Capitol Fixture & Supply Co. v. National Fire Ins. Co. of Hartford, 17435

• Decision Date: 24 January 1955
• Docket Number: No. 17435,17435
• Citation: 131 Colo. 64,279 P.2d 435
• Parties: CAPITOL FIXTURE & SUPPLY COMPANY, a Colorado Corporation, Plaintiff in Error, v. NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, Defendant in Error.
• Court: Colorado Supreme Court

Page 435

279 P.2d 435

131 Colo. 64

CAPITOL FIXTURE & SUPPLY COMPANY, a Colorado Corporation, Plaintiff in Error, v. NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, Defendant in Error.

No. 17435.

Supreme Court of Colorado, En Banc.

Jan. 24, 1955.

Gelt & Grossman, Hornbein & Hornbein, Denver, for plaintiff in error.

January & Yegge, Denver, for defendant in error.

HOLLAND, Justice.

Defendant in error, a fire insurance company, on May 1, 1946 and November 30, 1946, issued its policies in the amount of $16,000 to Frieda I. and Lloyd E. Hall, owners of a restaurant business in Fort Collins, Colorado. Fixtures therein were sold to the owners on April 22, 1946 by plaintiff in error, a fixture and supply corporation, which took back a chattel mortgage for the sum of $3,173.03, representing the unpaid balance of the purchase price. This chattel mortgage was placed of record in Fort Collins, the county seat. A fire which destroyed the restaurant and fixtures occurred December 20, 1946. No mention of the mortgagee was made in the policies in any manner. The city fire chief attended the fire and determined that it had been started in nine different places in the restaurant; that there was evidence of kerosene about the premises; he concluded that the fire was of incendiary origin; and this was made known to an officer of the fixture company.

The owners signed a non-waiver agreement on February 4, 1947 in which it was provided that the insurance company might proceed with an investigation without an estoppel or a waiver of the rights of any of the parties. Standard provisions in the policies were: Proof of loss be furnished the insurer within sixty days; that no suit or action be sustainable unless commenced within twelve months next after the inception of the loss; and further that no action for any claim could be sustained unless all requirements of the policy had been complied with. Forms for proof of loss were supplied the owners, and, on February 27, they furnished the insurer with a duly acknowledged proof of loss in which it was stated: That the fire started from unknown circumstances; that 'insured was the sole, absolute and unconditional owner of the property described * * * and no other person or persons had interest therein, either as mortgagee or otherwise; that no encumbrance of said property existed, nor has since been made; nor has there been any change in the title, use, operation, location or business of said property;' and there was a further statement that the premises were occupied under a lease. Representatives of Fire Company's Adjustment Bureau made their investigation, and on March 25, 1947 rejected the proof of loss on several grounds, namely: That the proof did not refer to the insuring company; that the proof of loss was not rendered to the insurance company within sixty days after the alleged loss as provided in the policies; that the document does not reflect the knowledge and belief of the assured as to the origin of the loss; that the company is entitled to a full explanation of the circumstances; and finally, the failure to recite the fact of an encumbrance on the property involved.

Almost three years after the fire this suit was instituted, in which the fixture company, as plaintiff, prayed for judgment on the note--secured by the chattel mortgage--given by defendants, as owners, who confessed judgment on that date against them in favor of plaintiff in the sum of $3,023.03, plus interest and attorney fees. Thereafter plaintiff fixture...