Case ID: miss_96/html/0223-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Mayes, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Edward M. Bacot et al. v. Phoenix Insurance Company of Brooklyn.
    [50 South. 729.]
    1. Insueance. IFire. Policy. Sole and unconditional ownership.
    
    Tbe clause iu a fire insurance policy making its validity depend upon tbe sole and unconditional ownership by insured of tbe property insured is reasonable and valid, and a breach of such stipulation, unless waived by tbe company, will generally excuse it from liability.
    2. Same. Nature of provision. Husband's rights to wife’s land,.
    
    An insurance ownership is sole when no one else has any interest in tbe property as owner, and is unconditional when tbe quality of tbe estate is not limited or affected by any condition; tbe clause “sole and unconditional ownership” contemplating beneficial and practical ownership, but not including mere rights that tbe bus-band may have in a homestead, unless tbe policy is so worded as to undertake to insure those rights.
    ■3. Same. Same. Same. Homestead.
    
    A husband cannot insure a bouse on tbe homestead, title to which is in tbe wife, representing that he is the sole and unconditional owner, and, when the property- is destroyed, abandon the insurance contract and its conditions as to sole ownership, and collect the value of the policy, on the theory that he, though not the sole owner as represented, yet has an insurable interest in the property as a homestead.
    4. Same. Same. Mortgage clause. Code 1906, § 2596.
    Code 1906, '§ 2596, providing that there shall be attached to each fire insurance policy taken out by a mortgagor a clause to the' effect that any loss or damage under the policy shall be payable to the mortgagee as his interest may appear, and that the insurance as to his interest shall not be invalidated by any act or neglect of the mortgagor or owner, automatically writes itself into every insurance contract, where the insurance company allows a mortgage clause to be inserted, and makes a new and independent contract between the mortgagee and insurance company in no way dependent upon the original policy between the owner and, Insurer, and the independent contract will not .be invalid even if the original policy was void from its inception, and it will be-unaffected by any conditions which would invalidate the policy as to the mortgagor whether prior or subsequent to the insertion of the mortgage clause, and hence, where an original policy was void because taken by a husband in his own name on a house on the homestead owned by the wife, he representing that he was the-sole and unconditional owner, the validity of a contract between insurer and the subsequent mortgagee -of the premises formed by attaching a mortgage clause to the policy was not affected thereby, and the mortgagee might recover as to his interest irrespective of conditions imposed upon the owner by the policy.
    6. Same. Same. Consideration.
    
    The consideration paid by the insured for a policy of fire insurance is a continuing consideration and will support the insertion of a mortgage clause therein at the time of its issuance, or afterwards while it is in force.
    6. Same. Pleading. Misjoinder of plaintiff. Judgment for defendant. Reversal ftp supreme court.
    
    Where, in an action to recover on a fire insurance policy, containing a mortgage clause, the owner of the premises and her husband were improperly joined as plaintiffs with the mortgagee, but the question whether they had an interest, and how they should assert it, was one litigated in the case, an erroneous judgment for the defendant will not be affirmed by the supreme court because of the misjoinder; but the case will be remanded to the trial court where the improper parties may be eliminated on motion, or that court may control the matter by instruction, and ■ thus dismiss them from the case.
    7. Same. Parties. Mortgagee. Interest less than policy.
    
    Where the interest of a mortgagee is the only valid liability under a fire insurance policy, all that is due thereunder being due to him, “as his interest may appear,” he can sue thereon, though his interest be less than the face of the policy.
    Feom tbe circuit court of Pike county.
    HoN. Moyse H. WilkxNSON, Judge.
    Bacot, Burton Bridges and Emily Bridges, appellants, were plaintiffs in tbe court below; -tbe Phoenix Insurance Company of Brooklyn, appellee, was defendant there1. From a judgment in favor of tbe defendant, the plaintiffs appealed to tbe supreme eo.urt. Tbe -opinion of the court states* tbe facts.
    
