Ennis v. Retail Merchants' Ass'n Mut. Fire Ins. Co.

• Decision Date: 09 February 1916
• Citation: 33 N.D. 20,156 N.W. 234
• Parties: ENNIS v. RETAIL MERCHANTS' ASS'N MUT. FIRE INS. CO.
• Court: North Dakota Supreme Court

33 N.D. 20

156 N.W. 234

ENNIS

v.RETAIL MERCHANTS' ASS'N MUT. FIRE INS. CO.

Supreme Court of North Dakota.

Jan. 4, 1916.

On Petition for Rehearing, Feb. 9, 1916.

Syllabus by the Court.

The doctrine of waiver will not be extended so as to deprive a party of his defense merely because he negligently or incautiously, when the claim is first presented, while denying his liability, omits to disclose the ground of his defense, or states another ground than that upon which he finally relies. There must, in addition, be evidence from which the jury would be justified in finding that with full knowledge of the facts there was an intention to abandon, or not to insist upon the particular defense afterward relied upon, or that it was purposely concealed under circumstances calculated to, and which actually did, mislead the other party to his injury. The mere fact, therefore, that an insurance company, during the negotiations between the parties after a loss, merely justifies its refusal to pay the claim on the ground that the premium was not paid, does not debar such insurance company from interposing a defense based upon proper pleadings that the conditions of the policy in regard to the making of an inventory and of the keeping of books of account and the keeping of the same in an iron safe have been violated.

The defense that the insured had not made an inventory and kept books of his purchases and sales and kept the same in an iron safe as provided by the terms of his policy is one which must be specially pleaded in an action upon such insurance policy.

It is error for a trial judge, after he has refused to allow the amendment of an answer upon the trial, in order that a certain defense may be interposed, and has thus lulled the plaintiff into a sense of security that no such defense can be relied upon, to afterwards, and after a verdict has been rendered in favor of the plaintiff, and judgment has been entered thereon, allow an amendment to the answer setting up such defense, so that a judgment notwithstanding the verdict may be entered thereon.

Where a policy of insurance is written for a gross premium, but the insurer agrees to pay a certain amount in case of the destruction of a building by fire, and a certain other amount in the case of the destruction of its contents, and the policy contains a provision that books must be kept of purchases and sales, and such books must be kept in an iron safe, the policy is divisible in so far as such clause or condition is concerned, and such clause or condition will not be held to apply to the insurance upon the building itself.

It is not an abuse of discretion on the part of a trial judge to refuse to allow the filing of an amendment to the answer in an action on a fire insurance policy, and which amendment sets up the new defense that the insured, in violation of the terms of the policy, failed to keep books of account of his sales and purchases and to keep said books within an iron safe, when such motion is not made until after the close of plaintiff's testimony, and neither throughout the prior negotiations for a settlement nor in the original answer had the defendant in any manner suggested the defense, and the trial was held at a place more than one hundred miles from the home of the plaintiff and of his attorneys, and there was no showing that prior to the making of such motion the defendant was not aware of the new facts sought to be pleaded.

On Petition for Rehearing.

Where an insurance company refuses to consider a claim for the loss of goods destroyed by fire on the ground that the premium has not been paid, and on that ground alone, and at no time asks for formal proofs of loss or furnishes blanks therefor, it will not be permitted to interpose upon the trial, when sued for the loss, the defense that such formal proofs were not furnished as required by the policy.

The defendant is not entitled, as a matter of right, to amend his answer upon the trial so as to set up a new and added defense, and the trial court, under section 7482 of the Compiled Laws of 1913, is only authorized to grant permission to do so when such permission would be in furtherance of justice.

Although on the reversal by the Supreme Court of a judgment notwithstanding the verdict the cause will be remanded to the district court with leave to the respondent to perfect a motion for a new trial in cases where he asked for a new trial in the alternative and in connection with the motion for a judgment notwithstanding the verdict, and it is apparent that error was committed on the trial which would justify the granting of such new trial, no such leave will be granted, when it is apparent that no error was committed.

