Charada Inv. Co. v. Trinity Universal Ins. Co.

• Decision Date: 30 November 1936
• Docket Number: 26097.
• Citation: 62 P.2d 722,188 Wash. 325
• Parties: CHARADA INV. CO. v. TRINITY UNIVERSAL INS. CO.
• Court: Washington Supreme Court

62 P.2d 722

188 Wash. 325

CHARADA INV. CO. v. TRINITY UNIVERSAL INS. CO.

No. 26097.

Supreme Court of Washington

November 30, 1936

Department 1.

Appeal from Superior Court, Pierce County; W. O. Chapman, Judge.

Action by the Charada Investment Company against the Trinity Universal Insurance Company. From a judgment of dismissal with prejudice, plaintiff appeals.

Reversed and remanded, with direction to grant a new trial.

Guy E. Kelly, of Tacoma, for appellant.

Whittemore & Truscott and Harold A. Seering, all of Seattle, for respondent.

MILLARD Chief Justice.

This action was instituted for the reformation, and recovery thereon as so reformed, of a burglary insurance policy on a safe and its contents. Its demurrer was overruled, whereupon defendant answered and the cause proceeded to trial. The trial court, sitting without a jury, entered a judgment of dismissal with prejudice, following the sustaining of a challenge to the sufficiency of plaintiff's attorney's opening statement and demurrer thereto. Plaintiff appealed.

Appellant a domestic corporation, conducted a public market in which it leased space to several persons who operated stores therein. Appellant kept a safe in which were sixteen compartments some of which were used by appellant's tenants for the safekeeping of their cash and other valuable property.

According to the complaint, respondent's agent visited appellant's place of business and was fully advised that a policy of insurance was desired which would protect valuables in the safe during all times, and particularly during business hours when the safe doors would remain open. The agent agreed to furnish such a policy. Thereafter, on January 19, 1934, respondent issued, and by its agent delivered, to appellant a burglary insurance policy which appellant believed and respondent's agent described and represented to appellant contained the protection promised. Appellant paid the premium charged, and on or about March 22 1934, respondent caused to be attached to the policy a special indorsement reading as follows: 'It is hereby understood and agreed that this policy covers property of others as covered under Item 14 while the said property of others is held by the assured for safekeeping; subject, nevertheless, to the limitations and conditions of the policy.'

On or about June 27, 1934, appellant's safe was burglarized by actual force and violence and by the use of tools leaving visible marks thereof, and money and other property were stolen. The property so taken belonged to one of appellant's tenants who assigned his cause of action against respondent to appellant. The prayer of the complaint asks that the policy be reformed so as to conform to the intent of the parties and that it be decreed that the policy cover all loss by burglary from any compartment within appellant's safe when the compartment burglarized was locked at the time and regardless of whether the outer door of the safe is locked or unlocked. A demurrer to the amended complaint was overruled.

Respondent answered, admitting the issuance and acceptance of the policy of insurance and the payment of the premium, but denied generally the remainder of the material allegations.

When the cause came on for trail, appellant's attorney made an opening statement in which he said that the president of appellant examined the policy a few weeks after its delivery, and not being satisfied that it covered the property of the tenants, secured the indorsement described in the complaint. On the morning of June 27, 1934, after the outside doors of the safe had been opened in the usual and lawful manner by an authorized employee of appellant, the compartment in the safe used by one of appellant's tenants was broken open by force and violence and burglarized and cash and property to the value of $422.05 stolen therefrom.

A great deal of the opening statement is argument on the meaning of the terms of the policy as written, it being contended that the loss suffered by the burglary was within the provisions of the policy.

When appellant called its first witness, respondent's attorney inquired of appellant's attorney: 'Are you asking reformation of this contract? If not, I would like to make an opening statement.' Appellant's attorney responded: 'I am asking reformation if necessary. I am asking for any relief due under the complaint.' Thereupon respondent's attorney said: 'I challenge the sufficiency of the opening statement, and demur, and move for judgment with prejudice, on the ground that the opening statement does not state facts sufficient to constitute a cause of action.'

While in the opening statement no particular mention wad made of reformation of the contract of insurance and although, following the opening statement, the discussions by the trial court and by counsel for both parties particularly related to the meaning of the written terms in the policy, yet near the close of the arguments the following was said by the court and appellant's attorney:

'The Court: The only question is whether this policy contemplates whether the safe should be locked when burglarized.

'Appellant's Attorney: It was agreed between the parties to cover the safe in the method by which it was used, it was understood by Mr. Gemberling that the door would be open during the day and closed at night. That is the reason we amended the complaint. I want to make this proof.

'The Court: You want to say it was understood when the insurance policy was issued that it did not require that the safe itself should be burglarized?

'Appellant's Attorney: Yes, I want to show they covered the safe where the door was open during the daytime and the policy was written with that in view.

'The Court: Well, it does not. It is agreed that the policy would cover property held by others.

'Appellant's Attorney: Mr. Gemberling knew how the safe was used and he told them it would be covered and made them this policy.

'The Court: Subject to limitations and conditions of the policy, he specially put that in.

'Appellant's Attorney: Let me read this case. (Reads). Now here is a case where Mr. Heitman thought the burglary was covered and protected his safe in the manner it was used. The policy was provided intending to make that coverage and it seems to me if there is necessity for something further to meet the minds of the parties, it should be performed.'

It patently appears from the foregoing that appellant's attorney did not waive or negative the cause of action for reformation, but rather asserted it. Yet the trial court dismissed the cause because the policy as written did not give the protection for which appellant asked.

'Item 14(a)' in the policy specifies that the insurance is on money and securities outside or inside any compartment of the safe. Paragraph I, under the heading 'Indemnity Agreements,' provides that the insurance company undertakes: 'To Indemnify the Assured for all loss by burglary, of property insured hereunder, from within that part of any safe or vault to which the insurance under this Policy applies, occasioned by any person or persons making felonious entry into such safe or vault by actual force and violence of which force and violence there shall be visible marks...