Zimbelman v. Hartford Fire Ins. Co.
| Decision Date | 24 April 1933 |
| Docket Number | 12732. |
| Citation | 92 Colo. 536,22 P.2d 866 |
| Parties | ZIMBELMAN et al. v. HARTFORD FIRE INS. CO. |
| Court | Colorado Supreme Court |
In Department.
Error to District Court, Weld County; Robert G. Smith, Judge.
Action by Elisabeth Zimbelman and others against the Hartford Fire Insurance Company. Judgment of dismissal, and plaintiffs bring error.
Affirmed.
Oliver W. Toll, of Denver, and Albert P. Fischer of Fort Collins, for plaintiffs in error.
Hubert D. Waldo, Jr., of Greeley, and Paul W. Lee, George H. Shaw and Donald C. McCreery, all of Denver, for defendant in error.
This is an action by Elisabeth Zimbelman, John J. Zimbelman, and Oliver W. Toll as plaintiffs below, plaintiffs in error here against the Hartford Fire Insurance Company, defendant below defendant in error here, to recover a fire loss on a barn located on a ranch in Weld county, Colo., under a fire insurance policy thereon issued by the company to plaintiff Toll on January 26, 1926. The barn was destroyed by fire March 31, 1928. The defendant's demurrer to the complaint, because of insufficient facts to constitute a cause of action and for misjoinder of the parties plaintiff, was sustained by the district court upon both grounds. The plaintiffs elected to stand upon the complaint whereupon the court entered a judgment dismissing the action and plaintiffs are here with their writ of error.
The essential allegations of the complaint are in substance as follows: Plaintiff Toll, on January 26, 1926, owned a ranch property in Weld county, and on that day there was issued to him by the defendant insurance company a policy of fire insurance upon a barn situate thereon. The provisions of the policy which are material here are the following: It is stipulated and agreed that if the property or any part thereof shall become mortgaged or encumbered, or in case any change shall take place in title or interest or possession, or if the assured shall not be the sole and unconditional owner in fee of said property, or if this policy shall be assigned without the written consent hereon, then in each and every one of the above cases this policy shlll be null and void.
It is hereby understood and agreed by and between this company and the owner of the barn that this policy is made and accepted in reference to the foregoing terms and conditions, and that a breach of any of its conditions shall forfeit this entire policy as to all of the subjects of insurance named herein.
This policy, or any indorsements thereon, or attached thereto, of any kind, shall not be valid until countersigned by the secretary of general agent of the Farm Department at Chicago, Ill., who alone shall have power or authority to waive or alter any of the terms or conditions of this policy or to make or attach endorsements hereon.
This policy is not assignable for the purposes of collateral security, but only when there has been an actual sale and transfer of the title to the property insured and no as signment to the new owner will be valid until and unless written consent is endorsed hereon by the company at its Western Farm Department office in Chicago, Ill.
After the issuance of this policy and on October 26, 1927, the plaintiff Toll entered into an agreement for the sale of the ranch property, including the barn upon which the policy of insurance had been issued, to the plaintiffs Zimbelman and his wife, and pursuant to such agreement in January, 1928, conveyed the premises upon which this barn was located to the plaintiff Elisabeth Zimbelman by warranty deed, and about the same time the two Zimbelmans executed and delivered to plaintiff Toll their deed of trust upon the premises to the public trustee of Weld county to secure the balance of the purchase price of $11,000 out of the total consideration of $11,500. No assignment of the policy by Toll was made to the Zimbelmans, or either of them, nor did Toll or his grantees apply to defendant for its consent to such transfer. Thereafter, on March 31, 1928, the barn was destroyed by fire. The defendant company refused to pay the loss, and the prayer of the complaint is for a judgment against it for $1,000, the extent of the loss and the amount of the insurance policy.
The following additional averments of the complaint, in view of the argument made by the plaintiffs in error in their briefs should be stated as throwing light upon the nature of the controversy and the grounds relied upon for recovery on the policy of the amount of the insurance therein provided for: Plaintiffs allege that at the time of the issuance of this policy the property was in possession of tenants who had no interest in the fee and were not particularly interested in the preservation of the buildings thereon. At that time it was the intention of the plaintiff Toll to sell or otherwise dispose of his ranch to some reliable purchaser and to retain the insurance for the benefit of the parties concerned, of which the defendant had notice at the time the policy was issued. Then follows an allegation, upon which plaintiffs chiefly rely, that it is the generally established and well-known custom of insurance companies to pay all legitimate and bona fide claims promptly and not to refuse to pay the same for losses sustained within the true intent of the policies, or to equivocate or to delay over technical defenses which defeat the true intent and meaning of the policies of insurance and defeat the inherent rights of the parties thereto. There is a further allegation that when the policy was issued it was represented to Toll by the defendant, through its agent, that the defendant was issuing the policy to plaintiff in good faith; that the terms and conditions thereof were made in accordance with the dictates of right and good conscience; that the technical conditions, qualifications, and defenses contained therein limiting its liability were intended only to protect defendant from imposition and were not intended to be asserted to defeat just claims, but that any loss sustained would be adjusted in an equitable manner, and that Toll in taking out the insurance relied upon such representations and customs and usages of insurance companies in entering into the contract and paying the amount of the insurance premium on the policy. The complaint further sets forth the agreement of sale and purchase entered into between Toll and the Zimbelmans and stated that it was agreed, in event that plaintiff, Toll did not have valid title to the property, legal title should be reinvested in him and the Zimbelmans be repaid the amount of their payments, and the accounts between them should be adjusted upon an equitable basis. It is the general and well-established and well-known custom of insurance companies whenever there is a bona fide change of any interest in the ownership of property insured occurring without any intent to take advantage of the insurance company and without any tendency to increase the risk insured against, to permit a change of the beneficiary named in the policy, without objection on the part of the insurance company issuing said policy, and particularly when the newly named beneficiary is reliable and honest and is to occupy the premises, and that in such cases it is the general custom to treat and hold the written consent of the insurance company as a mere formality and not essential as affecting the rights of the parties. That it was the understanding of the parties that the property in question should be continued to be protected by the insurance policy, and that Toll should hold his rights therein, subject to the interests of the Zimbelmans as grantees, and that the Zimbelmans made and delivered to Toll their promissory note for $11,000 payable in a fixed amount of twenty-two annual installments, which note was to be, and was, secured by a trust deed upon the premises involved, and that thereafter Toll, by warranty deed, conveyed the premises to Elisabeth Zimbelman alone. The complaint admits that no mention of this alleged conditional sale and purchase was made in the warranty deed or deed of trust; nevertheless it is alleged that said agreement for reinvesting the title was and still is in full force and effect. That by virtue of the transaction between Toll and the Zimbelmans the premises passed from uninterested persons to the care and supervision of responsible persons, namely, the Zimbelmans; that because...
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