Western Assur. Co. v. McCarty

• Decision Date: 17 November 1897
• Citation: 48 N.E. 265,18 Ind.App. 449
• Parties: WESTERN ASSUR. CO. v. McCARTY.
• Court: Indiana Appellate Court

18 Ind.App. 449

48 N.E. 265

WESTERN ASSUR. CO.

v.McCARTY.

Appellate Court of Indiana.

Nov. 17, 1897.

Appeal from circuit court, Pike county; E. A. Ely, Judge.

Action by Patrick A. McCarty against the Western Assurance Company. From a judgment for plaintiff, defendant appeals. Reversed.

Chambers, Pickens & Moores, for appellant. Richardson & Taylor, for appellee.

COMSTOCK, J.

Action brought by appellee against appellant upon a policy of fire insurance executed by appellant, insuring certain personal property belonging to one James W. Kelly, who assigned said policy and claim to appellee, who brought suit upon the same, making said Kelly a co-defendant. Issues were formed and tried upon an amended complaint. To the complaint appellant filed an answer in two paragraphs: First, general denial; second, the incumbrance by mortgage, whereby the provisions of the policy were violated, and the policy rendered void. To the second paragraph of answer the appellee replied in three paragraphs: First, general denial; second, that defendant company had knowledge of the incumbrance, and thereby waived that provision of its policy; the third charges fraud against defendant in receiving premiums for the policy, knowing at the time that the property insured was incumbered with a chattel mortgage. Defendant Kelly was defaulted, and the cause submitted to the court for trial without the intervention of a jury. At the request of the defendant the court made a special finding of facts, and stated conclusions of law thereon. Some days after the trial of the cause, and while the court had the same under advisement, leave was granted plaintiff to file an additional paragraph of complaint; to which ruling appellant, at the proper time, excepted, and filed its bill of exceptions. The cause was then continued until the following term of court, when the court filed special findings and conclusions of law thereon. Appellant excepted to each of the conclusions of law. Judgment was rendered upon the finding of facts and conclusions of law in favor of plaintiff. Defendant's motion for a new trial was overruled.

The first, second, third, and fourth assignments of error question the sufficiency of the complaint; the fifth is that the court erred in its conclusions of law stated upon the findings, and each of them; the sixth, that the court erred in rendering judgment for the plaintiff against the defendant the Western Assurance Company; the seventh, the court erred in overruling defendant the Western Assurance Company's motion for a new trial. To the sufficiency of the complaint appellant makes three objections: (1) That no exhibit was filed therewith, and the policy was in no legal way made a part thereof; (2) it appearing from the averments of the amended complaint that James W. Kelly, the insured, had sold and assigned the policy of insurance, and the claim arising thereunder from said loss, to the plaintiff by delivery, it is taken as an averment that the policy had been assigned to the plaintiff by Kelly, the complaint is bad, because it does not set out the assignment or indorsement by which the policy was transferred; (3) that there is no averment in the complaint that Kelly, at the time of the loss by fire, was the owner of the property insured, and alleged to have been destroyed.

As to the first objection, whenever an action or defense is founded upon a written contract. the original, or a copy thereof, must be filed with the complaint or answer. Sinker v. Fletcher, 61 Ind. 276;Petty v. Board, etc., 70 Ind. 290. The pleading must contain some reference to the exhibit filed therewith, that the identity of the exhibit may appear. Bennett v. Wainright, 16 Ind. 211;Insurance Co. v. Walser, 22 Ind. 81. An amended takes the place of an original complaint. With the original complaint, which is in the record, a copy of the policy was filed as an exhibit. When the amended complaint was filed, the original complaint went out of the record, together with the exhibits which were made a part thereof. Britz v. Johnson, 65 Ind. 561;Westerman v. Foster, 57 Ind. 411;Weaver v. Apple (Ind. Sup.) 46 N. E. 642. The record discloses that the policy was not made a part of the second paragraph of the amended complaint. The demurrer should therefore have been sustained.

The second objection urged to the complaint is that neither the first nor second paragraphs of the amended complaint sets out an assignment by Kelly of the policy. The allegation referred to is “that after said fire, and before the bringing of this action, the said defendant, James W. Kelly, for value received, sold and assigned the policy in suit, and the claim arising thereunder by reason of said loss by fire, to the plaintiff herein, by the delivery of said policy.” This was a claim which could be assigned by delivery, which assignment would give the assignee authority to bring suit thereon, making the assignor or the insured a party defendant. A contract of insurance may be assigned in parol. Insurance Co. v. Sanders (Ind. App.) 46 N. E. 535, and the authorities there cited. The objection was not well taken.

The third objection to the complaint is that it contains no averment in either paragraph that Kelly, at the time of the fire, was the owner of the property insured and destroyed. It has been held in a number of cases that this is a necessary averment. Insurance Co. v. Johnson, 46 Ind. 315;Insurance Co. v. Duke, 75 Ind. 535;Insurance Co. v. Kittles, 81 Ind. 96;Insurance Co. v. Bogeman, 4 Ind. App. 237 30 N. E. 7;Insurance Co. v. Black, 80 Ind. 513. For this reason, also, the demurrer should have been sustained. Nor can we say that the absence of this averment of a substantive material fact was harmless because the court made a special finding of facts. We do not understand that the decisions of the supreme and of this court to the effect that an error in overruling a demurrer to a defective complaint is harmless, when there is a special finding of facts, mean that all defects in pleadings are thus cured. Hackney, J., speaking for the court, said, in Jones v. Casler, 139 Ind. 389, 38 N. E. 814: “Verdicts do not cure defects which consist in the entire omission of facts essential to a cause of action.” See, also, Assurance Co. v. Koontz (Ind. App.) 46 N. E. 95;Rhodes v. Hilligoss (Ind. App.) 45 N. E. 666. This is not an instance of a defective averment, but the entire omission of a necessary averment. Nor can a cause be said to have been fairly tried if there be a finding of the existence of a material fact which was not averred in the complaint, and which was not, therefore, put in issue. See, also, Railroad Co. v. Kurtz, 10 Ind. App. 68, 35 N. E. 201, and 37 N. E. 303. For these reasons the judgment of the trial court must be reversed, but, as the question of the waiver of proof of loss discussed by counsel is likely to arise upon another trial, we pass upon it at this time.

Counsel for appellant contend that the preliminary findings of the court do not show facts to warrant the ultimate finding that the defendant waived the making of proofs of loss. The condition in the policy as to proof of loss reads as follows: “If fire occur, the insured shall give immediate notice of any loss thereby in writing to this company, protect the property from further damage,” etc., “and within sixty days after the fire, unless such time is extended in writing by this company, shall render a statement to the company, signed and sworn to by said insured, stating the knowledge and belief of the insured as to...