Peters & Roberts Furniture Co. v. Queen City Fire Ins. Co. of Sioux Falls, S.D.

• Decision Date: 15 October 1912
• Citation: 126 P. 1005,63 Or. 382
• Parties: PETERS & ROBERTS FURNITURE CO. v. QUEEN CITY FIRE INS. CO. OF SIOUX FALLS, S.D.
• Court: Oregon Supreme Court

126 P. 1005

63 Or. 382

PETERS & ROBERTS FURNITURE CO. v. QUEEN CITY FIRE INS. CO. OF SIOUX FALLS, S.D.

Supreme Court of Oregon

October 15, 1912

Appeal from Circuit Court, Multnomah County; W.N. Gatens, Judge.

Action by the Peters & Roberts Furniture Company against the Queen City Fire Insurance Company of Sioux Falls, S.D. Judgment for plaintiff, and defendant appeals. Affirmed.

Burnett J., dissenting.

This is an action to recover on a fire insurance policy. The cause was tried before a jury, resulting in a verdict and judgment in favor of plaintiff for $2,406.61, from which defendant appeals.

The complaint is in the usual form. It alleges that a fire insurance policy was issued by defendant on the 25th day of August, 1908, for a valuable consideration, insuring plaintiff's property in the sum of $2,500, for a period of one year from the above date; that on the 1st day of September, 1908, a fire occurred by which plaintiff's property was damaged in the full sum of $15,209.68. The defendant's answer to the plaintiff's complaint contained a general denial, and the following qualified separate affirmative defenses: (1) That if the plaintiff obtained a policy from the defendant, it was obtained conditionally; that is, it was not to go into effect until the policy issued by the Spring Garden Fire Insurance Company of Philadelphia, Pa., should be canceled and delivered over to such company; and, further, that the policy described in plaintiff's complaint should not take effect until the same had been submitted to and approved by one Thomas, who was acting as agent for the mortgagee, none of which was done. (2) That if the plaintiff ever obtained possession or control of the policy described in the complaint, and if any right of action ever accrued to the plaintiff thereunder, the plaintiff is not now the owner or holder thereof. (3) That if a loss occurred, plaintiff should furnish defendant with a written proof of loss embracing certain data required by the policy, which plaintiff failed to do. The answer contained several other separate defenses setting out and claiming the benefit of various clauses of the policy, and asserting that plaintiff had not complied therewith.

At the trial of the cause, after plaintiff had introduced evidence tending to support the allegations of its complaint defendant sought to prove, as alleged in its further and separate defenses, that the policy in question was issued upon the condition that a certain other policy issued by the Spring Garden Fire Insurance Company on the same property for $2,500 should be canceled, and upon the further condition that the latter policy should first be approved by one W.E Thomas. This was objected to by plaintiff on the ground that the separate defenses were inconsistent with the general denial, and for the reason that the policy spoke for itself and that defendant could not contradict its written terms by parol evidence. The court, in considering the answer, held that the general denial of the issuance and existence of the policy was inconsistent with the separate defenses in which the claim was made that defendant was entitled to certain rights and privileges by virtue of the policy; that the separate defenses amounted to an admission that the policy was issued and existed, and was a binding contract between the parties. The court sustained the objection, but did not exclude evidence tending to show a noncompliance with the conditions of the policy on the part of plaintiff.

S.C. Spencer, of Portland (U.S.G. Cherry, of Sioux Falls, S.D., and Wilbur, Spencer & Dibble, of Portland, and G.B. Dimick, of Oregon City, on the brief), for appellant.

D.J. Malarkey, of Portland (E.B. Seabrook, of Portland, on the brief), for respondent.

BEAN, J. (after stating the facts as above).

The denial of the execution and delivery of an instrument is inconsistent with a separate defense which admits the execution of the instrument, or which is founded upon the instrument being in existence and binding.