      
      Mixon & Oassidy, and Lotterhos & Ilowitt, for appellants.
    On tlie second count of the declaration Burton Bridges and Emily Bridges should recover the amount of the policy less the amount of the mortgage debt, even though the policy is written in the name of Burton Bridges. The declaration alleges that the property insured was a house on a homestead, and even though the title was in the name of Emily Bridges, Burton Bridges, the husband, had a legal right to take out the insurance thereon in his own name for the benefit of himself and his wife. This is apparent under the common law. See also Code 1906, § 2161, preventing the alienation of the wife’s homestead without the husband’s consent; and Code 1906, § 1657, providing that exempt homestead property shall descend, free from the claims of creditors, and belong to the surviving husband and other heirs. Certainly it must follow that the husband Would have the right to insure said property in his own name, notwithstanding the “sole and unconditional ownership” clause of forfeiture in the policy. Merrett v. Insurance Go., 42 Iowa, 11; Continental Ins. Go. v. Wingfield (Tex. 1903), 73 S. W. 847; Warren v. Insurance Go. (Tex.), 35 S. W. 810'; Insurance Go. v.' Wicker (Neb.), 100' N. W. 130; Hanover Ins. Go. v. Bohn, 48 Neb.^743; Insurance Go. v. Barrowclijf, 45 N. J. L. 543; Webster v. Insurance Go., 53 Ohio, 558; Mallery v. Frye, 21 App. D. O. 105; Miothe v. Insurance Go., 113 Mich. 166; 22 Eed. 503; Rockford Ins. Go. v. Nelson, 65 Til. 415; Harris v. Ins. Go., 50 Pa. 341; Kausal v. Ins. Co., 31 Minn. 17; Len-augh v. Commercial Union, 110 N. W. 748.
    It was the evident intent of the parties to insure the house on the homestead to the amount of the policy; and the interest which Burton Bridges had was sufficient to uphold the contract and meet the requirements of the clause as to “sole and unconditional ownership.” Insurance Go. v. Schmidt, 151 Eed. 681; Mass, v. Ins. Go. (Mich.), Ill N. W. 1044; Hough v. Ins. Go., 29 Conn. 10; Insurance Go. v. Pitts (Miss.), 41 South. 5; Insurance Go. v. Holmes, 75 Miss. 390; Home Ins. Go. v. Gibson, 
      17 South. 13; Georgia, Home Ins. Go. v. Jones, 49 Miss. 80; London, etc., Ins. Go. v. McGuire, 52 Miss. 227.
    In the declaration it is alleged that tbe description of ownership was by mistake, without fault on the part of insured, and the case should have gone before the jury with the evidence regarding the mistake.
    There was no effort to reform or make a new contract, but the allegations and consequent offer of proof, was to meet what the appellee claims is a forfeiture of what would otherwise be a valid contract.
    The parol evidence rule is relaxed to show mistake so as to .avoid forfeiture. 16 L. B. A. (N. S.) 1188; Deitz v. Insurance Go., 33 W. Va. 526; Cook v. Insurance Go., 60 Neb. 127.
    Now as to the claim of the mortgagee; if the demurrer to the second count be well taken, this should not affect his demand as set forth in the first count of the- declaration, under the terms ■of his contract with the insurance company as expressed by the standard mortgage clause, attached to the policy, and clause of the policy providing that the only conditions that shall apply to mortgagee are such as shall be written upon, attached, or appended to the policy, the demurrer to this count should have accordingly been overruled.
    In the case of East v. Insurance Go., 76 Miss. 697, the court said: “As the loss payable clause agrees to pay William Thomas - Bast his interest in the insured premises at the time of the loss, and as the mortgage clause stipulates that the only conditions that shall apply to the interest of William Thomas East are those expressed in the loss payable clause, these two clauses constitute a promise to pay William Thomas East whatever sum may be due him by Iames W. East at the time of loss, without regard to any act or default of James W. East.”
    There is no contention made that the mortgagee here forfeited any rights which he may have had, but it is said that he cannot recover because the policy -is of no force as to the mortgagors, under the warranty of title, and that the East case, supra, 
      is plain, unequivocal, and positive in making the contract between the insurance company and the mortgagee independent of any acts or rights of the mortgagor; the opinion is plain and strong to this effect as are the many other authorities, in which by reason of the acts complained of having been before the affixing of the mortgage clause, the courts said that the mortgagee was not affected by acts of the mortgagor before, at the time of, or after. In the Bast case, supra,, no qualification was made, and no distinction drawn between acts precedent :and subsequent.
    By the formerly used, but now obsolete loss-payable clause, a mortgagee had no protection, his rights in the policy being ■subject at any time to forfeiture by acts of the insured, and it was to the end that his rights might be made certain and sub■j-ect to forfeiture for his own acts only, that the “union,”- or '“standard” mortgage clause was devised. Indeed, in this •state, it is by statute, Code 1906, § 2596, read into every policy. 'Oakland Insurance Go. v¿ Bank, 58 Am. St. Bep. 667. ■
    Even before the adoption of the standard form,, the New "York court, in the case of Hastings v. Westchester, etc., Insurance Go., 73 N. Y. 141, decided that a loss payable clause made ■as between the insurer and the mortgagee, an independent contract of insurance giving the same benefit as if taken out in a separate policy, making the mortgagee responsible for his own acts •only, the insurer cannot set up any defense based upon any act •or ■ neglect of the mortgagors, whether committed before- or •after the issuance of the policy, or the making of the agreement between the insurer and the mortgagee, the apparent purpose -of the clause is that no distinction is to be drawn between acts before or after the agreement. This is the leading case in the United States, cited in numerous opinions. After adoption ■of the standard clause, nearly all of the courts adopted the eon-•struction in the Hastings• case, supra, and in all cases- involving, attempted forfeiture for acts of the. mortgagor subsequent to the making of the mortgagee agreement.
    
