Harris-Emery Co. v. Pitcairn

• Decision Date: 05 February 1904
• Citation: 98 N.W. 476,122 Iowa 595
• Parties: THE HARRIS-EMERY COMPANY, Appellant, v. C. W. PITCAIRN, F. M. BEARD, J. S. BLAISE and C. M. CHITTENDEN, Appellees
• Court: Iowa Supreme Court

98 N.W. 476

122 Iowa 595

THE HARRIS-EMERY COMPANY, Appellant, v. C. W. PITCAIRN, F. M. BEARD, J. S. BLAISE and C. M. CHITTENDEN, Appellees

Supreme Court of Iowa, Des Moines

February 5, 1904

Appeal from Polk Dictrict Court.--HON. C. P. HOLMES. Judge.

ACTION for damages on account of alleged fraud and deceit. The court having sustained a demurrer to the petition, the plaintiff elected to stand upon its pleading, and from a judgment dismissing its action it appeals to this court.

Reversed.

McVey McVey & Graham for appellant.

Carr Hewitt, Parker & Wright and Dudley & Coffin for appellees.

OPINION

PER CURIAM.

The petition alleges that plaintiff is a corporation in the business of buying, selling, and owning dry goods and other merchandise, and that defendants are officers and directors of a corporation known as the "Millers' & Manufacturers' Mutual Fire Insurance Association." It is further alleged that on March 1, 1899 the defendants solicited the plaintiff to take out a policy of insurance in said association, and to induce such action on plaintiff's part defendants stated and represented that said association was a legally constituted fire insurance company with power to issue policies of insurance such as were ordinarily issued by what were known as "old-line companies," and with power to issue what is known as the "ordinary stock policy" insurance; that the company was in the habit of issuing such policies, affording thereby good and valid insurance; that, believing and relying upon said representations, plaintiff did take a policy of insurance from said association, paying therefor the sum of $ 15; that during the term of said policy plaintiff suffered a loss by fire of the insured property, and then for the first time discovered that said association represented by defendants was a mutual company, organized with limited powers, and prohibited by statute from issuing a policy of the kind given to the plaintiff; that said policy was null and void and worthless, affording plaintiff no insurance or right of action against the association, all of which was well known to the defendants when they issued said policy to him. It is also averred that said association refused to pay the loss under the policy, and has since become insolvent. On these allegations there is a general prayer for damages. The defendants, having first severally answered, obtained leave to withdraw their answers, and united in a demurrer to the petition on the following grounds: "First. Because the petition shows no personal liability against these defendants. Second. The petition shows that the defendants were directors of the insurance company therein referred to, and they are not liable on a policy of insurance issued without authority of law and beyond the power of the corporation. Third. The plaintiffs are conclusively presumed to know that the policy of insurance referred to in the petition was issued without authority, and therefore cannot hold any officer liable because of the issuance of an illegal policy. Fourth. These defendants never entered into any contract with the plaintiffs, but, on the contrary, the contract was with the Millers' & Manufacturers' Mutual Fire Insurance Company, and therefore these defendants are not liable under the averments of the petition." In sustaining this demurrer and entering judgment thereon for defendants, we think there was error.

I. The first ground stated in the demurrer is general, and presents no specific proposition for the consideration of the court. The second ground does not meet the case made by the...