Zengerle v. Commonwealth Ins. Co. of N.Y., 5949

• Decision Date: 16 December 1955
• Docket Number: No. 5949,5949
• Parties: Jacob H. ZENGERLE et al., Appellees, v. The COMMONWEALTH INSURANCE COMPANY OF NEW YORK, a Corporation, and Arthur H. Abernathy, Appellants.
• Court: New Mexico Supreme Court

Page 1099

291 P.2d 1099

60 N.M. 379

Jacob H. ZENGERLE et al., Appellees, v. The COMMONWEALTH INSURANCE COMPANY OF NEW YORK, a

Corporation, and Arthur H. Abernathy, Appellants.

No. 5949.

Supreme Court of New Mexico.

Dec. 16, 1955.

Rehearing Denied Jan. 19, 1956.

Simms & Modrall, George T. Harris, Jr., Daniel A. Sisk, Albuquerque, for appellants.

Merritt W. Oldaker, Roy E. Miller, Jr., Albuquerque, for appellees.

LUJAN, Justice.

This is an appeal from a summary judgment entered in favor of plaintiffs and defendants appeal.

The record discloses that on December 1, 1951, at about 9:30 p. m. a general merchandising store, located in San Antonio Socorro County, New Mexico, and owned by the plaintiffs and appellees, was totally destroyed by fire; that at that time appellees carried two policies of fire insurance covering this building and the contents therein, one with the appellant, the Commonwealth Insurance Company of New York, and one with Hardware Mutual Fire Insurance Company. The liability of the Commonwealth Insurance Company of New York and Arthur H. Abernathy, its agent, is in litigation.

The plaintiffs in their complaint filed on November 26, 1952, alleged that the defendant, the Commonwealth Insurance Company, was a corporation organized and existing under and by virtue of the laws of New York and authorized to do business in New Mexico; that the defendant Arthur H. Abernathy is a licensed insurance agent under the laws of New Mexico; that on November 20, 1951, plaintiffs were the owners of the building and contents of a general merchandising store known as 'Zengerle's' in San Antonio, Socorro County, New Mexico; that on or about aforesaid date Arthur H. Abernathy solicited fire and extended coverage insurance on said building and contents therein; that plaintiffs are informed and believe that Abernathy was at all times acting as agent of Cobb & Stebbins of Denver, Colorado, general agents in and for New Mexico of defendant insurance company, and as such agent was acting within the actual and apparent scope of his authority with respect thereto; that as a result of said solicitation an oral contract was entered into with Abernathy whereby he agreed to procure a policy of fire insurance effective December 1, 1951, in the principal amount of $12,000 on the building and $5,000 on the contents for fire and extended coverage; that the rate on the building was to be approximately $1.65 per hundred and the rate on the contents to be approximately $1.80 per hundred; that the premium was to be paid upon delivery of the policy; that there being no agreement between them as to the remaining contents of said policy, it is presumed that the provisions of standard policy of fire insurance as set forth in Section 60-645 N.M.S.A., of 1941 Compilation, 1951 Supplement were intended by the parties; that plaintiffs are informed and believe that on or about aforesaid date Abernathy notified his principals Cobb & Stebbins, and defendant insurance company, by notice to the general agents that he had contracted as aforesaid, and requested a policy be issued upon the terms aforesaid; said policy to be forwarded to Abernathy for delivery to plaintiffs as soon as possible; that at or about 9:30 p. m., on or about December 1, 1951, said store building and contents therein were totally destroyed by fire, resulting in loss to plaintiffs in the sum of $17,551.28; that no notice of rejection or cancellation of the policy contracted for and no policy of fire insurance as contracted for has ever been delivered to plaintiffs by either Abernathy, Cobb & Stebbins or the insurance company, although demand has been made upon Abernathy, as an individual and local agent for Cobb & Stebbins, and the insurance company; that the plaintiffs at the time of the fire also carried additional insurance upon the premises with Hardware Dealers Mutual Insurance Company in the amount of $8,000 on the building and $8,000 on the contents; that under the policy contracted for, the defendant insurance company is liable for the sum of $9,217.51, which is the proportion of the total loss which the amount insured under the policy contracted for bears to the whole insurance covering the property against the peril herein involved, and demand has been made therefore upon defendant insurance company, Cobb & Stebbins and Arthur H. Abernathy; that all conditions precedent to recovery under the policy contracted for have been complied with or have occurred; that failure of defendant Abernathy to procure the policy of insurance contracted for constituted a breach of the oral contract; and the plaintiffs pray judgment, etc.

On January 20, 1953, the defendants answered, that the complaint fails to state a cause of action upon which relief can be granted; deny every material allegation in said complaint; and as a further separate and alternative defense allege that all arrangements between the plaintiff Jacob H. Zengerle and Arthur H. Abernathy and any agreement reached between them prior to December 1, 1951 pertaining to a contract of insurance was based upon a mutual mistake of fact, in that, all material times prior to December 1, 1951, the plaintiff Jacob H. Zengerle and the defendant Arthur H. Abernathy mutually believed the expiration date of the existing fire insurance coverage which the plaintiff had with the ...