London & Scottish Assur. Corporation of London, England, v. Smith

• Decision Date: 17 January 1935
• Docket Number: 6 Div. 541.
• Citation: 158 So. 892,229 Ala. 556
• Court: Alabama Supreme Court
• Parties: LONDON & SCOTTISH ASSUR. CORPORATION OF LONDON, ENGLAND, v. SMITH.

158 So. 892

229 Ala. 556

LONDON & SCOTTISH ASSUR. CORPORATION OF LONDON, ENGLAND, v. SMITH.

6 Div. 541.

Supreme Court of Alabama

January 17, 1935

Appeal from Circuit Court, Jefferson County; Roger Snyder, Judge.

Action on a policy of fire insurance by W. W. Smith, as assignee of Alabama National Life Insurance Company, against the London &amp Scottish Assurance Corporation of London, England. From a judgment for plaintiff, defendant appeals.

Reversed and remanded.

H. H Grooms and Coleman, Spain, Stewart & Davies, all of Birmingham, for appellant.

H. M Abercrombie and Mullins & Deramus, all of Birmingham, for appellee.

KNIGHT Justice.

Suit upon a fire insurance policy. The plaintiff has stated his cause of action in one count, in which he sues as assignee of the Alabama National Life Insurance Company.

It is averred in the complaint, count A, that the defendant insured a certain apartment house against loss or injury by fire and other perils; that this building was, while the insurance was in force, damaged by fire. This policy was issued to the plaintiff as owner of the building.

It is averred that the policy of insurance contained a stipulation, provision, or agreement whereby loss or damage, if any, under the policy should be payable to Alabama National Life Insurance Company, as first mortgagee, as its interest might appear. It is then averred that on, to wit, the 2d day of March, 1928 (after the loss had been suffered), the Alabama National Life Insurance Company, for a valuable consideration, assigned and transferred to the plaintiff any interest it may have had in and to "any amount due under the terms of the policy." The transfer is set out in hæc verba.

The appellant's third assignment of error presents for review the propriety of the court's action in overruling the defendant's demurrer to the complaint.

It is first urged against the complaint that it is vague and indefinite as to whether the plaintiff is proceeding in his original and individual capacity, as the insured under the policy contract, or only as the assignee of the policy as to any loss that may have occurred thereunder, or whether he is suing in both capacities.

A plaintiff will not be permitted against an apt ground of demurrer, in a single count, to allege in "a doubtful and uncertain manner two or more distinct and incongruous causes of action, in order to hit some possible cause of action that he may be able to prove on the trial." Birmingham Ry. Lt. & P. Co. v. Nicholas, 181 Ala. 491, 61 So. 361, 364.

In the case of McGhee et al. v. Reynolds, 129 Ala. 540, 29 So. 961, 965, it was observed: "A complaint should be framed upon a definite theory, so as to inform the defendant of the issue he is called upon to meet, and to furnish the court with the means of determining the relevancy of evidence."

However, we are not impressed that there is merit in appellant's contention that the averments of the complaint are inconsistent, or that under the complaint, as framed, the plaintiff can claim both in his individual capacity, as the originally insured party, and also as assignee of the Alabama National Life Insurance Company, as payee under the "loss payable clause."

As we construe the complaint, the plaintiff has proceeded in virtue of his right as assignee of the Alabama National Insurance Company, mortgagee, to recover such, and only such, loss as the said mortgagee could have recovered. The summons commands the defendant to appear and answer "the complaint of W. W. Smith, as assignee of the Alabama National Life Insurance Company." While the summons was issued by the clerk of the court, we may well assume that it followed the caption of the complaint. On appeal, under our rule 26, the clerk is required, in preparing the transcript, to set out the style of the cause; and the style of the cause, as stated in the transcript before us, is: "W. W. Smith, as assignee of the Alabama National Life Insurance Company, a corporation, Plaintiff, v. London and Scottish Assurance Corporation, a corporation, Defendant." We hold that this suit is by the plaintiff, suing in virtue of his right as assignee of the Alabama National Life Insurance Company.

