in Wichita, agreeing to pay therefor the sum of $374, upon which he paid $2.00 down, the balance to be paid $1.00 a week. At his request the contract ran to one Ferdinand Schroeder of Enterprise, Kansas. There is evidence to the effect that Stoneburner had this contract made out in the name of Schroeder, a friend of his, because of difficulties Stoneburner was having with his wife; other evidence that Schroeder was interested in the enterprise. With this underlying capital investment of $2.00, the construction of an apartment house was undertaken; bills for labor and material in the sum of approximately $5,000 were contracted by Stoneburner. He applied to the recording agent of appellant for a fire policy on the partially constructed building, and asked to have it issued in the name of Schroeder. The agent accepted from Stoneburner a payment of $10.00 to apply on the policy, and upon instructions from him, the agent attached the policy to a sight draft for the balance of the premium, $149.15, drawn upon Mr. Schroeder. This draft was sent to a bank at Enterprise for collection. Upon presentation, Schroeder refused to pay the draft or take up the policy. The policy remained in the files of the bank for about 14 months, when, upon advice of its counsel, it was mailed to the clerk of the trial court.

In the meantime an action was brought in the state court by mechanic's lien claimants to foreclose their liens upon the property, and for judgment against Stoneburner, Schroeder, and others. The appellant was joined in that action, the plaintiff therein alleging that a policy of fire insurance had been issued upon the property, and that the appellant was indebted to Schroeder on account thereof. It was prayed that the court restrain the appellant from paying out on said policy until the further order of the court. There were many interveners; Schroeder disclaimed in writing any interest in the property or in the policy of fire insurance; judgment was eventually rendered in the state court action against Stoneburner for the amount of the claims, foreclosing the lien upon the real estate, and barring Schroeder from any interest therein. Before judgment, however, the appellee was appointed receiver in said cause for the purpose of collecting the proceeds of the fire insurance policy. The state court also made an order upon Schroeder and his wife that they assign any interest in the policy to the receiver, which they did, qualifying the assignment with the statement that it was made in obedience to the order of the court, and "without any claim on the part of the undersigned that they have any right, title, or interest in said policy."

The receiver thereupon brought this action upon the written policy of insurance, alleging a performance of all conditions of the policy, and seeking recovery thereon. The appellant answered under oath denying the delivery of the policy of insurance, denying that Schroeder had any insurable interest in the property, denying that Stoneburner was the agent of Schroeder, and alleging that the sole and unconditional ownership provision of the policy had been violated. A "crosspetition and bill in equity" was filed simultaneously, alleging that the issuance of the policy had been procured by fraud. A reply was filed, taking issue with the allegations in the answer, and alleging affirmatively that it had been decreed by the state court that Schroeder was the owner of the property in question, and that he had negotiated for a settlement of the policy after the fire.

An order was entered carving out the equitable defense pleaded in the cross-petition, which was set down for hearing before the court without a jury. At that hearing, all of the defenses were tried out, legal as well as equitable. The trial court made findings of fact upon all the issues except the amount of the damage, and transferred the case to the law docket for trial. When it came on for trial before the jury, proof was admitted of the amount of the damage; objections were sustained to offers of proof by the appellant to the effect that the policy was not delivered, on the ground that defenses tried out before the court could not be presented to the jury. The jury returned a verdict for $8,000 which the court thereafter, on motion, increased to include interest from...