Welles v. Colorado Nat. Life Assur. Co.

• Decision Date: 06 February 1911
• Citation: 113 P. 524,49 Colo. 508
• Parties: WILLES v. COLORADO NAT. LIFE ASSUR. CO.
• Court: Colorado Supreme Court

113 P. 524

49 Colo. 508

WILLES v. COLORADO NAT. LIFE ASSUR. CO.

Supreme Court of Colorado

February 6, 1911

Error to District Court, Larimer County; James E. Garrigues, Judge.

Action by the Colorado National Life Assurance Company against Jesse C. Welles. Judgment for plaintiff, and defendant brings error. Affirmed.

J. F Farrar, for plaintiff in error.

Charles Melvin Neff, for defendant in error.

HILL J.

The defendant in error brought this action upon a promissory note. Its complaint alleges its corporate existence; also that the defendant (plaintiff in error here) made and delivered to Charles N. Settele his certain promissory note in writing, wherein and whereby, for value received, he promised to pay to the order of Settele, at a certain time, a certain amount and interest (a copy of the note, with its indorsements, was set forth); that, before its maturity, it was duly indorsed and delivered to the plaintiff who became, and now is, the owner and holder thereof; that no part of said note has been paid; that there is due thereon from the defendant to plaintiff a certain amount, with interest; and prayer for judgment. A demurrer to the answer was sustained. Defendant elected to stand upon his demurrer. Judgment was rendered against him, and he brings the case here for review upon error.

The answer states: First. That as to the corporate existence of the plaintiff, the indorsement of the note to it, and as to it being the owner and holder thereof defendant has not and cannot obtain sufficient information upon which to base a belief, and hence denies these allegations. These denials are not in the form prescribed by the Code, and for that reason were not sufficient to constitute a defense. This section requires it to be stated that one has not the knowledge or information upon which to base a belief. The statutes appear to make a distinction between the words 'knowledge' and 'information.' It has repeatedly been held by this court that, in order to take advantage of this privilege in a pleading, the formula prescribed by the Code must be exactly followed, because in no other manner can the defendant satisfy its demands and thereby raise a substantial issue. James v. McPhee, Assignee, 9 Colo. 486, 13 P. 535; Haney v. People, 12 Colo. 345, 21 P. 39; Grand Valley Irrigation Co. v. Lesher et al., 28 Colo. 273, 65 P. 44; D N.D. L. Co. v. Burns, 30 Colo. 283, 70 P. 413; Solomon v. Brodie, 10 Colo.App. 353, 50 P. 1045. This portion of the answer also denies each and every allegation of that portion of the complaint wherein it was alleged that no part of said note had been paid, and that a certain amount stated was due thereon with interest from a certain date stated. This constitutes no part of any defense. Eliminating the question of its being a negative pregnant, it is the settled law of this state that payment is an affirmative defense, and must be specially pleaded. Esbensen v. Hover, 3 Colo.App. 467, 33 P. 1008; Perot v. Cooper, 17 Colo. 80, 28 P. 391, 31 Am.St.Rep. 258; Thomas v. Carey, 26 Colo. 485, 58 P. 1093; Florence O. & R. Co. v. First Nat. Bank, 38 Colo. 119, 88 P. 182; Harvey v. D. & R. G. R. R. Co., 44 Colo. 258, 99 P. 31, 130 Am.St.Rep. 120. In addition to the denials, the defendant's answer contained four other distinct alleged defenses. The first was to the effect that Settele, as the agent of the plaintiff, entered into an agreement with the defendant, wherein it was agreed that the plaintiff company should issue unto defendant a policy of insurance; that said insurance should cost defendant no monetary consideration for the first year, but, in lieu thereof, he should introduce the agent Settele to certain persons whom Settlele was desirous of securing as patrons for the company; that Settele represented unto him that it would be necessary for him to execute his note for the amount as premium in order that the proceedings might have the appearance of legality; that said note should at no time be considered a legal obligation against defendant; that, pursuant to the terms of this agreement, a policy of insurance was issued by plaintiff company to said defendant, who, relying upon the agreement with said Settele, delivered the note for the purpose mentioned; that said note was the one sued upon, and that he, the defendant, was ready, willing, and able to introduce Settele to the persons mentioned in the agreement. By the terms of the note, the defendant was bound to pay a sum of money without conditions. By the terms of the alleged parol contract the note was not to be paid at all. Waiving other questions raised concerning its insufficiency, the substance of this defense is to allow a contemporaneous oral agreement to violate the provisions of a written contract. That this cannot be done, is elementary. Fitzgerald v. Burke, 14 Colo. 559, 23 P. 993; Cooper v. German Nat. Bank, 9 Colo.App. 169, 47 P. 1041; Atherton v. Dearmond, 33 Iowa 353.

The second and further defense to the complaint, in substance, alleges: (1) That on or about the 15th of April 1906, said plaintiff company issued unto said Welles its certain policy of life insurance in accordance with the terms of the agreement set out between the said Welles and the said Settele as agent of said company. (2) That shortly thereafter the said plaintiff company notified said defendant Welles to return the policy heretofore mentioned issued to him, assigning as its reason that it was necessary for them to change said policy by reason of a ruling of the Commissioner of Insurance of the state of Colorado effecting said policy, that thereupon the said defendant Welles did return unto said plaintiff herein said policy of insurance and the same was thereupon canceled. (3) That the consideration for the said note alleged in said complaint thereupon failed. The principal difficulty with this purported defense is that is nowhere states that the note in controversy was given in payment for this insurance policy. Other objections pertaining to it need not be considered. The pleader simply advises the policy was issued in accordance with the terms of the agreement set out between the said Welles and the said Settele, as agent of said company, but has failed in this defense to set out this agreement, or state its substance, or in any manner connect it with this note. We might presume that the pleader had in mind the agreement between himself and the agent, which he sets out in his first further answer and defense, but he does not so state or make any reference to it. It is the settled practice in this state that a party may set out as many distinct and separate defenses as he may have, but each separate defense must contain a complete and separate answer and defense to the cause of action, which it is intended to answer, and must be a complete answer and defense within itself, including any other matters made a part thereof by proper reference. In this respect this defense is totally defective. Western Union Telegraph Co. v. Eyser, 2 Colo. 141; People ex rel. v. Lothrop, etc., 3 Colo. 428. As said by Judge Thompson in the case of Travelers' Insurance Co. v. Redfield, 6 Colo.App. 196, 40 P. 197: 'Each answer is a separate defense, complete within itself, and must be tested by its own allegations.'

The third and further defense, in substance, alleges: (1) That subsequent to the time upon which the said plaintiff herein recalled and canceled its policy issued to said defendants in accordance...