Green v. Phœnix Ins. Co. of Hartford, Conn.

• Decision Date: 06 March 1934
• Docket Number: No. 42320.,42320.
• Citation: 218 Iowa 1131,253 N.W. 36
• Parties: GREEN v. PHŒNIX INS. CO. OF HARTFORD, CONN.
• Court: Iowa Supreme Court

218 Iowa 1131

253 N.W. 36

GREEN

v.PHŒNIX INS. CO. OF HARTFORD, CONN.

No. 42320.

Supreme Court of Iowa.

March 6, 1934.

Appeal from District Court, Adams County; George A. Johnston, Judge.

Action in equity to reform and enforce collection of policy of fire insurance. From a decree and judgment in favor of the plaintiff, the defendant appeals.

Affirmed.

See, also, 215 Iowa, 1220, 247 N. W. 660.

EVANS and ALBERT, JJ., dissenting.

D. Cole McMartin, of Des Moines, for appellant.

O. M. Slaymaker and R. E. Killmar, both of Osceola, and E. L. Carroll, of Creston, for appellee.

DONEGAN, Justice.

In December, 1929, the plaintiff took a mortgage in the sum of $1,500 on a certain lot and dwelling thereon in the town of Prescott, Iowa. In January, 1931, payments being in default, plaintiff brought an action to foreclose said mortgage. Not knowing the residence of the then owner of the property, plaintiff, through his agent and attorney, one Fackler, applied to a soliciting agent of the defendant insurance company for insurance to protect his interest as mortgagee. At that time it was explained to the agent of the defendant company that the plaintiff did not know who the real owner of the property was, that it was trading property, and that plaintiff desired insurance which would protect him regardless of who the owner might be. The agent of the insurance company made out an application and forwarded the same to the office of the defendant company at Des Moines. In due course of time a policy of insurance was issued and was by the local agent of the company delivered to said Fackler, the attorney and agent of plaintiff. The foreclosure action proceeded to decree, the property was sold at sheriff's sale and bid in by plaintiff, and a receiver was appointed to take charge of it during the period of redemption. After the appointment of the receiver, the dwelling on the property was totally destroyed by fire, and said receiver, as plaintiff, brought an action at law to recover $1,800, the full amount of the policy. The case was tried to the court and a judgment rendered in favor of the plaintiff. From such judgment the defendant appealed, and upon such appeal the case was reversed and remanded for new trial. After the remand of the case, Jake Stoner, the present plaintiff, was substituted as plaintiff in the said action and filed a substituted petition in equity, in which he alleged that plaintiff, through his attorney, Fackler, verbally applied to the agent of defendant company for a policy of insurance to protect the interest of plaintiff, as mortgagee, in said property to the amount of $1,800; that he told said agent that the plaintiff wanted such a policy as would protect his rights; that he told defendant's agent that neither plaintiff nor his attorney knew who the owner of the premises was, that the property was trading property and was liable to change hands from time to time and might be incumbered by mortgages, and that they desired a policy which would cover plaintiff's interest and would not be affected by subsequent changes of title and subsequent mortgages placed thereon; that neither the plaintiff nor his attorney had knowledge of the form of policy required to protect plaintiff's rights, and the agent of defendant was so told; that the agent of defendant prepared an application which was not signed by plaintiff or his attorney, Fackler; that the defendant issued a policy to plaintiff and through its agent delivered it to plaintiff's attorney and agent, Fackler; that plaintiff and his attorney and agent, Fackler, believed that this policy protected his interest and relied thereon; that, through fraud, accident, and mistake, the defendant did not issue to him such policy as he requested; that the policy issued did not cover his interest in the event the real estate was conveyed without the knowledge and consent of the defendant; that neither plaintiff nor his attorney knew that the policy as issued was not such a policy as requested; and that the fact that it was not such a policy is due to the accident and mistake of the plaintiff, and the fraud, accident, and mistake of the defendant. Plaintiff asked that the policy issued be reformed so that it would not be affected by subsequent conveyances, changes of title, or mortgages placed thereon, and that it be so written that it cover plaintiff's interest in the mortgaged premises so that his rights be not affected by changes in title or by subsequent mortgages placed against said property, and that he have judgment for $1,800, with interest from September 10, 1931.