Where upon the trial the court refuses to permit an amendment to the answer which sets up a defense, which, under the peculiar facts of the case, is purely technical, and at the close of the trial the judge sets aside a verdict for the plaintiff, and allows such amendment, and orders a judgment entered for the defendant notwithstanding such verdict and notwithstanding the fact that the evidence in support of the amendment was objected to, the Supreme Court, if it reverses such judgment notwithstanding the verdict on an appeal taken, will take into consideration the technical nature of the defense in determining whether the cause should be remanded to the district court with leave to perfect the motion for a new trial and in order that such defense may be pleaded and interposed, and whether the remanding of the cause for such purpose would be in furtherance of justice.

Appeal from District Court, Cass County; Pollock, Judge.

Action by Frank Ennis against the Retail Merchants' Association Mutual Fire Insurance Company, a corporation. A verdict and judgment for plaintiff were set aside, and judgment notwithstanding the verdict entered for defendant, and plaintiff appeals. Reversed, and former judgment and verdict reinstated, and rehearing denied.

This is an action to recover on a fire insurance policy, and the appeal is from the action of the district court in setting aside a verdict for the plaintiff and entering judgment for the defendant notwithstanding the same.

The complaint alleged that the defendant was engaged in the general fire insurance business; that on October 12, 1912, the plaintiff was the owner and in possession of a certain lot at Pettibone, N. D., and in the possession of certain agricultural implements, repairs, furnishings, etc.; that on January 19, 1913, the building was of the value of $650, and the agricultural implements, etc., of the value of $4,182; that on October 12, 1912, the defendant entered into a contract of insurance with the plaintiff under and by virtue of which the defendant, for a valuable consideration duly paid, made, executed, and delivered to the plaintiff an insurance policy insuring said property against loss by fire for a period of one year from October 12, 1912, limiting its liability for a loss in any sum not greater than $500 on said building and for a loss in any sum not greater than $2,000 on said machinery, which said policy and contract of insurance was then and there delivered to the plaintiff; that said insurance policy is No. 1028, and is now, and at all times since October 12, 1912, has been, in full force and effect, and plaintiff is now, and at all times since October 12, 1912, has been, the owner of said insurance policy and contract; that on January 9, 1913, without fault or negligence on the part of the plaintiff, the said building and machinery were destroyed by fire, and the plaintiff suffered loss thereby in the sum of $4,832; that immediately thereafter the plaintiff notified the defendant of such loss by telephone message and by letter in writing, and demanded from said defendant that it send plaintiff proof of loss blanks, and that thereafter, on or about March 4, 1913, the defendant having at all times failed, refused, and neglected to send any such proof of loss blanks, made and sent to the defendant full and complete proofs of loss under said policy and contract of insurance, all of which defendant received and has wholly failed and neglected to object to; that the plaintiff has offered in writing to arbitrate any and all differences of the sums or amounts of loss sustained in said matter, but that the said defendant has wholly refused, failed, and neglected to arbitrate said matters or any part thereof; that plaintiff has in all things conformed to the terms of his said insurance policy and contract on his part to be performed, and has at all times offered to, and been ready, willing, and able to, further perform any other terms of said contract on his part to be performed or conditions which defendant might, in reason, desire this plaintiff to perform; that there is due and owing to the plaintiff from defendant by reason of the premises aforesaid the sum of $2,500, with interest at the rate of 7 per cent. per annum from January 19, 1913.

For answer to this complaint the defendant admitted the formal allegations, and admitted the issuance of the policy, but denied “that the plaintiff at any time paid the defendant the premium or consideration for said insurance policy, and denies that said insurance policy is in force or effect.” It also denied having any knowledge or information sufficient to form a belief thereon of the allegations of the complaint as to the ownership of the lot and of the machinery and repairs, and, in addition to these denials, generally denied all of the allegations of the complaint. It further alleged:

“That the premium named in said policy of insurance, referred to in said complaint, and for which the plaintiff became indebted to this defendant, was not paid in cash or unconditional notes within 60 days from the issue of said insurance policy, or at all, and that by the provisions of section 4440, Revised Code of North Dakota for 1905, as amended by chapter 143, Laws of 1907...