Opinion
November 5, 1953 —
December 1, 1953.
APPEAL from a judgment of the circuit court for Jackson county: BRUCE F. BEILFUSS, Circuit Judge. Reversed.
For the appellant there was a brief and oral argument by Frank L. Morrow of Eau Claire.
For the respondent there was a brief by Lehner, Lehner Behling and Adolph P. Lehner, all of Oconto Falls, and oral argument by Howard N. Lehner.
This action was brought to recover damages to plaintiff's car resulting from a fire, under the terms of an insurance policy issued by the defendant to the plaintiff. The policy was effective on May 8, 1951, and insured a 1941 Cadillac automobile owned by the plaintiff against loss by fire and other hazards. The policy was for a term of three months, and the premium thereon was $35.50. The policy was renewed, effective August 8, 1951, and again effective November 8, 1951, the last premium being $39.75. In August, 1951, the plaintiff disposed of his 1941-model automobile and purchased a 1948-model Cadillac. This was reported to the defendant and a transfer-of-insurance indorsement was issued, effective August 13, 1951.
Plaintiff made application for the insurance to the Linton Insurance Agency of Eau Claire. This agency forwarded plaintiff's application to the defendant and the name "Linton Ins. Agency" is typed in the application as agent. The policy was delivered to the plaintiff through the Linton Insurance Agency, which attached a gummed label thereto containing its name. Premiums were paid through the agency. The application for insurance disclosed that there was a mortgage on the 1941-model car in favor of the Eau Claire Citizens Loan Company of Eau Claire in an undisclosed amount and the policy contained a loss-payable indorsement providing that any loss under the policy is payable to the Eau Claire Citizens Loan Company as its interest may appear.
The 1948 automobile was damaged by fire on November 13, 1951. This action was brought to recover the damages. One of the paragraphs in the defendant's answer reads as follows:
"4. Denies that the automobile referred to in the plaintiff's complaint was protected by any policy of insurance issued by the defendant, at the time of the fire, and alleges specifically that on the date of the fire, which occurred, as defendant had been informed, on November 13, 1951, said automobile was not protected by any policy of insurance issued by the defendant, and that any coverage, if any there was, at any time previous to said date, had theretofore been canceled, or had expired."
For a further defense the defendant pleaded fraud.
The plaintiff established a prima facie case and rested. The defendant called but one witness, the register of deeds for Jackson county. Through this witness three chattel mortgages given by plaintiff to the Eau Claire Citizens Loan Company were placed in evidence. The first, in the amount of $758.68, was dated April 3, 1950, and filed April 8, 1950, on the 1941 Cadillac; the second was in the amount of $972, dated June 5, 1950, and filed June 9, 1950, on the same automobile; the third, for $4,698, was dated October 8, 1951, and filed October 13, 1951, and covered the 1948 Cadillac and a large list of other personal property. The defendant then rested.
The case was tried to the court without a jury and briefs were filed with the court. Findings of fact and conclusions of law dated December 22, 1952, were filed, and judgment was entered December 29, 1952, dismissing the complaint of the plaintiff, with costs to the defendant. The plaintiff appealed from said judgment.
The briefs that were filed with the trial court were not made a part of the record, but from the briefs and arguments in this court it is evident that the defendant, in its trial brief, raised the question of a policy defense. Under the exclusions in the policy there is a provision that the policy does not apply "while the automobile is subject to any . . . mortgage or other incumbrance not specifically declared and described in this policy."
The plaintiff contends that this policy defense was an affirmative defense that must be pleaded separately. The trial court held that par. 4, which is quoted above, was sufficient to raise the issue of a policy defense, and if not, he ordered the pleadings amended to conform to the proof.
A denial that plaintiff's automobile was protected by any policy of insurance issued by the defendant at the time of the fire is a conclusion, and did not sufficiently inform the plaintiff of the issue so that he offered any proof thereon. The defendant offered no proof as to cancellation or fraud, which were set up as defenses. A pretrial conference was held by the trial court and at that time the defendant only insisted that the Eau Claire Citizens Loan Company be made a party to the action. Prior to the trial a written assignment of its interest to the plaintiff was filed with the trial court. The defendant offered no amendment to its pleadings during or after the trial.
The plaintiff does not dispute the validity of the exclusion clause in the policy. During the trial the manager of the Linton Insurance Agency testified that he was not an agent for the defendant company. The court referred to this in its memorandum decision and was undoubtedly influenced by that statement. The matter was not explored further. It did not appear to be material at the time, but upon a new trial, the plaintiff now contends he can prove that the Linton Insurance Agency was an agent for the defendant under the provisions of sec. 209.05, Stats., as the same was applied in the case of Pouwels v. Cheese Makers Mut. Casualty Co. 255 Wis. 101, 37 N.W.2d 869. The plaintiff further contends that he will be able to prove that the Linton Insurance Agency, as defendant's agent, had knowledge of all of said chattel mortgages and notified the defendant thereof. He infers that these facts, when proven, will entitle him to a reformation of the policy.
It is apparent that the real controversy has not been fully tried and a new trial is granted to the plaintiff as provided by sec. 251.09, Stats. Prior to the new trial the defendant may amend its answer to set up any defense it feels that it has. The plaintiff should then be permitted to amend his complaint and to ask for other and further relief if he so desires, so that the real controversy may be tried.
By the Court. — Judgment reversed and cause remanded for a new trial.