Swift v. Central Union Fire Ins. Co.

• Citation: 216 S.W. 935,279 Mo. 606
• Parties: WILLIAM S. SWIFT et al., Doing Business Under Name of AMERICAN SCALE COMPANY, v. CENTRAL UNION FIRE INSURANCE COMPANY, Appellant
• Decision Date: 01 December 1919
• Court: United States State Supreme Court of Missouri

216 S.W. 935

279 Mo. 606

WILLIAM S. SWIFT et al., Doing Business Under Name of AMERICAN SCALE COMPANY, v. CENTRAL UNION FIRE INSURANCE COMPANY, Appellant

Supreme Court of Missouri, First Division

December 1, 1919

Appeal from Jackson Circuit Court. -- Hon. Kimbrough Stone, Judge.

Reversed and remanded.

Hugh C Smith, Paul E. Bradley and Leslie J. Lyons for appellant.

(1) The petition stated no cause of action. 13 C. J. 722; 9 Cyc. 717; 4 Ency. Pl. & Pr. 928; 2 Bates on Pl. & Pr. 1252; 1 Boone's Code Pl. 29, sec. 19; Montgomery County v Auchley, 92 Mo. 126; Wesson v. Homer, 25 Mo 81; McNulty v. Collins, 7 Mo. 69; Muldrow v. Tappan, 6 Mo. 276; Robinson v. Levy, 217 Mo. 488. (2) Methods of raising defect in petition proper. Chandler v. Railway Co., 251 Mo. 592; Childs v. Ry. Co., 117 Mo. 414; Greer v. Railway Co., 173 Mo.App. 276; McGrew v. Railroad Co., 230 Mo. 496. (3) Amendment of petition after judgment was error. Porter v. Railway Co., 137 Mo.App. 293; Coleman v. Ins. Co. 69 Mo.App. 566; Shaw v. Ins. Co., 79 Mo. 420; Hart v. Harrison Wire Co., 91 Mo. 414; Andrew v. Lynch, 27 Mo. 167; O'Toole v. Lowenstein, 177 Mo.App. 662; Golden v. Morn, 126 Mo.App. 518; Sawyer v. Railway Co., 156 Mo. 468; Elfrant v. Seiler, 54 Mo. 136; Case v. Fogg, 46 Mo. 47; Merrill v. Mason, 159 Mo.App. 601, 141 S.W. 454. (4) There was a fatal variance between the pleadings and the proof. Worth v. Ins. Co., 64 Mo.App. 583; Shepard v. Boone Ins. Co., 138 Mo.App. 20; Wallette v. British-Am. Ins. Co., 91 Md. 471; Prescott v. Jones, 69 N.H. 305; Taylor v. Ins. Co., 47 Wis. 365; Idaho Co. v. Ins. Co., 8 Utah 41.

George H. English, Jr., for respondents.

(1) The court did not err in admitting testimony under the pleadings. (a) The objection was so vague and general that the court would have been justified in overruling it, even if the ground now advanced were well taken. Clark v. Loan Co., 46 Mo.App. 248. (b) The petition set forth a good cause of action, even before it was amended, and the court committed no error in overruling the objection to the introduction of any evidence. (2) The court properly permitted the amendment of the petition. R. S. 1909, sec. 2119, subdivs. 8 and 9; R. S. 1909, secs. 1851, 2120; Meyer v. Schmidt, 130 Mo.App. 333; Thomasson v. Insurance Co., 114 Mo.App. 109; Sandusky v. Courtney, 168 Mo.App. 325; Murphy v. Insurance Co., 70 Mo.App. 78; Buck v. Ry. Co., 46 Mo.App. 55. (2) There was no error in overruling the demurrers. The proof precisely sustained the pleadings, showing a valid contract whereby in consideration of plaintiffs' promise to pay the premium defendant promised to insure plaintiffs against loss by fire. This contract was in force at the time of the fire, whether it be construed to commence at the date of the conversation which constituted the contract or at the date of the expiration of the then existing policy. 19 Cyc. 673; Elliott on Contracts, par. 4203; Embrey v. Dry Goods Co., 115 Mo.App. 130, 127 Mo.App. 383; Lingenfelter v. Ins. Co., 19 Mo.App. 252; Duff v. Fire Association, 129 Mo. 460; Lowery v. Danforth, 95 Mo.App. 441; Green v. Cole, 103 Mo. 70.

OPINION

GRAVES, J.

This case reaches us upon due certification by the Kansas City Court of Appeals. Majority and minority opinions are here to enlighten us.

