Northwestern Mut. Hail Ins. Co. of Elkton v. Fleming
| Citation | 80 N.W. 147,12 S.D. 36 |
| Parties | NORTHWESTERN MUT. HAIL INS. CO. OF ELKTON v. FLEMING. |
| Decision Date | 02 September 1899 |
| Court | Supreme Court of South Dakota |
Appeal from circuit court, Brown county; A. W. Campbell, Judge.
Action by the Northwestern Mutual Hail Insurance Company of Elkton S. D., against John Fleming. Judgment for defendant, and plaintiff appeals. Reversed.
Ira O Curtiss, John H. Perry, and Cheever & Hall, for appellant. F E. Campbell and H. H. Potter, for respondent.
This was an action on the part of the plaintiff to recover of the defendant the amount of a premium note executed by said defendant for the sum of $53. The complaint was in the usual form, alleging that the plaintiff was duly organized created, and existed under and by virtue of the laws of this state; that said defendant made, executed, and delivered to the plaintiff his certain promissory note, by which he promised to pay to the plaintiff the sum of $53, or such portion thereof as might be assessed by the officers of said company for the payment of losses by hail, according to the rules and regulations of said corporation; that at an annual meeting of directors of said plaintiff, held at its office, at Elkton, on the 26th day of August, 1895, an assessment was duly made on the notes taken by the plaintiff during the year 1895, to the full amount of said notes. And plaintiff demanded judgment therefor. To this complaint defendant answered, denying certain allegations of the complaint, and alleged, as a fifth defense, "that said note was made, executed, and delivered because he relied upon certain false and fraudulent representations made by said plaintiff and by its general officers at the time of the execution and delivery of said note; that it was represented to the defendant at the time of the execution and delivery of the said note that the plaintiff herein had at that time about 70,000 acres insured in said company, and 1,000 members, whereas, in truth and in fact, they had less than 200 members, and less than 20,000 acres insured, and that the defendant relied upon that statement, and made, executed, and delivered said note because he relied upon the same; that had there been the number of members claimed by said company, and the number of acres represented by them insured, his assessment would have been much less than the full assessment; that the general officers of said company knew that these statements were being made for the purpose of inducing this defendant to insure in said company." At the close of all the evidence both plaintiff and defendant moved the court for the direction of a verdict. The motion of the plaintiff was denied, and the motion of the defendant granted, and from the judgment entered in favor of the defendant the plaintiff appeals to this court.
The motion to direct the verdict on the part of the plaintiff was made on the ground that the defendant had failed to establish any defense to the action. The motion to direct the verdict on the part of the defendant was made on the following grounds: (1) Because the alleged assessment is so obscure and indefinite as to be void; (2) because the alleged assessment included and composed, not only the losses and expenses incurred, but also conjectural expenses to be incurred, and also losses for uncollected notes; (3) because the alleged assessment was not made at the time authorized by the by-laws, nor at any regular or special meeting of the board of directors properly called; (4) "because it appears from the uncontradicted evidence that the defendant was induced to enter into the contract by the false representations made by the plaintiff, material to the contract, upon which the defendant relied."
It is contended on the part of the appellant that the fifth paragraph of the answer fails to state any defense, in that it does not allege a rescission or attempted rescission of the contract, and does not deny the receipt by the defendant of the consideration, to wit, his protection against loss by hail, nor does it offer to restore or pay for the same, and in that it does not plead or attempt to plead a counterclaim for any damages sustained. Section 3589, Comp. Laws, provides as follows: "A party to a contract may rescind the same in the following cases only: (1) If the consent of the party rescinding or of any party jointly contracting with him, was given by mistake, or obtained through duress, menace, fraud or undue influence, exercised by or with the connivance of the party as to whom he rescinds, or of any other party to the contract jointly interested with such party. ***" And section 3591 provides as follows: "Rescission, when not affected by consent, can only be accomplished by the use, on the part of the party rescinding, of reasonable diligence to comply with the following rules: (1) He must rescind promptly, upon discovering the facts which entitle him to rescind,...
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