Continental Ins. Co. of New York v. Pierce

• Decision Date: 04 May 1888
• Citation: 18 P. 291,39 Kan. 396
• Parties: THE CONTINENTAL INSURANCE COMPANY OF NEW YORK v. AMOS E. PEARCE
• Court: Kansas Supreme Court

18 P. 291

39 Kan. 396

THE CONTINENTAL INSURANCE COMPANY OF NEW YORK v. AMOS E. PEARCE

Supreme Court of Kansas

May 4, 1888

Error from Lyon District Court.

ACTION by Pearce against the Insurance Company, to recover upon a policy issued by defendant to plaintiff. The petition stated three causes of action, as follows: First, for $ 1,000 insurance on plaintiff's house; second, for $ 228.25 on personal property belonging to plaintiff; and third, for $ 256.50 on personal property owned by Geo. H. Edwards. Trial at the January term, 1886. The plaintiff dismissed the second and third causes of action. On the first cause of action the jury found for the plaintiff, and assessed his damages at $ 1,000; new trial denied defendant; judgment on the verdict for the plaintiff. The Company brings the case here. The material facts appear in the opinion.

Judgment affirmed.

Kellogg & Sedgwick, for plaintiff in error.

Buck & Feighan, for defendant in error.

HOLT C. All the Justices concurring.

OPINION

HOLT, C.

Defendant in error, as plaintiff, commenced his action in the Lyon district court, to recover the sum of $ 1,484.75. His petition contained three counts, but we have only the first one under consideration. In it he averred that defendant had issued to him a policy insuring him against loss by fire on a dwelling house, its contents, and a barn, and that they were accidentally destroyed by fire. The defendant in its answer alleged that the policy of insurance was issued upon plaintiff's application, which was false in its statements and representations, and which he made for the purpose of deceiving and defrauding defendant. The plaintiff in his reply says that the application was written out by the agent of defendant, who had previously made an accurate and careful examination of the premises, knew how the house was built, and had expressed himself satisfied with its condition and surroundings; and he also further set forth that the agent had full authority to waive any conditions in the application. There was a trial by a jury verdict for plaintiff, and judgment thereon. The defendant is plaintiff in error.

The first question that confronts us is whether the allegation, in plaintiff's reply, of agency and authority of the party taking the application, should be taken as true. Section 108 of the civil code reads as follows:

"In all actions, allegations of the execution of written instruments and indorsements thereon, of the existence of a corporation or partnership, of any appointment or authority, shall be taken as true, unless the denial of the same be verified by the affidavit of the party, his agent or attorney."

The plaintiff contends that under this section the allegations of the reply should be treated as fully proven. If we should accede to this proposition, it alone would determine this case, for the averments of the reply are a complete defense to the answer of defendant. If § 108 was the only one to consider in this matter, we would be compelled to hold that the averments of authority and agency are true, and that the party taking the application had full power to make and modify it, as completely as though the defendant itself, by its principal officers, was present. We are at a loss, however, to know how, under our code, the reply could be formally denied, for § 86 provides:

"The only pleadings allowed are: First, the petition by the plaintiff. Second, the answer or demurrer by the defendant. Third, the demurrer or reply by the plaintiff. Fourth, the demurrer by the defendant, to the reply of the plaintiff."

This section makes it plain that no pleading is allowed to a reply, save only the demurrer of defendant thereto. It was suggested to us that an affidavit, denying the truth of the allegations, might be filed. But that would not be permissible, for an affidavit is not a pleading, nor could the explicit provisions of the statute be thus evaded by filing one, and asking that it should have the force of a pleading. But § 128 of the code provides:

" . . . The allegation of new matter in the reply shall be deemed to be controverted by the adverse party, as upon direct denial or avoidance, as the case may require."

