Court Opinion

ID: 8034897
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:19:39.62289+00
Date Added: 2024-06-11T16:37:05.726399
License: Public Domain

Paine, J.,
dissenting.
I am not in accord with the judgment of the majority of the court and feel bound to file a dissent in this case, and respectfully submit that the simple statement of the evidence in the case leaves little foundation in.my opinion upon which to base the allegations of fraud upon which the title is returned to the former owners after a fire occurred and the parties find that a change in the mortgage clause had not accompanied the- change of ownership and that the insurance cannot be collected.
The bill of exceptions shows that Belle Marion owned a hatchery business in Falls City, Nebraska, which she sold to Mayfield and Goldsmith, a copartnership, which thereafter did business in the name of the Richardson County Hatchery. It does not appear that the business had been making money, and she sold the real estate to the new owners for $2,500, and took back a mortgage *223for $2,500, being the entire purchase price.
On February 25, 1929, Belle Marion had purchased a policy of fire insurance upon the. frame building on the real estate in question in the sum of $2,500, and upon the sale of the property she had assigned this policy to the “Richardson County Hatchery Co.,” and a mortgage clause had been given back to her at the time she sold the property on June 20, 1929. On June 22, 1929, the new purchasers had taken out for Belle Marion a second fire policy in her name in the same Dwelling House Mutual Insurance Company of Lincoln for $1,500 on the two-story frame building in which the hatchery was located, and upon the same day Belle Marion assigned this policy to the “Richardson County Hatchery Co.,” and upon the same day Frank S. Lichty, agent of the insurance company, attached a mortgage clause to Mrs. Belle Marion, so two policies of insurance against fire, totaling $4,000, were now upon the property, and each of these policies was left with the agent of the company, who advanced the premium due upon the new policy to the insurance company and was trying to collect the same from the new purchasers. The policies both remained with the agent until after the fire occurred.
Upon October 16, 1929, Mayfield and Goldsmith sold the property to Bennett E. Cook by a written contract of purchase duly acknowledged before a notary public and which was recorded in the office of the register of deeds on November 1, 1929. In accordance with his contract of purchase and upon the same date, October 16, 1929, Bennett E. Cook and Leura Z. Cook, his wife, made, executed and acknowledged to Belle Marion a real estate mortgage upon the property which Cook had just purchased, securing a new note made by them payable to her for $2,200.
Mr. Goldsmith came to Mrs. Marion’s place, according to her testimony, and paid her $300 upon the $2,500 mortgage which had been given her when she sold them the property, and told her that they had sold the property *224to Mr. Cook, and that Cook had made her a new real estate mortgage for the balance of $2,200, and thereupon she gave up the old mortgage papers for $2,500.
She received the Cook mortgage upon November 14 and took it down to record it on the morning of November 15, and found on record a mechanic’s lien of $150 which would be ahead of the new mortgage she had in her hand. She said this made her mad, and Mr. Goldsmith, coming into the office at that moment, promised her if she would give him until noon he would have the $150 mechanic’s lien released. She returned after dinner and it had been released, and she thereupon released of record the mortgage given her by Mayfield and Goldsmith of $2,500, dated June 20, 1929, and recorded the new mortgage which had just been executed in her favor by the Cooks. Mayfield and Goldsmith with their wives executed a warranty deed of the property, which was mailed to Bennett E. Cook at Dawson, Nebraska. Everything was complete with two exceptions. The two insurance policies were still held in the office of Frank S. Lichty, the agent for the insurance company, because of the fact that he had advanced the premium to the company upon the second policy. Upon December 24, 1929, Mr. Lichty went to Goldsmith’s office to collect the premium due upon the second policy. “Q. Tell what you said to him and he said to you as near as you can. A. I said I wanted him to pay me that premium, and he replied that they had no money on hand with which to pay it and that they had sold the property. Q. Is this what Goldsmith said to you? A. Yes, sir. Q. All right, go ahead and tell us all he said about that. A. I told him I must have my money, that I had at their request advanced the premium due the insurance company and that I must insist on collecting the amount due me. He replied that they would pay me $10 on that no'w, that was that date, and that they couldn’t pay me any more at that time but that they had sold the property, and I asked who to. Q. Go ahead, tell us all that was said. A. When *225I was informed that the property had been sold I asked who they had sold it to and Mr. Goldsmith says to Mr. Bennett Cook. I asked him if the transaction had been completed and he replied that it had been and that their mortgage was released and that they had nothing to do with the building any more, was entirely out of the picture. Then I informed Mr. Goldsmith that, that being true, the insurance was of no value to him as insurance and that it should be transferred to Mr. Cook, but he said inasmuch as there was some time for this policy to run before its expiration that they would transfer this policy to Mr. Cook * * * provided he would pay them the unearned premium, and that unless he and Cook could agree on that he asked if he could not turn those policies into the company and have the unearned premium returned to him. I told him not the unearned premium but the short rate unearned premium would be returned to him, and he informed me that he would see Mr. Cook within the next few days and complete the arrangements one way or the other.”
