Swift v. Fire Ins. Co. , 202 Mo. App. 419 ( 1916 )

The petition alleges that on or about July 15, 1913, the parties entered into an oral contract of insurance by which defendant, a fire insurance company, insured certain described property in plaintiffs' factory in Independence in the sum of $2400, for a period of one year, "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:" Then follows a copy of that policy which shows on its face that in consideration of the stipulations therein named and of a premium of $72, defendant had insured the same property for a period of one year from July 30, 1912, the date of the policy, in the sum of $2400. Further the petition alleges the destruction of the property by fire on August 8, 1913, while the oral contract was in force, a demand by plaintiffs for payment of the loss and defendant's refusal to comply with the demand. The petition was not attacked by demurrer and the answer was a general denial.

At the beginning of the trial a general objection to the introduction of any evidence on the ground of the failure of the petition to state a cause of action was overruled and plaintiffs introduced evidence tending to show that they had been doing business with defendant's agent in Independence who was authorized to countersign and deliver policies; that it had been the practice of the agent to issue renewal policies to plaintiffs without formal request and to charge the premiums to plaintiffs' account and that a short time before the expiration of the policy issued July 30, 1912, one of the plaintiffs and the agent had a conversation in which the latter agreed to issue a new policy in the same amount and on the same terms, except that a higher premium would be charged. It appears that defendant and other domestic insurance companies, taking advantage of a temporary withdrawal from the State of foreign companies, had raised the premium rates and the agent at Independence had issued plaintiffs a policy of $1000 in place of one for that amount which had been issued by a foreign company and was about to expire. Plaintiffs refused that policy and in an interview one of them had with the agent about that transaction the latter, in the course of the conversation, reminded him that the policy for $2400 dated July 30, 1912, was about to expire and was told by plaintiff to continue that insurance. Plaintiff testified:

"He said to me that the twenty-four hundred dollar policy would expire in a short time. . . . I told him then distinctly to renew that one, because there was no other place I could get it, and I wanted that policy continued, and he said he would do it. I understood him to say he would do it and supposed it was done. . . . I dismissed it then from my mind supposing, of course, he would renew it just as he said he would. I left town and went away soon after that supposing the insurance was taken care of."

The agent called as a witness by defendant denied such agreement and testified that because of the increase in the premium rates plaintiff, at the mentioned interview, not only refused the new policy for $1000 but also told the witness not to continue the insurance represented by the policy of July 30, 1912. After the fire plaintiffs tendered the amount of the premium and demanded payment of the loss but the tender and demand were refused and this suit followed.

The court refused defendant's request for a peremptory instruction and in the instructions to the jury declared, in substance, that plaintiffs would be entitled to recover on the hypothesis presented by their evidence that the agent of defendant, possessing authority to countersign and issue policies, had orally agreed for a stated premium to issue plaintiffs a renewal policy on the expiration of the one then in force. The jury decided the issue of fact thus defined in favor of plaintiffs and returned a verdict for the full amount of their demand. Motions for a new trial and in arrest of judgment were filed and overruled and defendant appealed.

The grounds of the motion in arrest were that the petition does not state facts sufficient to constitute a cause of action and that the verdict is not responsive to the issue tendered by the pleadings and is insufficient to support a judgment.

Counsel for defendant argue that the omission of the petition to allege the payment or tender of a premium, or, in other words, to allege a consideration for the oral promise to insure, constituted a failure to state a cause of action that could be taken advantage of at any stage of the proceeding and would not be waived by answer to the merits. Though technically the point was raised by the formal objection to the introduction of evidence, it was not brought to the actual notice of the court until the hearing of the motions for a new trial and in arrest. Plaintiffs then, over the objection of defendant, were allowed to amend the petition by interlining the words "in consideration of the promise of plaintiffs to pay defendant a certain sum then and there agreed upon as a premium" and the motions were overruled.

Defendant contends that after verdict no amendment of a petition may be made except as to mere irregularities or formal defects in the sttatement of the cause, and that a failure to allege a consideration for an oral contract of insurance is a fatal defeat which cannot be regarded as a mere irregularity, and, therefore, cannot be cured by amendment after verdict.

Under the familiar rule that a petition should be liberally construed where the defendant does not assail it by demurrer, but, by answering to the merits, accepts it as sufficient, there is much force in the argument of plaintiffs that the petition in question before its amendment, sufficiently pleaded a consideration. [Tebeau v. Ridge, 261 Mo. l.c. 558.] Passing that question and taking defendant in its position that no consideration was alleged the subject to engage our attention is to ascertain in the nature of the defect in the statement of the cause of action left by such omission. If this were an action on a written contract of insurance, the failure to allege a consideration would not constitute even an irregularity and could not successfully be made the subject of a demurrer. [Sec. 2774, R.S. 1909.]

In Johnson v. Woodmen, 119 Mo. App. l.c. 101, we applied that statute to a written contract of insurance and answering the point that the consideration was not properly pleaded in the petition, held "there was no necessity for alleging any consideration at all" since the promise to insure imported a consideration. Of course the statute by its terms being restricted to written instruments cannot apply to an oral contract of insurance and it must be conceded that under the general rules of pleading the averment of a consideration must be regarded as an essential element of a cause of action for the enforcement of such oral contract. [McNulty v. Collins, 7 Mo. 69; Hart v. Wire Co., 91 Mo. 414; County v. Auchley, 92 Mo. 126.]

