Wright v. . Insurance Co.

BROWN, J., dissents. This action was brought to recover the amount of a policy (489) of insurance issued by the defendant to Gorman-Wright Company, "on leaf and scrap tobacco and tobacco stems, their own or held by them in trust or on condition, or sold but not delivered," to an amount not exceeding $1,500. The plaintiff alleged the insurance of the tobacco by the policy and that the defendant had agreed to transfer the insurance from the tobacco to certain machinery in the same building, the property of J. N. and P. H. Gorman, and worth $4,000. He *Page 352 further alleged that the tobacco and the machinery were totally destroyed by fire in July, 1903, during the life of the policy; "that proof of loss was promptly made out and submitted to the defendant for the payment of said policy of $1,500, which policy, as plaintiff is advised by counsel, on account of said transfer, covered said machinery in said prizehouse"; that defendant denied its liability on the policy and refused to adjust the loss and pay the amount thereof; that the policy was assigned to the plaintiff in November, 1903, after the loss occurred, and he is entitled to recover the amount thereof; and "that the defendant is justly indebted to the plaintiff in the sum of $1,500, 75 per cent of the value of said machinery being in excess of this sum." The plaintiff then demands judgment for $1,500 and interest, and for such other and further relief as he may be entitled to have in the premises. The defendant filed an answer in which it admitted the issuing of the policy and the destruction by fire of the prizery, but alleged a want of knowledge or information as to whether or not there was a total loss of the property contained therein. It denied the transfer of the insurance from the tobacco to the machinery, and also denied the transfer of the amount due on the policy to the plaintiff. The plaintiff tendered the following issues: (1) Is plaintiff the assignee of the interest of the assured, Gorman-Wright Company? (2) What was the value of the tobacco destroyed by fire? (3) What was the value of the machinery destroyed by fire? The defendant tendered issues confined to the transfer of the policy to the machinery, and the amount, if any, the plaintiff is entitled to recover for the loss (490) of the machinery. His Honor stated that he would not settle the issues at the beginning of the trial, but would hear the evidence and at its conclusion would frame such issues as he thought necessary. There was much evidence as to the transfer of the insurance to the machinery, and the proof of loss of tobacco and machinery (the value of each being shown by the proof, and the schedule annexed thereto) was put in evidence. The evidence tended to show that the tobacco stems (worth $100) belonged to the Gorman-Wright Company and the strips (worth $1,600), were held "in trust" by them for other parties. At the close of the testimony the court nonsuited the plaintiff, and he appealed. After stating the case: It must be conceded that if in any view of the testimony, considered in the most favorable light for him, the plaintiff was entitled to recover, there was error in the ruling *Page 353 of the court. Counsel in their arguments and briefs discussed principally the question whether, if the plaintiff had failed to show a transfer of the insurance from the tobacco to the machinery, there were sufficient allegations in the complaint to entitle him to recover for the loss of the tobacco or any part of it. It may be granted that the plaintiff failed to show any transfer of the insurance from the tobacco to the machinery, and yet, this being so, the insurance, of course, remained upon the tobacco, and he is entitled to recover for any loss sustained by its destruction to the amount of the policy and to the extent that he has acquired his alleged assignor's right or interest. It is very true that the complaint seems to have been drawn by the pleader for the purpose of recovering for the loss of the machinery; but this fact does not defeat the plaintiff's right to recover for the loss of the tobacco if the allegations of the complaint are otherwise (491) sufficient for that purpose. The common-law rule that every pleading shall be construed against the pleader is modified by the present Code system, which requires that all pleadings shall be liberally construed with a view of substantial justice between the parties. Code, section 260. If the complaint is merely defective in form, but a cause of action is stated in substance or by reasonable intendment, the defendant waives the defect by answering to the merits, and it is cured by verdict and sometimes by averments in the answer. When the defect is organic and vital, so that it cannot be cured by amendment, it is not waived by pleading over or by verdict, and it can be taken advantage of even in this Court. Harrison v. Garrett, 132 N.C. 172. Even where a material allegation is omitted, it is a defective statement of a cause of action merely and not a statement of a defective cause of action. Johnson v. Finch, 93 N.C. 205; Garrett v. Trotter, 65 N.C. 430;Bank v. Cocke, 127 N.C. 467. In the case at bar the plaintiff alleges the issuing of the policy and the loss of the property insured. Upon these averments he might recover (if otherwise entitled) the value of the property destroyed by fire, not exceeding the amount of the policy. The only allegation omitted is the one as to the value of the property insured at the time of the fire. But even if this allegation is essential to the statement of a complete and perfect cause of action, its omission is but a defect which can be cured by amendment and is waived by answer, as much so as the omission to allege the determination of the former action in a suit for false arrest, which was the defect in Johnson v. Finch, supra. The mere fact that the