National Mut. Fire Ins. Co. v. Sprague

• Decision Date: 01 July 1907
• Citation: 40 Colo. 344,92 P. 227
• Parties: NATIONAL MUT. FIRE INS. CO. v. SPRAGUE et al.
• Court: Colorado Supreme Court

92 P. 227

40 Colo. 344

NATIONAL MUT. FIRE INS. CO. v. SPRAGUE et al.

Supreme Court of Colorado

July 1, 1907

Rehearing Denied Nov. 4, 1907.

Appeal from District Court, City and County of Denver; Booth M Malone, Judge.

Action by Freedom Sprague and another against the National Mutual Fire Insurance Company to recover on an insurance policy. Judgment for plaintiffs, and defendant appeals. Affirmed.

John H. Gabriel, Clay B. Whitford, and Henry E May, for appellant.

Morrison & De Soto, for appellees.

CASWELL J.

Action upon insurance policy by appellees, as plaintiffs below against appellant. The complaint alleges, in substance, that defendant in September, 1901, for a valuable consideration, made and executed, and at about the same time, by W. D. Kelsey, its agent in Phillips county, delivered, its policy of insurance, in writing, insuring plaintiffs in the sum of $2,000 on their dwelling house, furniture, etc.; that the policy was destroyed by the fire that destroyed the property; that the plaintiffs and each of them duly performed all the conditions of the policy on their part to be performed; that the property was on April 4, 1902, totally destroyed by fire; that there was furnished defendant proofs of loss; that the loss was $2,000; that they had demanded payment for such loss and defendant refused to pay same or any part thereof. The answer of defendant admits that it is now, and at all times mentioned in the complaint was, a corporation duly organized under the laws of Colorado, and denies each and every other allegation of the complaint. Trial to a jury. There was a verdict and judgment for plaintiffs in the sum of $2,121.76, and defendant comes to this court on appeal.

There are 50 assignments of error. We do not deem it necessary to pass specifically upon each one. The general statement of the law governing in this case will sufficiently dispose of all of them.

The first and one of the principal questions raised is: Was there a delivery of the policy? Whether there has been a delivery at all is a question for the jury under proper instructions. Smith v. Life Assur. Soc. of N.Y., 65 F. 765, 13 C.C.A. 284; Snyder v. Ins. Co., 202 Pa. 161, 51 A. 744. The evidence upon the question of delivery was conflicting. The secretary of the defendant company testified that the policy was made out and registered in his office, but that he instructed the clerk not to deliver it. He further says: 'It might be possible that we would send a policy and say deliver these policies and get the obligation slip, but I hardly think we did.' And, again: 'We would not have sent the Sprague policy to our agent for delivery without having that obligation slip.' Mr. Kelsey, the local agent at Holyoke, in Phillips county, testified in the first instance as to the delivery of the policy: 'I don't remember of receiving a policy of the National Mutual for the Spragues. I could not say now positively, because I want to be right about the matter. I did not say positively whether I ever did or not. I don't remember of it, and I don't think that I did, * * * but still I might have. Now, I don't want to say.' He also testified that he did not deliver it, and there was other testimony to the effect that it would not have been delivered without receiving the obligation slip or assessable note for the premium. The plaintiffs both swore positively that the National Mutual policy was delivered to them by Mr. Kelsey. The elder Sprague was not sure whether he signed the obligation slip or not. It was his recollection he did. It was further testified by them that the policy read in consideration of $36, this being the amount of the assessable note or premium claimed by defendant not to have been paid. It was further shown that there was a loss by fire, and that the amount of loss was unpaid. It was alleged and proven that the policy was destroyed by fire. A blank form of policy was introduced in evidence containing the same conditions as the destroyed policy. Applying the evidence to supply the blank spaces in the policy, a portion of it was made to read as follows: The National Mutual Fire Insurance Company of Denver, Colorado, in consideration of the stipulations herein named and thirty-six dollars ($36.00) premium does insure,' etc. The jury by its verdict found as a fact that the policy was delivered, and necessarily that it was delivered under the condition above described, and there not only was sufficient evidence to support the verdict, but we think the preponderance of evidence clearly supported the claim of delivery. This case was thus brought squarely under the rule laid down in Ins. Co. v. Friedenthal, 1 Colo.App. 5, 9, 27 P. 88, holding that such language imports the payment prior to the delivery as the consideration for the delivery of the contract to the insured. The proof had the effect of leaving the plaintiffs in the same position as though the policy had been in their possession after the fire, and such possession is presumption that the policy was duly delivered by the insurance company. Benefit Life Ass'n v. Sibley, 158 Ill. 411, 42 N.E. 137; Thum v. Wolstenholme, 21 Utah 446, 61 P. 537; Jones v. Ins. Co., 168 Mass. 245, 47 N.E. 92.

Another question upon which appellant strongly relies is that a certain assessable note, so called, was not given by the insurer and that no liability attached to the company because it was provided by the terms of the contract that such liability should not attach until the note was given, and in this connection it alleges its objection to certain evidence introduced on the part of the plaintiffs below and to the instructions of the court concerning what it calls a waiver of such note without any plea of waiver in the complaint, and further alleges that there could be no waiver by an agent or officer of the company, and only by the company itself. Referring to the pleadings, the defendant would not have been permitted, upon proper objections, to introduce any evidence concerning the nonpayment of the premium or the failure to give the assessable note, so called. It was stated in Ins. Co. v. Friedenthal, supra, that 'when the policy was delivered it became operative, and it could only be impeached by showing that it was improperly or fraudulently obtained by the insured in such manner as to negative the fact of the legal and voluntary delivery of the policy by the appellant. When delivered and operative, all that was necessary primarily was to allege the contract of insurance, the happening of the contingency whereby the insurer became liable to pay by reason of the contract, and the amount of indemnity to which the insured was entitled. Anything impeaching the validity of the contract should have been alleged by way of defense.' Phoenix Ins. Co. v. Hague (Tex.Civ.App.) 34 S.W. 654, and cases cited. The defendant was not entitled to prove nonpayment of premium under a general denial. Ins. Co. v. Friedenthal, supra; Ass'n v. Worthing, 59 Neb. 587, 81 N.W. 620.

It is unnecessary to the determination of the questions presented to discuss at length the many decisions which have been rendered upon the force and effect of the recitals in this policy. Following the...