Probably the primary application of the clause, "as the case may require," may have reference to the distinction between a general denial and a plea of confession and avoidance; but we think it will not violate the spirit of the section to apply it, without reservation, to averments of authority and agency in a reply. No pleading would put in issue like allegations, unless verified by the oath of the party, his agent or attorney, and the statute provides that all allegations of the reply shall be deemed controverted by the adverse party, without the filing of any pleading.

The plaintiff makes this contention: that all allegations in a reply, except those concerning matters referred to in § 108, should be considered as denied without any pleading, but those matters named in said section must be denied by a verified one. We cannot so construe the language of that portion of § 128 we have quoted, especially when there is no provision of the code authorizing such a pleading. We can readily see that this construction might not always be satisfactory, and in some instances would necessitate the production of witnesses and testimony, that § 108 was intended to obviate. The express provisions of the statute limiting the number of pleadings must govern, although good reasons may exist for a different rule. We think, therefore, it devolved upon the plaintiff to prove by evidence that the party taking the application had authority from the company. The testimony supporting such allegation will be considered hereafter.

The facts concerning the application are these: Plaintiff was building a house a short distance from the city of Emporia, and the agent of defendant, wishing to insure him, visited the place two or three times in his absence, and finally met him at a bank in Emporia, where the application was made. Some of the statements in the application were false. The special questions and answers that are important, and which we shall especially consider are: "Chimneys--material of same? Brick. Condition? Good. On what do they rest? Brackets. Stove-pipes--do they pass through roof or floor? No. How near wood? 12 inches. How secured? By safe of zinc in flue, held by wire." The facts were that there was but one chimney. The kitchen stove was not supplied with a flue, but from it was a stove-pipe running up through the roof, and which was not more than three or four inches from the wood, and was secured by a safe of zinc, held by wires. When the application was taken the agent wrote down all of the answers, and read over a part of them to plaintiff, and he signed them, without knowing these answers were in the application. His testimony concerning the matter was to the effect that he told the agent taking the application about the stove-pipe; that he had rather not insure then, but wait until his house was finished; and that his preference was the "Freeport, Illinois, Company." The agent made some objection to the condition of the stove-pipe in the kitchen, and asked plaintiff to build a flue there; but he told him it was out of the question, that he never would build it, that he had always been bothered with flues to his kitchen stove. The agent then said he would a little rather have it built; but plaintiff told him if he could not insure him without the flue, he could not insure him at all. Upon the face of the application, just above the signature of the plaintiff, was the following printed stipulation:

"The foregoing is my own statement, and the questions are answered by me or by my authority, and will be assumed as my act, and the statements are warranted to be a correct description of the risk, and also a correct valuation and description of the property named, and of all incumbrances."

Upon the back of the application is a diagram, and under the head of "Questions to Solicitors" are the following: "Did you survey the risk personally? Yes. Do you fully recommend the risk? Yes.--J. A. BEALS." In the body of the policy is the following stipulation:

"This indemnity contract is based upon the representations contained in the application, of even number herewith, and which the assured has signed, and permitted to be submitted to this company, and which is made a warranty and a part hereof; and it is stipulated and agreed that if any false statements are made in said application, . . . this policy shall be null and void."

In taking this application for insurance, was J. A. Beals the agent of plaintiff, or of defendant? It is claimed that by reason of the stipulation on its face, which provided that all statements, answers and descriptions were the acts of the plaintiff, that whatever part Beals may have taken in making and filling it out, was as his agent. It must be conceded that plaintiff did not seek Beals for this work; did not even ask him to do it, and paid him nothing therefor; did not even suspect that at that time he was his agent, but did believe that he was an insurance agent, looking after the interests of the company whose advantages he was advocating to plaintiff. He was canvassing for business for the defendant had made several trips to plaintiff's house, before he saw him, to insure it, and, against plaintiff's preference, finally induced him to insure in this company. He was supplied with its blanks, and was employed and paid by it. This application was practically the work of Beals, though the stipulation on the face thereof provides that the answers and statements were made by plaintiff, or his authority; thus attempting to make the agent of the company the agent of...