Sun Ins. Office of London v. Heiderer

• Decision Date: 06 July 1908
• Citation: 99 P. 39,44 Colo. 293
• Parties: SUN INS. OFFICE OF LONDON v. HEIDERER.
• Court: Colorado Supreme Court

99 P. 39

44 Colo. 293

SUN INS. OFFICE OF LONDON v. HEIDERER.

Supreme Court of Colorado

July 6, 1908

Rehearing Denied Jan. 11, 1909.

Appeal from District Court, City and County of Denver; P. L. Palmer Judge.

Action by Rose C. Heiderer against the Sun Insurance Office of London. Judgment for plaintiff, and defendant appeals. Affirmed.

The appellant (defendant below), an insurance company, insured a frame building belonging to the appellee (plaintiff below) for the sum of $150. Shortly thereafter she sold the insured property to one Max Rosenthal, and, with the consent of the company, assigned the insurance policy to him. To secure the payment of a part of the purchase price, she took from him a mortgage on the property for the sum of $500. At her request the company executed and attached to the policy a mortgage clause, which provided that, if any loss should occur under the policy, it should be paid to appellee as mortgagee, and if the company should claim that no liability existed as to the mortgagor, it should, upon such payment, be subrogated to the rights of the mortgagee under the mortgage to the extent of such payment, and should receive an assignment pro tanto of the mortgage security. The building was thereafter destroyed by fire, and, upon proof of loss being furnished by Rosenthal, the company, claiming that no liability existed as to him, demanded and received from appellee an assignment of her mortgage to the extent of $150, and thereupon paid to her that amount, and took a joint receipt therefor from her and Rosenthal, and the policy was surrendered and canceled. Rosenthal, not having received from the company any payment or benefit for the loss suffered by reason of the fire transferred and assigned whatever claim he had for such loss to appellee, who made a demand upon the company for payment of the amount of the insurance provided in the policy, and upon its refusal to pay the same she instituted this action setting up in her complaint and basing her right to recover upon the foregoing facts. The appellant answered, substantially admitting the averments of the complaint, admitted that Rosenthal had received no benefit or payment whatever or any insurance for the loss or damage suffered by reason of the fire, that the money was paid to the mortgagee and the mortgage was assigned pro tanto, but averred as a defense to the right of appellee to recover in this action that 'the said Max Rosenthal has suffered no loss or damage by reason of said fire, because the said policy of insurance, which was for the sum of $150, had been assigned back prior to the said fire by the said Max Rosenthal to the plaintiff, Rose C. Heiderer, as mortgagee, who has collected the same as aforesaid.' The only evidence offered upon the trial of the cause was documentary. That of the plaintiff consisted only of the assignment of the claim; every other averment of the complaint being admitted. The defendant introduced the policy of insurance with the attached mortgage clause, the proof and statement of loss furnished the claimant by Rosenthal, the draft for $150 in payment of the loss and the receipt therefor signed by Rosenthal and appellee, and the articles of subrogation and assignment of interest in the mortgage to the defendant by the appellee. Judgment was rendered in favor of the plaintiff and against the defendant for the sum of $168.30. A motion for new trial was filed upon the grounds (1) of accident and surprise which ordinary prudence could not have guarded against; and (2) the insufficiency of the evidence to justify the finding and decision, and because said decision is against the law. In connection with this motion, the appellant asked leave to file an amendment to its answer, a copy of which was served upon the attorney for appellee and copies of the affidavits of D. C. Packard and Sterling B. Toney in support thereof. The affidavit of Packard was to the effect that Rosenthal had kept and used on the premises a gasoline blow-pipe, and had kept gasoline therein, in violation of the express terms of the policy; that these things increased the hazard of the risk, and that the blow-pipe and the gasoline caused the fire and the loss under the policy; that, prior to the filing of the answer in the cause, he explained and stated all these things to its attorneys; and that the attorneys were of the professional opinion that, inasmuch as all of these facts would appear from and by the documentary evidence which would be introduced, it was unnecessary to plead said facts as a separate defense, and for that reason they were not pleaded or stated by way of answer. The affidavit of Sterling B. Toney, a member of the firm employed by the defendant company to defend the action, was, in substance, that all the facts stated by Packard in his affidavit were stated and explained to him, and that he was of the opinion at the time he drew the answer that the plaintiff, by the averments of her complaint, had stated herself out of court, and that it was unnecessary and would have been bad pleading to have pleaded any violations by Rosenthal of the covenants in the policy contract, and that, if the opinion of the court in deciding the cause was predicated upon the failure of the defendant to plead in its answer the violation of the covenants of the policy by Rosenthal, in justice and fairness the defendant should be granted a new trial, and be allowed to plead such violation. The court below denied the application to amend the answer and overruled the motion for a new trial.

T. J. O'Donnell and J. W. Graham, Jr., for appellant.

John R. Smith, for appellee.

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

It will be seen that the answer does not contain any defense to this action based upon the ground that Rosenthal had violated any of the conditions of the policy, or set out the facts upon which the appellant predicated its claim that no...