plaintiff sought to recover for the loss of the machinery does not prevent the application of that principle to this case. In Stokes v. Taylor, 104 N.C. 394, it was held that where a plaintiff sues upon a special contract and fails in his proof, (492) *Page 354 he may nevertheless recover upon a quantum meruit, if sufficient facts are alleged upon which to base such a recovery, and this can be done without amendment. Jones v. Mial, 82 N.C. 252. Under the present system of pleading and practice, any relief may be granted which is consistent with the case made by the complaint and embraced within the issue, although other and different relief may be sought by the pleader and demanded in the prayer for judgment. Clark's Code, section 425, and notes. Any and all defects in the pleadings and proceedings which do not affect the substantial rights of the adverse party shall be disregarded in every stage of the action, and no judgment shall be reversed or affected by reason of the same. Clark's Code, section 276, and notes. The plaintiff cannot, of course, sue upon one contract and prove another and essentially different contract. This is more than a mere variance; it is a failure of proof. But if he sues for specific relief, to which he is not entitled, upon facts which show him entitled to other and different relief, he may be adjudged to have that relief to which he is in law entitled. We do not understand it to be seriously questioned that, if there are sufficient allegations, the plaintiff can recover for the loss of the tobacco, although he evidently sued for the loss of the machinery. But it is insisted that he has not made sufficient allegations for that purpose, as the value of the tobacco at the time of the fire is not stated. InJones v. Ins. Co., 55 Mo., 342, where the plaintiff sued on a policy and failed to state the value of the property destroyed, the Court held that averments substantially like those in this case were sufficient as to the value of the property. "These averments of value and loss," says the Court, "would seem to be sufficient after verdict. That the property insured was totally destroyed by fire would seem to be a distinct averment of loss to the value of the property. That an insurance was given on this property to the amount of $1,200 would strongly imply that, in the estimation of the underwriters, it was at least worth (493) as much as that or more." To the same effect is Lane v. ins. Co., 12 Mo., 44, in which the Court also says that the defendant should have taken advantage of the alleged defect by special demurrer, which we know was always directed against the form of the declaration, as framed in violation of some rule of pleading, and not against the substance of the declaration, as disclosing a case insufficient on the merits. Stephen on Pleading (9 Am. Ed.), pp. 44, 140; Ins. Co., v. Seitz, 4 Watts and Serg., 273; Ins. Co., v. Cornick, 24 Ill. 463. Discussing a similar question in Wright v. Williams, 20 Hun., at p. 326, the Court says: "Suffice it at present to say that an actual total loss is averred and that a cause of action for some amount is fairly deducible from the complaint as thus framed." See, also, May on Insurance *Page 355 (4 Ed.), section 590. The rules of pleading may require that an allegation of the value of the property at the time of the fire should have been made, and also that the plaintiff should have inserted two counts or causes of action in his complaint: one for the loss of the tobacco and the other for the machinery; but these are mere defects of form, which should have been pointed out by motion to make the pleading more definite and certain, or by demurrer, as may have been proper. The defendant preferred to answer, and the plaintiff thereupon tendered issues, not only as to the machinery, but as to the tobacco. It was announced by the court that the issues would be settled at the close of the testimony. There certainly was nothing in the evidence adduced by the plaintiff that affected his right to the issue as to the tobacco, but, on the contrary, there was direct proof of the insurance of the tobacco and its loss by fire and of its value, and there was no objection to this evidence by the defendant. His Honor could have ordered the complaint to be made more definite and certain if "the precise nature of the charge was not apparent" (Code, section 261), so that the allegations might in all respects correspond with the proof, but he erred in summarily dismissing the action without submitting issues to the jury and trying the case upon its real (494) merits, especially where there was a sufficient allegation in the complaint of the right to recover for the loss of the tobacco, although imperfectly made. McKinnon v. McIntosh, 98 N.C. 89. The insertion of the claim for the machinery, which proved to be unfounded and which could not be made to answer a useful purpose, will be disregarded and not allowed to vitiate the preceding good averment as to the tobacco, from which the insurance is alleged to have been transferred. Utile per inutilenon vitiatur. If the transfer was invalid, the insurance still rested on the tobacco, and this appears reasonably and by the clearest intendment from the pleadings. The defendant was aware of it, as it admitted the original insurance of the tobacco and denied the validity of the transfer. It followed necessarily that the tobacco was insured. How, then, could the defendant have been surprised or misled? The plaintiff on his present complaint can recover "such damages as by law he may be entitled to, unless he chooses to ask for and is allowed an amendment." Jones v. Mial, supra. The rights of the insured, under a policy of this kind, have not been discussed, as they are fully considered and decided in Lockhart v. Cooper,87 N.C. 149, and as the argument of counsel was mainly addressed to the other question. New trial.