Upon the 4th of January, in a pool hall, Mr. Lichty found Mr. Cook, and testifies as follows: “Q. What did he say in reply to that when you told him Goldsmith had said to you that they had turned this property or sold this property to him? What, if anything, did he say? A. He said when he bought it they told him there was a year’s insurance paid up on it.” Mr. Lichty testified the next time that he talked to Mr. Cook was on the 6th day of January, the day before the fire, in his office, when Mr. Cook asked him to write on a slip of paper the amount of the unearned premium on the policy and he would see Mr. Goldsmith about it. This was the situation at the time the fire occurred, and the morning after the fire Mr. Cook and Mr. Goldsmith were in the office of Mr. Lichty and he was asked what did they say, and his answer to the question by the court was: “We talked the matter over yesterday for three-quarters of an hour and we agreed *226that I was going -to pay the- unearned premium and they was going to transfer the insurance to me.” So that the morning--after'the fire the first statement of the then owner of the property was that the day before he had intended to pay at least the unearned portion of the premium on the second policy, which premium the insurance agent had advanced; and that it would be transferred to him, and if no fire had occurred doubtless that is what would have happened and there would have been no question whatever of any fraud in the case.
The situation at that time was that two policies of insurance were both made out to Mrs. Belle Marion and assigned by her to “Richardson County Hatchery Co.,” the firm name of Mayfield and Goldsmith, who had parted with the title to the property by a warranty deed delivered to the purchaser,- and the mortgage clause upon the two policies was payable to Belle Marion to secure the payment of a $2,500 mortgage made by Mayfield and Goldsmith, which mortgage had been paid, canceled and released of record. A little difference of opinion as to what payments should have been made upon an incubator and upon certain outstanding bills is then magnified into a mountain of fraud, and the decree of the district court orders the release executed by Belle Marion upon November 15, 1929, be canceled and set aside; the new mortgage given to her by Cook, and recorded by her upon the same date, is ordered canceled and released, and it is decreed that the Dwelling House Mutual Insurance Company shall pay a total of $4,097.21 upon the policy of $2,500 taken out by Belle Marion on February 25, 1929, and the policy taken out by Mayfield and Cook upon June 22, 1929, for $1,500, upon which the agent had never been paid but $10 of the premium due thereon of $24.76, and in addition thereto that the insurance company should pay an attorney’s fee of $375.
The writer of this opinion is well aware, as the appellee suggests, that a contract of insurance is construed most *227strongly against the insurer (Haas v. Mutual Life Ins. Co., 84 Neb. 682), yet the surrender by Cook of an unrecorded deed to property upon which he has given a real estate mortgage does not reinvest the title in the grantor. Brown v. Hartman, 57 Neb. 341. The proof in this case lacks much of proving fraud by a preponderance of the evidence. See Stetson v. Riggs, 37 Neb. 797; also Peterson v. Schaberg, 116 Neb. 346, where Goss, C. J., sets out that to maintain an action for false representations the following elements must be proved: “(1) What representation was made; (2) that it was false; (3) that the defendant knew it was false, or else made it without knowledge as a positive statement of known fact; (4) that the plaintiff believed the representation to be true; (5) that the plaintiff relied on and acted upon the representation; (6) that the plaintiff was thereby injured; and (7) the amount of the damages.”
“An actionable representation must relate to past or existing facts and cannot consist of mere broken promises, unfulfilled predictions, or erroneous conjectures as to future events.” 26 C. J. 1087. See Cerny v. Paxton & Gallagher Co., 78 Neb. 134, 10 L. R. A. n. s. 640; Note, 51 A. L. R. 55; Pollard v. McKenney, 69 Neb. 742; Cohn v. Broadhead, 51 Neb. 834.
Appellant insists that, “not only must one seeking to rescind tender back whatever he has received, but, in order to maintain an action in rescission, this must be done before the suit is started, and he must allege in his petition the fact that he has made such a tender.” •
“One who rescinds for fraud must act promptly upon discovery of the facts, announcing his intention to his adversary and returning what he.has received. This should be done before he begins his action, nor should he fail to allege in his petition that he has so rescinded.” Rasmussen v. Hungerford Potato Growers Ass’n, 111 Neb. 58. This decision is cited with approval by Circuit Judge Kenyon in Albert Lea Foundry Co. v. Iowa Savings Bank, 21 Fed. (2d) 515.
*228The writer submits that the evidence falls far short of being sufficient to sustain the charge of fraud, and fails to show rescission as required by the decisions of our court, and that the judgment of the district court should be reversed.