However, the complaint, in our opinion, was defective in one particular. It wholly failed to set forth either in terms or legal effect the "loss payable clause" by which the Alabama Life Insurance Company became a party to the contract of insurance. The complaint was defective in not averring that there was a balance still due and owing on the mortgage, and the amount of such balance. For aught averred to the contrary, the entire debt secured by the mortgage had been paid before the fire occurred. Apt grounds of demurrer were assigned to this defect in the complaint, and the court erred in not sustaining the same.

With its demurrer overruled, the defendant filed a number of pleas-the general issue and special pleas. The case went to the jury on pleas 1 (general issue) and pleas 6, 7, 8, 11, 12, and 13.

It is insisted that the court committed error in sustaining plaintiff's demurrer to plea 5. There is merit in the insistence.

Plea 5 brought forward a provision of the policy contract to the effect that the entire policy "shall be void * * * if the subject of the insurance be a building on ground not owned by the insured in fee simple." The defendant set up in this plea that the "subject of the insurance was a building not on ground owned by the insured in fee simple."

It will be noted that the complaint averred that the policy "contained a stipulation, provision, or agreement, whereby loss or damage, if any, under the policy should be payable to Alabama National Life Insurance Company, as first mortgagee, as its interest might appear."

There is nothing in the complaint to show that the policy would not be avoided, as to the designated payee, by acts of the insured done or suffered contrary to the provisions of the policy contract, or that the terms or conditions of the policy providing for a forfeiture, which applied as to the insured, would not apply to the mortgagee. In the absence of such averments, we must hold, in consonance with our previous decisions, that any of the terms or conditions of the policy, which would defeat recovery by the insured, would also defeat recovery by the mortgagee. This was our holding in the case of Home Loan & Finance Co. v. Fireman's Fund Ins. Co. of San Francisco, Cal., 221 Ala. 529, 129 So. 470, 471, wherein it was observed: "A forfeiture by reason of complete change of ownership without the consent of the insurer, so that the policy is no longer in force in favor of the insured, defeats also the claim of his appointee. 26 C.J. p. 44; 2 Cooley's Briefs on Ins. (2d Ed.) 1267 and 1287; Hartford Fire Ins. Co. v. Liddell, 130 Ga. 8, 60 S.E. 104, 14 L. R. A. (N. S.) 168, 124 Am. St. Rep. 157; Southern States F. & C. Ins. Co. v. Napier, 22 Ga.App. 361, 96 S.E. 15; Brecht v. Law, Union & Crown Ins. Co. (C. C. A.) 160 F. 399, 18 L. R. A. (N. S.) 197, and note; Boston Co-Operative Bank v. American C. Ins. Co., 201 Mass. 350, 87 N.E. 594, 23 L. R. A. (N. S.) 1147, and note; Roper v. National Fire Ins. Co., 161 N.C. 151, 76 S.E. 869."

Plea 5, therefore, presented a defense to the action, as stated in the complaint, and the court committed error in sustaining plaintiff's demurrer thereto. The plaintiff could have anticipated this defense by bringing forward the terms of the "loss payable clause," naming the mortgagee as payee, which plaintiff subsequently introduced in evidence; or, failing in that, he could have replied to the plea by setting up the terms of the agreement designating the mortgagee as payee under the loss payable clause as executed.

In view of the fact that there may be another trial of this cause, it may be proper here to state that further consideration should be given to the sufficiency of pleas 6 and 7. The sufficiency of these pleas is not presented here for consideration, and hence we are not called upon to pass upon the same.

We will dismiss consideration of the sufficiency of plea 9, with the observation that this assignment of error is not insisted upon. The plea presented no answer to the complaint.

Plaintiff while testifying to certain injuries caused by the fire to the equipment in the compartment where the boiler was located, was asked the following question by his attorney: "What did that damage amount to?" The defendant interposed proper and timely objection to the question. ...