Defendant in its answer admitted that an application was made for an insurance policy in the sum of $1,800, and that such policy was issued, but denied generally all the other allegations of plaintiff's petition and pleaded certain affirmative defenses. Plaintiff in a reply denied the affirmative defenses set out in defendant's answer.

The cause was tried to the court as an equitable action, and a decree and judgment rendered in favor of the plaintiff. From such decree and judgment the defendant appeals.

[1] I. It is first contended by the appellant that the appellee, having prosecuted the case as an action at law and obtained a judgment therein, made an election, and that, such judgment having been reversed by this court and no new issues being involved, the plaintiff is estopped from now prosecuting this action in equity for a reformation. We have read the cases cited by appellant in support of this contention, but, in our opinion, these authorities are not controlling under the facts of this case. In Newman v. Covenant Mutual Insurance Association, 76 Iowa, 56, 40 N. W. 87, 88, 1 L. R. A. 659, 14 Am. St. Rep. 196, an action was first commenced at law and prosecuted to judgment and an appeal taken to this court, where it was held that an action at law for the amount named in the policy could not be maintained. After the case was remanded, the plaintiff filed an amended and substituted petition in equity asking that the insurance company be compelled to make and collect an assessment against the members of the association. On appeal, this court held that the amendment was permissible and said: “The statute of this state, authorizing the amendment of pleadings, is very comprehensive. Code, § 2689. Under this and other sections of the Code it has become the rule to allow amendments and to deny the right to the exception. When this cause was remanded to the district court there was the same right of amendment as there would have been if it had not been tried. It was one of those cases where an amendment to the petition was absolutely necessary. In the opinion of this court, the plaintiff should have demanded an assessment upon the membership of the association, instead of asking a judgment at law. It was no more than an amendment of the prayer of the petition. If the claim was an honest one, and the defendant refused to make an assessment to pay it, there was a breach of the contract for which it was liable. The plaintiff sought a recovery upon the policy. He set out in his petition and amendments thereto, before the first trial, every fact necessary to show that he was entitled to relief in some form. He made the mistake of demanding a judgment for the amount, when he should have demanded that an assessment be made. If the objection to his petition had been made before the trial it was his right to have his cause changed into the proper proceeding, and to amend the prayer of his petition accordingly. The error in claiming a judgment did not abate the action.”

[2] This action was originally brought at law, and the appeal to this court was from the judgment in such law action. It is well-established law that, after the remand of a law action by this court, amendments may be permitted by the trial court and evidence taken as to matters which have not been adjudicated. Kuhns v. Wisconsin, I. & N. Ry. Co., 76 Iowa, 67, 40 N. W. 92;Buttman v. Christy, 197 Iowa, 661, 198 N. W. 314.

In Zimmerman v. Robinson & Co., 128 Iowa, 72, 102 N. W. 814, 815, 5 Ann. Cas. 960, this court, in considering the rule in regard to election of remedies, said: “To the proper application of this rule at least three things are essential: (1) There must be in fact two or more concurrent remedies between which the party has the right to elect; (2) the remedies thus open to him must be inconsistent; and (3) he must, by actually bringing his action, or by some other decisive act, with knowledge of the facts, indicate his choice between these inconsistent remedies. It follows necessarily from this rule that, if the party has in fact only one remedy, but in the mistaken belief that he has another attempts to enforce it, the doctrine of election is inapplicable, for no choice was ever open to him. Where either of two remedies are available, there may be a tactical advantage to be gained by pursuing one, rather than the other; but in a legal sense no mistake is committed if either be chosen. Where but one remedy exists the unavailing effort to enforce another does not constitute an election or estoppel which prevents a resort to the proper action. This distinction is upheld by the authorities generally, and has often been reiterated by this court.”

[3] It is apparent from the above citation that, before there can be an election of remedies, there must be two or more remedies between which the party has the right to elect, and that such remedies must be inconsistent. As stated in Redhead Bros. v. Wyoming Cattle Inv. Company, 126 Iowa, 410, 102 N. W. 144, 145: “An election exists only where two or more inconsistent remedies are open to the party and he is at liberty to pursue any one of them. It cannot exist between consistent and concurrent remedies, or between a rightful remedy and one which the party may mistakenly suppose to be applicable.” See, also, Kuhns v. Wisconsin, I. & N. Ry. Co., 76 Iowa, 67, 40 N. W. 92;Lemon v....