      On tbe question of immunity of tbe mortgagee from tbe acts of tbe mortgagor at tbe time of, or prior to' tbe affixing of tbe mortgagee clause, tbe courts are divided, and a most bigbly interesting and important question to tbe public is presented to tbis court for decision.
    We contend tbat it1 is settled tbat tbis contract is independent, and tbe mortgagee’s rights are certain and known as tbougb be were insuring in a separate policy; and cite from tbe many authorities on tbis question, Fddy v. London Assurance Corporation, 143 N. Y. 311; Syndicate Insurance Co. v. Bohn, 65 Ned. 165; Smith v. Union Insurance Co., 25 It. I. 260; Ma-gouñ v. Firemen’s Fund Insurance Co., 86 Minn. 486; Phenix Insurance Co. v. Omaha, etc., Co., 41 Neb. 8.34; Westchester, etc., Co. v. Coverdale, 29 Pac. 682; Hanover Insurance Co. v. Bohn, 48 Neb. 743; Hare v. Headley, N. J. Eq. 545; Oakland Insurance Co. v. Banlc, 47 Neb. 717; Phenix Insurance Co. v. Floyd, 19 Hun. 287; Ormsly v. Phenix Insurance Co. (S-. Dale.), 58 N. W. 301; City, etc., Bank v. Insurance Co., 122 Mass. 165; Hartford, etc., Insurance Co. v. Ollcott, 97 Ill. 439; Insurance Co. v. Field, 70 Pac. 149; Phenix Insurance Co. v. Hinds (Kan.), 73 Pac. 893; 13 Am. Eng. Ency. of Law, 205, 206.
    It cannot be contended tbat Baeot was not a mortgagee. Tbe fact tbat tbe mortgage is evidenced by two instruments, the one a conveyance, and tbe other for defeasance, is no concern of tbe appellee’s. Tbis was probably tbe first form of mortgage. This form has never been condemned. Even without the instrument executed by mortgagee, if all parties intended the conveyance as a mortgage, it would so be. Tbe purpose of our statute, Code 1906, § 4783, is to prevent fraud on a vendee, and to tbat end makes a rule of evidence, but in no sense forbids tbe agreement to be a mortgage of tbis kind. These parties say these instruments were intended and recognized as-mortgages; and they were also recognized by the insurance-company as a mortgage when tbe clause was affixed to tbe policy. Tbe insurance company furthermore knew that Bacot was claiming an interest as mortgagee, yet now denies liability on tbe grounds of tbe alleged defective mortgage.
    If Burton and Emily Bridges, bis wife, are entitled to recover, it is proper that tbey join the mortgagee; and whereas, on tbe other band, if tbe insured cannot recover, tbe mortgagee’s claim would equal tbe whole amount which might be recovered under tbe policy, and be could sue alone. Bast v. Insurance Go., supi'a; Lowrey v. Insurance Go., 15 Miss. 43; May on Insurance, § 449 ; Burlington Insurance Go. v. Lowrey, ■61 Ark. 108; Home Insurance Go. v. Gillman> 112 Ind. 7; Lasher v. Insurance Go., 18 Hun, 98; Great Western v. Aetna Insurance Go., 40 Wis. 373; Georgia Home v. Learerton (Tex.), 33 & W. 579.
    If Burton Bridges insured as husband, and, as some of the authorities bold, this was for tbe benefit of himself and wife, and if be insured as her agent, it is proper, in suing to recover, to sue for her use. If tbe court bolds tbe second count bad and tbe first count good, tbe right to recover would be in tbe mortgagee. If both counts are good, then all of' tbe necessary parties are before tbe court.
    