The test of an inconsistent defense is whether or not the proof of one necessarily disproves the other. Defenses are inconsistent when one of them admits a fact, and the other denies the same fact. The admission will prevail and the fact be deemed admitted. Veasey v. Humphreys, 27 Or. 515, 41 P. 8; Maxwell v. Bolles, 28 Or. 1, 41 P. 661; Dutro v. Ladd, 50 Or. 120, 122, 91 P. 459; Johnson v. Sheridan Lbr. Co., 51 Or. 35, 43, 93 P. 470; Brown v. Feldwert, 46 Or. 363, 80 P. 414. Where a complaint alleges the execution by a defendant of a certain instrument, defendant's answer thereto cannot be qualified. He must either positively admit or deny the same without qualification, for the reason that the truth of the matter is presumably within his knowledge. 1 Enc. of Pleading and Practice, pp. 811-815; Knight v. Hamakar, 40 Or. 424, 67 P. 107.

Where a defendant denies on information and belief, a fact presumably within his knowledge, such denial will be disregarded as sham, and the allegation of the complaint be deemed admitted. Heatherly v. Hadley, 2 Or. 269; Brown v. Scott, 25 Cal. 189; Raleigh R.R. Co. v. Pullman Co., 122 Ga. 700, 50 S.E. 1008.

It is claimed on behalf of defendant that because the sufficiency of the answer was not challenged by a motion to strike, or by a demurrer, but was drawn in question upon the admission of the evidence, a liberal construction of the allegations of fact should be adopted and all intendments in favor of the pleadings should be invoked. This rule is applicable where there is an informal or defective statement of a good cause of action or defense. But the question in this case is not as to the formality of the answer, but as to its construction in order to ascertain what is admitted and what is denied. The defense that the policy of insurance in question was not issued and never became a binding contract, and another defense, that it is a binding contract and contains provisions by virtue of which defendant's liability is reduced in amount, or by virtue of which plaintiff agreed to do something which he has not done, are inconsistent. Both cannot be true. The proof of one necessarily disproves the other. It is manifest upon the face of the answer in this case that defendant did not have both of these defenses, and therefore the statute which only authorizes the pleading of all defenses which the defendant has does not authorize these two defenses.

Counsel for defendant contend that the inconsistency of the defenses is removed by pleading the affirmative defenses with a qualification; that the defendant does not admit directly in the affirmative defenses that the policy was issued and is a binding contract, but only does so "if the plaintiff is in possession of the said policy." The effect of the qualification is the same as though the defendant had denied the execution of the policy on information and belief. It is well settled that a denial on information and belief of a party's own acts or the acts of a party's agent raises no issue, because a party is not allowed under the Code to deny on information and belief as to his own acts. A party to a contract is presumed to know whether the contract was entered into or not. He cannot say that he does not know whether it was made or not. He must either say that he did make it, or that he did not. Heatherly v. Hadley, 2 Or. 269, 273; Knight v. Hamakar, 40 Or. 424, 432, 67 P. 107. The court did not err in refusing to permit the defendant to occupy the position in which it could say that it did not make the contract, but that, if plaintiff should prove that it did, then there were provisions in the contract binding on plaintiff which were not complied with. We think that the trial court properly held the separate defenses to be an admission that the policy had been issued to plaintiff.

The case at bar is not like that of Veasey v. Humphreys, supra where the defendant was not a party to the chattel mortgage in question, and had no presumptive knowledge about it. He was the sheriff, and as such had seized certain cattle under a writ of attachment and an execution as belonging to one Douney, the attachment and judgment debtor. Plaintiff brought replevin to recover the cattle, and alleged the execution to him of a chattel mortgage on the cattle by Douney and Nicholson, as partners. The defendant sheriff answered, denying the execution of the chattel mortgage, and in a further separate defense alleged that Nicholson attempted to execute said chattel mortgage pursuant to a conspiracy to defraud, and without consideration, etc. "It has been held by this court," says Mr. Chief Justice Bean in Baines...