The action is one on a parol contract of insurance, and such contract omitting description of the property is thus averred in the petition:

"Plaintiff states that on or about the 15th day of July, 1913, defendant by its oral contract of insurance made and entered into between the plaintiff and the defendant, insured for one year the following described property, the same being the property of these plaintiffs, namely:

"Said contract of insurance so entered into as aforesaid between plaintiffs and defendant was upon the same general terms and conditions so far as those embraced in a certain written contract of insurance made and entered into between the defendant and these plaintiffs under date of July 30, 1912, which said last named contract or policy of insurance is in words and figures as follows:"

Following this was set out in haec verba an old policy on the same property, which covered a period from noon July 30, 1912, to noon July 30, 1913. Then followed averments of due performance of the contract by plaintiffs, and of the destruction of the property by fire.

Plaintiffs had judgment in the circuit court, which judgment is reversed by the majority opinion of the Court of Appeals, and the cause remanded.

Defendant urges two reasons for the reversal of the judgment: (1) that the petition failed to state a cause of action, in that it failed to allege a consideration for the pleaded parol contract of insurance; and (2) that the contract proven by the evidence was not the contract pleaded, and that this variance between proof and pleading was fatal. The trial court, after judgment, permitted the petition to be amended, so as to aver a consideration, and this is urged by plaintiff. Defendant says that the petition was fatally defective and it was error to permit its amendment. Such are the issues here.

I. This action is on a parol contract of insurance. Whilst the parties may differ as to the exact nature of the contract, there is no disagreement upon the matter of it being a parol contract. It is further clear that the petition avers no consideration for this parol contract. It is averred that defendant agreed to insure the property of plaintiffs, but in consideration of what, is not stated. The petition neither avers the payment of a premium, nor a promise to pay such. In actions upon the kind of contract here sued upon, the petition is fatally defective without an allegation as to a consideration for the promise alleged to have been made by the defendant. In 4 Ency. Plead. & Prac. it is said, at page 928:

"In the absence of statutory enactments to the contrary, it is necessary, in actions upon contracts, to allege a consideration, except in the case of contracts under seal, bills of exchange, and negotiable promissory notes, all of which by intendment of law import a consideration."

In Missouri we have a statute (Sec. 2774, R. S. 1909), but it only applies to instruments in writing. It does not cover a parol contract of insurance as here involved. The very recent work, 13 Corpus Juris, page 722, thus states the rule:

"If the contract in suit is under seal it imports a consideration and none need be alleged, and the same is true if the instrument sued on is negotiable according to the law merchant. And by statute in some jurisdiction every written contract is made to import a consideration, and where this is so, it is not necessary for plaintiff to allege the consideration. But the consideration is an essential part of a contract, and, in the absence of statutory relief from the rule, a party declaring on a contract which at common law does not import a consideration must fully and truly state the consideration as well as the promise founded on it, and must prove it as laid. If no consideration is stated, it is a fatal defect which may be taken advantage of by demurrer, motion in arrest of judgment, or writ of error."

The rule above stated is practically a rescript from 9 Cyc. p. 717.

Going to the text-writers, we find that Bliss on Code Pleading (3 Ed.), p. 400, sec. 268, says:

"Contracts, to be valid, must be founded upon a consideration, and, except as to those that import it, the consideration must be proved, and, consequently, should be stated. The petition should set it out, or show the contract to be one where the law so imports it as to dispense with the proof. Contracts, thus, at common law, importing consideration, are, first, 'deeds' -- that is, instruments of writing executed with the formality of a seal, our laws thus following the Roman, which validated contracts without consideration if 'clothed' with certain, though not the same, formalities, while those unclothed were 'nude' and invalid, unless supported by a consideration -- and, second, 'bills of exchange' and 'negotiable promissory notes.'" See also Section 308 of same author.

In Chitty's Treatise on Pleading, vol. 1, star page 300, we find:

"In declaring upon a contract not under seal, it is in all cases necessary to state that it was a contract that imports and implies consideration, as a bill of exchange or promissory note, or expressly to state the particular consideration upon which it was founded; and it is essential that the consideration stated should appear to be legally sufficient to support the promise, for the breach of which the action is brought." And further, on the same page, we find: "In declaring upon bills of exchange and promissory notes and some other legal liabilities, the mere statement of the liability which constitutes the consideration is sufficient; (1) but in other cases of simple contracts, it is necessary that the declaration should disclose a consideration, which may consist of either benefit to the defendant, or detriment to the plaintiff; (2) or the promise will appear to be nudum pactum, and the declaration will consequently be insufficient."

So in the case at bar the promise of the defendant to insure the property of the plaintiffs is a nudum pactum under the facts pleaded. No consideration for the promise is averred.

Boone's Code Pleading, page 29, sec. 19, states the rule very tersely in this language: "Where a consideration is not implied, it is the very gist of an action founded upon contract, and must be specially averred."

As seen from the authorities cited supra, the contract involved here is not one which imports a consideration, or one wherein there could be an implied consideration. In other words the very gist of this action has been omitted in...