      McLaurin, Armistead & Brien, and Brice & Whitfield, for appellee.
    Emily Bridges, tbe wife, is alleged in tbe declaration to be tbe owner of tbe title to tbe homestead. But she is not tbe assured. Tbe insurance company is under no contractual relationship toward her, and she can therefore have no right of action on tbe policy. A contract of insurance is a personal •contract, and not one running with tbe property. 16 Peters (IT. S.), 496; 1 Cooley’s Briefs on Insurance, 20,3.
    Burton Bridges, the assured, cannot legally sue and recover, because tbe declaration shows the unconditional ownership of tbe property to be in Emily Bridges, tbe wife. The policy, and exhibit to tbe declaration, provides that “if tbe interest of the assured be otter than unconditional and sole ownership; or if the subject of the insurance be a building on ground not owned by the assured in fee simple,” then the policy shall be void. Bosenstoch v. Insurance Go., 82 Miss. 674.
    Bacot, the mortgagee, cannot legally sue and recover, because the policy was void from its inception, having been issued to Burton Bridges, in whom there was no unconditional ownership of the property, therefore the policy never attached, and there was no consideration to support the independent contract with the mortgagee. Baldwin v. German Insurance Go., 75 N. W. 326; Glenn Falls Insurance Go. v. Porter, 33 S. E. 473; Hanover Fire Insurance Go. v. National, etc., Bank, 34 S. W. 333; Genesee, etc., Assn. v. U. S. Fire Insurance Go., 44 N. Y. Sup. 979; American Central Insurance Go. v. Cowan, 34 S. W. 461; Dorris v. Insurance Co., 135 Mass. 251.
    Even if it should be conceded that the policy were valid as to Bacot, as mortgagee, he*could not successfully sue in a court of law. The policy is for $700, while his claim is for $512.91. Tie cannot accordingly maintain a suit originally begun in the circuit court. Lowrey v. Insurance Co., 75 Miss. 43; Fast v. Insurance Go., 76 Miss. 697. In both of these cases cited the right in the mortgagee to sue was put expressly on the basis that such mortgagee’s interest equalled the amount of insurance, which is not true in this case. Bacot’s whole claim as alleged in the declaration, amounts to $512.91 and the policy was for $700. Hartford, etc., Insurance Go. v. Davenport, 37 Mich. 609. The cause of action cannot be split on a single insurance policy. Whoever sues must be able to enforce the whole of the contract.
    This court in Bosenstoch v. Insurance Go., supra, approving the case of Syndicate Insurance Go. v. Bohn, 65 Eed. 165, has practically settled the contention that the contract with the mortgagee is an independent contract by the insurance company, separate from the contract made with insured, but this court has never yet decided that, where the policy is void from its inception, there is any consideration to support .the independent contract with tbe mortgagee; and we insist that tbe authorities cited in support of appellee’s proposition are conclusive.
    If the original contract with the insured is void, how can the contract with the mortgagee be supported ? What consideration is there for such a contract with the mortgagee? We can understand that if the original contract with the assured is a valid contract, then the same consideration would support the subsequent independent contract with the mortgagee, but if there is not a valid contract with the assured, and there is no new consideration given for the independent contract with the mortgagee, then there is nothing to support the contract with the mortgagee, and it necessarily fails. This view seems, in perfect accord with,the authorities cited, which hold that* by reason of the fact that the contract with the mortgagee is an independent contract, no act of the assured after the policy has attached, will vitiate the contract with the mortgagee. This is sound reasoning where the contract was a valid one in its inception, because a contract with the mortgagee is derivative, based on the original contract between the company and the assured and supported for its consideration by the premiums; but when there is no valid contract in law between the assured and the insurance company, how can it be said that an independent, valid contract can arise from a void contract? The cases cited, supra,, in support of this contention, show clearly that no valid contract can arise out of, and be bottomed on, a void contract, as, where the original contract between the assured and the company is void, no independent valid contract can exist with the mortgagee, there being no new consideration to support it.
    Therefore the demurrer to the first count of the declaration was properly sustained wherein the court held that Bacot, the mortgagee, had no right of action on the policy in a court of law, because his claim, even if a valid and independent contract, did not equal tbe amount of insurance, and under tbe Bast case and tbe Lotvrey case, supra, be bad no- standing in a court of law to maintain bis action.
    In tbe second- count of tbe declaration, it is set forth that tbe title to tbe bouse and lot covered by tbe insurance was in tbe name of Emily Bridges- and by accident and mistake, tbe policy was written in tbe name of Burton Bridges, tbe bus-band, and that tbe said contract of insurance yet remained in force, unchanged. Tbe appellee demurred to- this second count of tbe declaration for tbe reason tbat tbe policy required that tire assured should be tbe sole and unconditional owner, and tbat be should own in fee simple the lot upon which any building stood; and it was- set forth in tbe declaration tbat tbe assured, Burton Bridges, tbe husband, bad no interest in tbe property, but tbat tbe title to the same, was in tbe name of tbe wife, and as tbe insurance company bad no contract with tbe wife, tbe wife could not sue because of tbe want of any contract with tbe insurance company; and tbe husband could not sue because of tbe want of title to the property. There is no allegation in tbe declaration tbat tbe insurance company was ever made aware at the time of tbe issuance of the policy, tbat Burton Bridges bad no title or ownership on tbe property insured. There is no averment in tbe declaration of any knowledge whatever on tbe part of tbe insurance company tbat tbe husband’s title to tbe property was otherwise than sole and unconditional and in fee simple; no facts are set forth in tbe declaration on which there is any waiver claimed in these provisions of tbe policy; and tbe acceptance of tbe policy containing these requirements is an affirmative assent and answer tbat they do so exist, on which tbe insurance company has a right to rely and act. Tbe policy was- notice to- Burton Bridges tbat tbe company deemed bis interest tbat of unconditional ownership; tbat it insured him against loss- to- tbat extent only, and tbat it expressly excluded every other intei’est from tbe insurance unless Burton Bridges might notify it tbat be held a different interest, and cause a true description of it to- be written into or endorsed upon tbe policy. Tbe silent acceptance' ■of tbe policy by Burton Bridges closed tbe contract, and bound bim to tbe agreement, evidenced by tbe policy, that every interest of bis but that of unconditional ownership was excluded from tbe promised indemnity. Syndicate Insurance Go. v. Bohn, 65 Bed. 171; Rosenstoclcv. Insurance Go., 82 Miss. 687.
    Therefore, the court below was right in sustaining tbe demurrer as to tbe right of Burton Bridges to maintain the action, •as tbe declaration set forth on its face that Btaton Bridges had no title or ownership in tbe property insured.
    The court below was likewise correct in sustaining tbe'de-murrer as to Emily Bridges, tbe wife, because she bad no contract whatever with tbe insurance company. The sustaining •of the demurrer to both counts of tbe declaration was correct, and within the line of authority laid down by the supreme court of Mississippi, as well as by a vast majority of tbe tribunals of other states. But it is contended by tbe counsel for appellants that tbe property insured was a homestead, as set forth ini tbe declaration, and that notwithstanding Burton Bridges, the husband, had no right, title, or ownership in tbe homestead, no fee simple interest, as provided by the policy, be still has a right to maintain tbe suit on the ground that he has an insurable interest in the homestead as the husband; and that this insurable interest was sufficient to support the contract. Opposing counsel cite a great number of authorities, which the ■court, upon examination, will see are applicable to those states where tbe marital rights under tbe common law exist, but in all tbe cases we have examined where tbe marital rights at •common law have been changed by statute and the disabilities ■of a wife, in reference to tbe control, management, sale, and ■disposition of her property been removed, as is the law in this ■state, tbe authorities cited by counsel have no application. ■Code 1906, § 2517.
    Argued orally by F. H. Loiterhos, for appellant, and by A. A. Armislead, for appellee.
   Mayes, J.,

delivered the opinion of tbe court.

