North River Ins. Co. v. Aetna Finance Co.

• Decision Date: 11 June 1960
• Docket Number: No. 41822,41822
• Parties: NORTH RIVER INSURANCE COMPANY, Appellant, v. AETNA FINANCE CO., Appellee.
• Court: Kansas Supreme Court

Page 1060

352 P.2d 1060

186 Kan. 758

NORTH RIVER INSURANCE COMPANY, Appellant, v. AETNA FINANCE CO., Appellee.

No. 41822.

Supreme Court of Kansas.

June 11, 1960.

Rehearing Denied Aug. 5, 1960.

Syllabus by the Court

1. When an action in the district court is tried to the court upon a written stipulation of facts, on appeal, the surpreme court has the same opportunity to consider the evidence as the district court, and the appeal is in effect a trial de novo.

2. An action to recover money paid to the defendant under a mistake of fact sounds in quasi contract, and the court will imply a promise to repay on the part of the defendant.

3. The defense of change of position asserted by a defendant amounts to a plea of estoppel in pais, and is an affirmative defense which must be pleaded and proved by the defendant.

4. In an action where it is shown that an insurance company paid the insured value of an automobile on the mistaken belief that the automobile had been stolen, and sues to recover the payment made to the defendant, the record is reviewed and it is held: The defendant failed to prove change of position as a defense.

Arthur L. Claussen, Topeka, argued the cause, and A. Harry Crane, Ward D. Martin, and Harvey D. Ashworth, Topeka, were with him on the briefs, and appellant.

James L. Grimes, Jr., Topeka, argued the cause, and M. F. Cosgrove, Robert E. Russell, Willard N. Van Slyck, Jr., William B. McElhenny, and O. R. Stites, Jr., Topeka, were will him on the briefs, for appellee.

JACKSON, Justice.

The insurance company sued the finance company alleging that it had paid to the defendant the sum of $1,390 to satisfy an insurance claim under the mistaken belief that the automobile covered by an insurance policy had been stolen; that in truth and in fact, the automobile was never stolen. The defendant company relied entirely upon the defense of a change of position made by the defendant after receiving the insurance money. The plaintiff appeals from an adverse judgment of the trial court.

In the briefs and oral arguments there has been some discussion of the nature of the present action. As early as the times of Oliver Cromwell, courts of law in England held that the action of general or indebitatus assumpsit would well lie on the common court of money had and received, where the plaintiff showed that he had under mistake of fact paid money to defendant under a supposed duty. Attention is directed to the decision in the year 1657, in the case of Bonnel v. Fouke, 2 Siderfin 4; translated from the Norman French and reprinted in Scott & Simpson, Civil Procedure 104, also Noble v. Doughten, Syl. p8, 72 Kan. 336, 83 P. 1048, 3 L.R.A.,N.S., 1167; Board of Highway Com'rs v. City of Bloomington, 253 Ill. 164, 97 N.E. 280.

In considering the nature of the action, it should be remembered that general assumpsit was the action in which the courts of law borrowed principles of equity from the courts of equity and implied or imposed a promise or duty to repay money upon a defendant, if he had received the money wrongfully, although there was in fact no such promise. Most of the law relating to the subject of quasi-contracts stems from the old action of general assumpsit.

The present case was tried to the court below upon a stipulation of almost all of the facts. In this situation, this court having the same opportunity as the trial court to consider the facts, must in effect treat the appeal as a trial de novo. In Keimig v. Drainage District, 183 Kan. 12, at pages 15-16, 325 P.2d 316, and In re Estate of Kemper, 157 Kan. 727, at page 734, 145 P.2d 103, will be found large collections of the decisions of this court upon this point. In the Kemper case, it was said:

'Under such circumstances when the evidence is written, documentary in character or in the form of depositions or transcripts, it is the duty of this court to decide for itself what the facts establish, substantially as it would in an original case (citing authorities).' (157 Kan. at page 734, 145 P.2d at page 107)

Still another principle of civil procedure may be noted in view especially of the duty of this court as to the facts. It would seem that the defense of the defendant finance company in this case is really one of estoppel in pais or equitable estoppel. As to that issue, there can be no doubt that it is an affirmative defense to be pleaded and proved by the defendant who asserted it (Palmer Oil & Gas Co. v. Blodgett, Syl. p2, 60 Kan. 712, 57 P. 947; Painter v. Fletcher, 81 Kan. 195, 105 P. 500; Langston v. Hoyt, 108 Kan. 245, 250, 194 P. 654; Muenzenmayer v. Luke, 161 Kan. 597, 602, 170 P.2d 637; 31 C.J.S. Estoppel § 153 and § 160; 19 Am.Jur. Estoppel, § 179 and § 198).