The rule of the common law that a verdict for plaintiff would supply whatever of necessity must have been proved to the jury has never been extended in this State to cases where the gist of the action is omitted (Hart v. Wire Co., supra) and while a verdict will cure all mere irregularities and imperfections in the statement of a cause of action which contains in an imperfect form all of the essential ingredients of a good cause, it will not cure a statement which fails to allege a constitutive fact, and the objection that the petition fails to state a cause of action is not waived by the failure to demur and may be raised for the first time in the motion in arrest. [Andrews v. Lynch, 27 Mo. 167; Hart v. Wire Co., supra; Golden v. Moore, 126 Mo. App. 518; Elfrank v. Seiler, 54 Mo. 134.]

But where the omitted fact is consistent with the facts pleaded and with them would constitute a cause of action, the omission may be supplied by amendment. It cannot be doubted that if the defect in question had been made the subject of an attack on the petition by demurrer plaintiff would have been entitled to cure it by amendment and in the furtherance of justice the amendment could be allowed by the court whenever his attention was first specifically directed to the defect which, in this case, was by motion in arrest. [Case v. Fogg, 46 Mo. 44; Sawyer v. Railroad,156 Mo. 468; Elfrank v. Seiler, supra; Hart v. Wire Co., supra; Tebeau v. Ridge, 261 Mo. l.c. 559; Golden v. Moore, supra.]

The pertinent rule is that the parties may try their cause as if the omitted averment was in the petition or their pleadings, and it is perfectly competent for the court, even after verdict, to amend in accordance with the proofs. [Sawyer v. Railroad, supra.] Under this settled rule of practice the court did not err in allowing plaintiff to supply the omitted averment by amendment made on the hearing of the motion in arrest, and the sole remaining question is whether or not such amendment compelled the granting of a new trial.

In Stid v. Railroad, 211 Mo. l.c. 415, the Supreme Court, in defining the office of the motion in arrest, say that it is not to be confounded with the motion for new trial; that if granted it does not necessarily result in a new trial, and that if an amendment be allowed, the cause, by statutory command, proceeds according to the practice of the court. If the amendment relates to a fact which the parties did not contest at the trial and did not treat as an issue, a new trial should be ordered, but if it relates to a fact without proof of which the triers of fact ought not to have given a verdict for the plaintiff and which the parties contested at the trial as one of the issues raised by the pleadings, there is no reason and no authority for the view that the court must grant a new trial and cannot treat the defect as being purely formal and, therefore, subject to the rule allowing amendments to make the pleadings conform to the proofs.

This view accords with the decisions of the Supreme Court in Case v. Fogg, supra; Sawyer v. Railroad, supra; Elfrank v. Seiler, supra; Tebeau v. Ridge, supra of this court in Golden v. Moore, supra; Merrill v. Mason, 159 Mo. App. 605; of the St. Louis Court of Appeals in O'Toole v. Lowenstein,177 Mo. App. 662; Wilkinson v. Misner, 158 Mo. App. 551; and of the Springfield Court of Appeals in Central Mfg. Co. v. Montgomery,144 Mo. App. 494.

As is well said in O'Toole v. Lowenstein, supra, l.c. 666:

"Moreover, by section 2026, Revised Statutes, 1909, the trial court is commanded, even when a judgment shall be arrested, to allow an amendment in all cases when the same amendment might have been made before trial, and the statute directs that the cause shall again proceed according to the practice of the court. Under this statute last cited, amendments may be allowed even on the hearing of the motion in arrest, as was done in Golden v. Moore, 126 Mo. App. 518, 104 S.W. 481 and the case is to proceed in accordance with the practice of the court, and this, too, without the granting of a new trial, for the reason that a motion in arrest, though sustained, does not necessarily result in a new trial. [See Stid v. Mo. Pac. Ry. Co., 211 Mo. 411, 415, 109 S.W. 663.]"

The facts of the case in hand forcibly illustrate the wisdom of the rule dispensing with a new trial where the parties have contested all the vital issues of the cause at the trial as though they were well pleaded and the triers of fact have fully considered and determined them. There was no dispute over the subject of a consideration for the alleged promise of defendant to insure plaintiffs' property, and the main issue the jury were called upon to settle was whether or not a promise was made by defendant to continue the insurance on the consideration of the reciprocal promise of plaintiffs to pay an agreed premium. Defendant insisted that no such promise to continue the insurance was made, and in the verdict the jury adopted the contention of plaintiffs on this issue and necessarily found that there was a promise and that it was supported by a consideration. What useful purpose could be served by trying these issues again, and of what right may it be said defendant has been deprived? To hold that despite the fact that the parties have been given and have availed themselves of a fair opportunity to submit their controversy to a jury another trial, nevertheless, must be ordered because of a defect in the petition which did not mislead or prejudice the defendant, would be to debase justice before the most barren of technical rules and to ignore the plain meaning and mandate of the Statute of Jeofails.

Deeming the majority opinion to be in conflict with the decisions of the Supreme Court in Stid v. Railroad, 211 Mo. 411 Tebeau v. Ridge, 261 Mo. 547; Case v. Fogg, 46 Mo. 44; Elfrank v. Seiler, 54 Mo. 134, and with the decision of the St. Louis Court of Appeals in O'Toole v. Lowenstein, 177 Mo. App. 662. I request that the case be certified to the Supreme Court.