On tbe 4tb day of August, 1908, a suit was commenced in. the circuit court of Pike county against tbe Phoenix Insurance-Company to recover tbe sum of $100; that being tbe face value-of a certain insurance policy issued by tbe company in favor of Burton Bridges on a certain dwelling located in tbe town of' Summit, insuring same against loss by fire. Tbe suit was begun in tbe name of E. M. Baco-t, Emily Bridges, and Burton Bridges, for tbe use of E. M. Bacot and Emily Bridges, and contains two counts. Tbe substantial allegations of tbe first count are as follows, viz.: Tbat Burton Bridges is tbe bus-band of Emily Bridges, and on tbe 17th day of January, 1907,. they were tbe owners of a homestead in tbe town of Summit, wbereon was located a frame building used and occupied by them as their borne and valued at more tban $700. On tbat date an insurance was effectuated with tbe insurance company-covering this property and indemnifying against loss by fire,, tbe policy being for tbe sum of $700 and being less tban tbe value of tbe bouse. We shall allude to tbe specific terms of' this policy later on. On tbe date tbat this insurance was effectuated, a mortgage existed on tbe property in favor of E. M. Bacot for tbe sum of $433, with interest at tbe rate of 6" per centum from December 1, 1906. Tbe so-called mortgage-was in reality a deed signed by Emily Bridges and Burton Bridges to E. M. Bacot, reciting as tbe consideration tbe sum of $433; but there was a written agreement between tbe parties tbat upon tbe repayment to Bacot of tbe sum.of $433 on or before tbe 1st day of December, 1906, tbe property should' be reconveyed by Bacot to them, and, since this caste is here on demurrer, we deal with it as though there was a formal mortgage. Other indebtedness-due by tbe Bridges to E. M. Bacot, which it is claimed was covered by this agreement, ran the-total indebtedness up to the sum of $512.91. It is shown in tbe declaration tbat tbe title to this property was in Emily Bridges, tbe wife of Burton Bridges, and it does not appear that Burton Bridges had any title, unless it can be said that because the property was a homestead and used and occupied by both as such constitutes title within the meaning of unconditional and sole ownership clause of the policy. The insurance policy contains, among many others, the following, clauses, viz.: “The entire policy shall be void if the insured has. concealed or misrepresented, in writing or otherwise, any material fact or circumstance concerning this insurance or the subject thereof; or if the interest of the insured in the property be not truly stated,” etc., etc. It further provides that: “This-entire policy, unless otherwise provided by agreement indorsed hereon and added hereto, shall be void, etc., if the interest of the insured be other than unconditional and sole ownership, or if the subject of the insurance be a building on ground not owned by the insured in fee simple.” The policy further provides that: “This policy shall be canceled at any time at tho request of the insured; or by this company giving five' days’ notice of such cancellation. If this policy shall be canceled as hereinbefore provided, or become void or cease, the premium having been actually paid, the unearned portion shall be returned on surrender of this policy or last renewal, this company retaining the customary short rate; except that when this policy is canceled by this company by giving notice it shall retain only the pro rata premium.”

On the day that this policy was issued to Burton Bridges, a mortgage clause was inserted in the face of the policy in writing, substantially, if not literally, in the language of section 2596 of the Code of 1906, which requires that such clause shall be attached to each fire insurance policy taken out by a mortgagor or grantor in a deed in trust, and providing what shall be contained in such clause. That part of the mortgage clause which it is material for us to notice is as follows, viz.: “Loss or damage, if any, under this policy, shall be payable to E. M. Bacot, McOomb City, Miss., as mortgagees, or to their trustee, as interest may appear, and this insurance, as to the interest of the mortgagee (or trustee) only therein, shall not be invalidated by any act or neglect of the mortgagor or owner of the within described property,” etc., etc. The mortgage clause also provides for the cancellation of the policy on the terms indicated by the policy; that is to say, it may be canceled by either party on compliance with certain conditions as to notice, specified in the policy and mortgage clause, and applying to. all the parties to the policy in the manner therein indicated. The mortgage clause also' provides, in keeping with the requirement of ■section 2596 of the Code of 1906, which was operative at the time the insurance contract was made, that: “Whenever this •company shall pay mortgagee, or trustee, any sum for loss or •damage under this policy and shall claim that, as to the mortgagor or owner, no liability therefor existed, this company shall, to the extent of such payment, be thoroughly subrogated to all the rights of the party to whom such payment shall be made, under all securities held as collateral to the mortgage ■debt, or may at its option, pay the mortgagee or trustee the whole principal due or to grow due on the mortgage, with interest, and shall thereupon receive a full assignment and transfer of the mortgage, and of all such other securities; but no ■subrogation shall impair the right of the mortgagee or trustee to recover the face amount of his claim.”

We do not set out [n full the other provisions of the mortgage clause, for the reason that the other provisions are not in any way involved in the decision of this case. Although Burton Bridges had no title to the property in question, it affirmatively appears that the interest acquired by Bacot in the property was under a valid deed signed by both Burton Bridges and his wife, Emily Bridges, containing, in a separate agreement, a defeasible clause; in other words, the interest of Bacot in the property at the date of the insertion of the mortgage clause is placed beyond question, and the mortgage clause, coupled with the written agreement to reconvey, all show conclusively that as between the parties the transaction was treated as a mortgage.