The defense of change of position was pleaded in defendant's answer and the sufficiency thereof is not challenged. Therefore, the facts agreed upon at the trial must be examined to ascertain whether there has been a showing of a change of position sufficient to constitute a defense to the action of the plaintiff upon the implied promise to repay the money mistakenly received.

The stipulation of facts submitted to the trial court is in numbered paragraphs. We shall endeavor to summarive part of the stipulation and thereby shorten this opinion, but shall refer to the numbered paragraphs to aid reference thereto.

Paragraphs 1 and 2 recite the incorporation of the parties and their ability to do business in Kansas.

In paragraphs 3 and 4, it appears that on August 17, 1955, defendant made a loan in the gross amount of $1,836 to one J. Earl Wilson, and as collateral security therefor 'obtained a chattel mortgage describing, among other items,' a certain 1953 Buick Riviera Sedan, which on the same day was insured against theft and other hazards by plaintiff in an insurance policy. A copy of the insurance policy was attached to the stipulation, and the pertinent portion thereof reads as follows:

'Loss Payee: Any loss hereunder is payable as interest may appear to the insured and Aetna Finance Company 728 1/2 Kansas Avenue, Topeka, Kansas.'

The stipulation of facts continues as follows:

'5. Sometime in February, 1956, the account of J. Earl Wilson with defendant became delinquent and defendant commenced normal collection efforts. After several phone conversations with Mrs. Wilson concerning the delinquency, the Wilsons moved without notifying defendant. On or about April 3, 1956, a representative of defendant located the Wilsons new residence and called upon them. Defendant was advised by Mrs. Wilson, the wife of J. Earl Wilson, that Mr. Wilson was a patient at Topeka State Hospital. Mrs. Wilson further advised defendant that the above described automobile had been removed on or about March 31, 1956, and that she had thought defendant had repossessed it. Defendant's representative advised Mrs. Wilson that it had not repossessed it and Mrs. Wilson then suggested that the vehicle must have been stolen. Defendant thereafter on or about April 5, 1956 reported the suspected theft of said automobile to the Topeka Police Department and that Department in turn contracted Mrs. J. Earl Wilson and obtained a formal suspected theft complaint from her. Thereafter said suspected theft was reported to the National Automobile Theft Bureau and the Kansas Highway Patrol.

'6. On or about April 5, 1956, the defendant notified plaintiff of the suspected theft of said automobile. The plaintiff referred the report to the firm of Underwriter's Adjusting Company, Topeka, Kansas, which firm engages in insurance claim investigation and adjusting, and Mr. Irven F. Jacobs of that firm checked with the Topeka Police Department and found that said automobile was reported stolen on April 5, 1956, as occurring on March 30 or 31st. A copy of the police report is attached hereto and marked Exhibit B.

'7. On or about June 18, 1956, defendant was advised by Mr. Jacobs of the Underwriter's Adjusting Company that plaintiff would pay defendant for the loss of its security in accordance with the terms of plaintiff's insurance policy. At said time, Mr. Jacobs presented the proof of loss form to defendant for execution and Mr. Jacobs permitted the execution of said proof of loss by defendant in lieu of execution by the named insured, J. Earl Wilson, because of Mr. Wilson's hospitalization. A copy of said proof of loss is attached hereto and marked Exhibit C.

'8. Following the execution by defendant of said proof of loss, plaintiff paid to defendant as loss payable payee, the sum of $1,390.00 being the full value of said automobile as of March 30, 1956. Upon receipt of plaintiff's check defendant executed and delivered to plaintiff a Hold Harmless Agreement which is attached hereto and marked Exhibit D.

'9. Thereafter, both plaintiff and defendant discovered that the said automobile had never been stolen. That on April 6, 1956, a Kansas duplicate title No. 2280408A covering the above described 1953 Buick automobile was obtained from the Kansas Motor Vehicle Department by one Charles Falkenburg, Vice-President of the J. Earl Wilson Construction Company, upon his representation to the Kansas Motor Vehicle Department that the original certificates of title had been lost.

'10. That the first information that plaintiff and defendant had of the issuance of the Kansas duplicate title to said automobile was shortly after April 11, 1957. On that date, the Missouri State Highway Patrol notified Charles S. Crank, Chief of Detectives of the Topeka Police Department that the records of the Missouri Motor Registration Division, Jefferson City, Missouri, reflected that Missouri certificate of title No. 7632598 was issued April 4, 1957, with Missouri license C53-360 to F. M. Grace, 429 West 57th Terrace, Kansas City, Missouri, for a 1953 Buick Riviera, Motor No. V411727, purchased March 14, 1957 from J. Earl Wilson Construction Company, Inc., 123 East 21st Street, Topeka, Kansas, and who surrendered duplicate Kansas title...