Tbe policy of insurance covered a period of time beginning, on January 17, 1907, and ending on January 17, 1908, and tbe mortgage clause was coextensive in point of time with the-original insurance policy. Some time in December, 1907, while tbe policy was in full force, the building covered by the-policy was totally destroyed by fire. All the requirements of tbe policy as to notice of loss, proofs, etc., were duly made, and demand made on the insurance company by both parties for such proportionate part of the value of the insurance as each claimed they were entitled to. The insurance company denied any liability under' tbe policy. Hence tbe suit uniting all parties as plaintiffs. Tbe second count is much tbe same as the first. It alleges tbat the title to the property is in Emily Bridges, tbe wife of Burton Bridges, and that the building insured was occupied by them as a homestead. It further alleges-that it was the intention of Burton Bridges to take out the insurance in the name of Emily Bridges, but that without his-fault and by accident and mistake tbe policy was written in the name of Burton Bridges, instead of his wife. Thereis- no allegation that tbe insurance company knew of the condition of tbe title and waived it in any way. Tbe second count demands-tbe balance of the insurance, being $187 after allowing the sum of $512.91 to be paid to Bacot; tbat being the conceded amount of his interest. The declaration was demurred to and many grounds assigned. We simply state those we deem material. The demurrer assigns for causes: (1) That the declaration shows that the policy of insurance was issued to Burton Bridges, and not Emily Bridges, and therefore Emily Bridges is improperly made a party plaintiff; (2) tbat tbe declaration shows tbat the title to tbe property is in Emily Bridges,- and not Burton Bridges, tbe insured, and because of this tbe policy is void, as Burton Bridges was not the “sole' and unconditional owner” of the property, as it was provided in the policy that he should be in order to claim the benefit of the insurance; (3) because tbe policy was issued on the 17th day of January, 1907, and the property covered by tbe policy bad been conveyed to E. M. Bacot by Burton and Emily Bridges long prior to tbat time, to wit, on tbe 17th day of December, 1905, and therefore there was no title in either of them at tbe date of tbe insurance; (4) because tbe declaration and policy show tbat tbe policy was void at tbe time of its issuance by reason of tbe failure of Burton Bridges to be tbe sole and unconditional owner of tbe property, and therefore there could be no right accruing to Bacot as mortgagee under tbe mortgage clause of this void policy; (5) because it is not shown tbat E. hi. Bacot is a mort.gagee or grantee, nor tbat Burton and Emily Bridges are mort.gagors or grantors in any mortgage or deed in trust, but tbat Bacot was tbe owner of the property intended to be covered by tbe policy, and, not being tire insured, bad no right of action. These issues thus raised by demurrer sufficiently present all •questions in tbe case. Tbe trial court sustained tbe demurrer and dismissed tbe suit from which judgment an appeal is prose■cuted.

Tbe first question which we shall consider is whether tbe policy in favor of Burton Bridges ever attached by reason of tbe clause making tbe policy void “if tbe interest of tbe insured in tbe property be not truly stated,” or “if tbe interest of the insured be other than unconditional and sole ownership.” We do not conceive tbe question in this case to depend at all on whether or not tbe husband bad an insurable interest in tbe property on account of bis homestead rights; but tbé'question is whether tbe terms of tbe policy covered any such interest. Tbe condition on which tbe policy is given any validity by tire ■contract of insurance is tbat tbe insured is tbe unconditional and sole owner, and yet tbe declaration itself shows that be never was tbe owner. In tbe case of Groce v. Phœnix Ins. Co., 94 Miss. 201, 48 South. 298, this court said in regard to'this clause tbat “it is very generally agreed, .and, indeed, repeatedly decided in this state, tbat tbe clause in an insurance policy as to sole and unconditional ownership is reasonable and valid, and that a breach of such stipulation, unless waived by the company, will excuse the company of liability. In the case of Rosenstock v. Insurance Co., 82 Miss. 674, 35 South. 309, the court also upheld this clause. In fact, it may be said that the unconditional and sole ownership clause of insurance policies has been .sustained in all courts. What is unconditional and sole ownership is not a question of'legal difficulty. In the case of Rochester German Ins. Co. v. Schmidt, 162 Fed. 447, 89 C. C. A. 333, quoting from 2 Clement on Insurance, it is said: “An insurance ownership is sole when no one else has any interest in the property as owner, and is unconditional when the quality ■of the estate is not limited or affected by any condition.” The husband or wife, as the case may be, has certain rights given by statute in the homestead; but it is in no sense of the word any kind of ownership, that is to say, where the title is absolute in the one or the other, the right which that other has in the homestead is not ownership' in any sense of the word, and it can make no difference under the terms of the policy, so far •as avoiding it is concerned, that the insured was the husband ■of the owner, or that the property was used by them as a homestead at the date the insurance was procured. Burton Bridges represented that he was the unconditional and sole owner of the property, and his title ought to be at least substantially as represented. The contract of insurance was with him alone,' and he alone can recover on the contract if it. is a valid insurance ■contract, and its validity must be determined by the conditions in the contract made with him. It is not shown that he was •acting as the agent of his wife, nor is it shown that the insurance company had any knowledge of the true status of the title. While it has been held in the case of Liverpool Ins. Co. v. McGuire, 52 Miss. 227, and in the case of Groce v. Phœnix Ins. Co., 94 Miss. 201, 48 South. 298, that this clause had to do not with nice questions-of title to be precisely determined, but with beneficial, practical, and equitable ownership, yet this clause deals with owmership of the kind just named, and we have not found any case that so extends the construction of this clause as to make it comprehend mere rights which a husband or wife-may have in a homestead, unless the policy is so worded as to-undertake to insure those rights.

Many of the authorities cited by counsel for appellants, in fact most all of them, are merely discussions of the question of whether or not a husband or wife has an insurable interest in the homestead when the title is in the other. This interest is doubtless an insurable interest; but the question in this case is-not that. The question here- is: Is it permissible for a husband or wife to insure a homestead the title to which is in the-other, and represent that the one procuring the insurance is the sole and unconditional owner, and when the risk is destroyed abandon the insurance contract and its conditions as te-sóle ownership and collect the value of the policy on the idea that he or she, though not the sole'owner as represented, yet has-an insurable interest in the property because it is his or her homestead? We say not. That was not the contract, nor was-it the interest insured. This company might be willing" to insure the sole owner of the property, but unwilling to issue a-policy on any -limited interest which he might have in the property. To so hold would be to substitute a different contract from that which the parties made.

The next question is: If the original policy is void because of a violation of the sole and unconditional ownership clause, thereby making the policy as to the original owner void from its inception, can it be valid as to a mortgage? Let it be remembered that Bacot held a valid and enforceable mortgage-on the property at the time the mortgage clause was inserted and on the date it was destroyed; his interest being, as now shown by the pleadings, $512.91. Before discussing this question in its legal aspect, it will be well to consider the terms of the policy in relation to the mortgagee. The policy of insurance was a part of the security which Bacot held on his interest in the property, and it was- obtained for that purpose-Under the mortgage clause of this policy, it was only such interest that Bacot had in the property “as it might appear” that he undertook to insure, and it was only this interest which the contract of insurance undertook to protect. The consideration paid for the policy by the owner is a continuing consideration, day by day, and is not fully earned until the expiration of the full life of the insurance policy. That this is the case and is so understood by the insurance company is evidenced by the clause in the policy which permits either party to cancel the policy on certain conditions therein named, whereupon it becomes the duty of the company to refund a certain proportion of the unearned premium. No additional consideration is required to be paid as a condition for the insertion of the mortgage clause in the insurance policy, nor is any additional risk incurred by the insurance company. The consideration paid by -the original insurer constitutes a sufficient and valuable consideration for the contract between the insurance company and the mortgagee, since it imposes no increased hazard; nor does it increase the amount of the insurance contract, but merely imposes upon the insurance company the obligation of paying to the mortgagee, in the place of the insured and out of the proceeds of the policy, such sum, not in excess of the face value of the policy, as the interest of the mortgagee, in the identical thing insured, shall amount to.

When a mortgage clause is inserted in an insurance policy, its effect is limited and controlled by section 2596 of the Code of 1906, and the rights of the parties are determined by the provisions of the above statute, which automatically writes itself into every insurance contract where the insurance company allows a mortgage clause to be inserted. In other words, where an insurance contract is made with the owner of property on which there is a mortgage, and the mortgagor, with the consent of the insurance company, undertakes to have a mortgage clause inserted in favor of the mortgagee, the statute says that such contract “shall have attached, or shall contain the following mortgage clause,” etc., and proceeds to give in detail what this clause shall contain. This, then, irrespective of any mortgage clause inserted by the insurance company to the contrary, constitutes the only mortgage clause that can be placed in the policy. Since the mortgage clause in the policy is in the language of section 2596 of the Code of 1906, we will not incumber this opinion by a reproduction of the statute, as we have already set out the principal parts of the statute as contained in the clause referred to. The rights of the mortgagee under this- policy turn upon a construction of this statute, and, if the mortgagee is entitled to recover, it is by virtue of this statute and independent of the provisions contained either in the original policy or the mortgage clause, in so far as same may conflict- with the statute.

The effect of this statute is to mate the contract between the insurance company and the mortgagee a new and independent contract, which is not in any way dependent upon or subservient to the conditions of the original policy between the owner and the insurance company. It may be that the original policy was void from its inception; but this fact cannot in any way invalidate the independent contract of insurance between the mortgagee and the insurance company, if the mortgagee have really a valid and insurable interest in the subject of the insurance. Under section 2596 the mortgagee does not take by assignment from the original owner of the policy, taking only the rights which the original owner has and subject to' all the conditions imposed upon the owner; but the very design and purpose of the statute is to place the insurable interest of the mortgagee on a safer basis than it would be if it were subject to be defeated by all the uncertainties accompanying the taking out of insurance by the owner in stating correctly hisi title, etc., and the many other conditions imposed by the insurance company, the nonobservance of which work a forfeiture- of the policy in so far as the owner is concerned. It is not because the law looks with any special favor on the mortgagee that this statute was passed securing Mm from forfeiture of Ms rights because of a breach of the conditions of the policy on the part ■of the original insurer. The business of insurance has reached that stage in commercial affairs that it is relied on as a kind of security in multiplied transactions. Men part with valuable property in part reliance on an insurance policy as indemnity against loss. The mortgagee does not live in the property. He knows nothing of the representations made by the insured when obtaining the policy of insurance that would render the policy void because of a breach of its conditions. He knows nothing of any fraud or false swearing which may have been done by the owner. He knows nothing of the hazards incurred by the insured in the use of the property which invalidates same under its terms. In short, he cannot know of the possible violation by the mortgagor of the many conditions imposed on the owner by the insurance company that would ■defeat a recovery under the policy, and the object of the statute was to relieve this indemnity taken by the mortgagee from its precarious attitude as a security, so liable to be defeated by the fraud, the ignorance, and the carelessness of the mortgagor,- •and, while leaving it optional with the insurance" company whether or not they will insert the mortgage clause, yet, if they do, there can be inserted in it only such conditions of invalidation, as regards- the mortgagee, as the statute provides.

In so construing this statute, we are fully aware of the fact that there are cases which construe this clause differently, and hold that if the original policy never attached to the risk, and the policy was therefore void from the beginning, the mortgage must fail; but we do not think the reasoning of those ■cases is sound, and, while resting on almost the identical clause that is required by our statute to be inserted, yet no statute had required that these clauses be inserted in the policy, as is the case here ; but, if this be incorrect^ still we cannot agree with those decisions. It seems to us that those decisions wholly misconceive the true principle which should control, and overlook the fact that the contract of insurance made with the mortgagee is independent; that is, free from the provisions and purposes of the contract with the owner, and made for the purpose of securing the interest of the mortgagee. It is merely a more convenient method, adopted by the company and mortgagee, of effecting an, independent insurance through the premiums paid by the original insurer on his contract, without requiring the multiplicity of transactions which would be required by, each party, mortgagor and mortgagee,, taking out separate policies. To illustrate: A. owns property worth $5,-000 and insures same for $4,000. A. borrows from Bl $3,000, and B. requires1 of A., in addition to a mortgage, that A. keep up an insurance in favor of B>. for the sum of $3,000'. Were it not for the present method of conducting this business under the mortgage clause provided by the statute, it would be necessary for B. to insure his interest in a separate policy for $3,000, and -in order that the insurance might be kept up to the original amount of $4,000 a separate policy would have to be issued in favor of A. for $1,000. Again, at the end of six months, A. pays B>. $1,500 of the’debt. New policies would have to be issued in order to cover the value of the property, and the amount of A.’s policy increased to $2,500, and B.’s policy reduced to the value of his then interest, to wit, $1,500. It was in order to avoid all these complications that the statute was enacted, making separate and independent contracts of the transactions, yet so arranging it as that both mortgagor and mortgagee, automatically, under one policy, keep' insured whatever interest they may have in the subject of the insurance. If the mortgagor have no interest in the property, or if he has so stated his interest as that he forfeits his rights under the policy, but the insurance company is forced, under the policy, to pay the valid interest of the mortgagee, the insurance company is protected under the statute, by being legally subrogated to all the rights of the mortgagee as against the mortgagor. By the terms of the statute, so construed, complications are eliminated, and justice worked out to 'all parties. The following eases are in conflict with tbis view: Hanover Fire Ins. Co. v. Nat. Exchange Bank (Tex. Civ. App.), 34 S. W. 333; Gennessee Falls Sav. Bank v. U. S. Fire Ins. Co., 16 App. Div. 581, 44 N. Y. Supp. 979; Baldwin v. Insurance Co., 105 Iowa, 379, 75 N. W. 326. Before we bad any statute on tbis subject, tbis court beld in tbe case of East v. Insurance Association, 76 Miss. 697, 26 South. 691, that tbis mortgage clause constituted a new and independent contract, and tbe mortgagee might recover as to bis interest without reference to any condition imposed upon the owner by tbe policy. See, also, the cases of: Phœnix Ins. Co. v. Omaha Loan & Trust Co., 41 Neb. 834, 60 N. W. 133, 25 L. R. A. 679; Magoun v. Firemen’s Fund Ins. Co., 86 Minn. 486, 91 N. W. 5, 91 Am. St. Rep. 370; Oakland Home Ins. Co. v. Bank of Commerce, 41 Neb. 717, 66 N. W. 646, 36 L. R. A. 673, 58 Am. St. Rep. 663.

If, then, tbe contract between tbe mortgagee and tbe insurance company is a wholly independent contract from that of tbe original owner or mortgagor, bow can it be that any but tbe conditions contained in tbe mortgagee’s contract affect bis rights? His rights are independent, not derivative from tbe mortgagor’s contract. Under tbis independent contract, be is not a mere appointee of tbe mortgagor to receive tbe proceeds of tbe policy, in case of loss, by virtue of and under tbe contract of tbe mortgagor, but tbe mortgagee gets an independent right, an independent contract with tbe insurance company, whereby tbe insurance company insure bis individual interest in tbe property. In tbe case of Insurance Company v. Bohn, 65 Fed. 165, 12 C. C. A. 531, 27 L. R. A. 614, a case expressly approved by tbis court in tbe case of Bosenstock v. Insurance Co., 82 Miss. 674, 35 South. 309, it is expressly beld, in construing a mortgage clause almost identical with tbe one attached to tbis policy, that, even if tbe original policy issued to the owner was void from its inception, that in no way affected tbe right of tbe mortgagee in a valid mortgage to collect tbe value of bis interest in tbe property under tbis independent contract as mortgagee with tbe insurance company. Tbe question in tbe Bohn case, supra, was tbis :■ Certain persons, being tbe sole owners of tbe capital stock of a corporation, procured a policy of insurance on its property in tbeir individual names. Tbe policy contained tbe usual unconditional and sole ownership clause. Tbe property was under mortgage, and tbe policy of insurance bad inserted in it tbe union mortgage clause, required to be inserted in tbis policy by tbe statute. Subsequently tbe property was destroyed by fire,- and tbe questions of tbis case were: First,, was there a violation of tbe sole and unconditional ownership clause so as to prevent tbe original policy from ever attaching ? And, second, if tbe original policy never attached because of a breach of tbis condition, can tbe mortgagee recover on bis contract ? Tbe court held that tbe sole owners of tbe capital stock of a corporation have not tbe sole and unconditional ownership of tbe corporate property within tbe meaning of an insurance policy, which is void unless they have such ownership; but tbe court further held, in regard to tbe mortgagee, as follows, viz.: “But tbe plaintiffs in error say that, although tbe indemnity of tbe blameless mortgagee is protected by this contract against any act or neglect of the mortgagors subsequent to tbe issue of tbe mortgage clause, yet any prior act or neglect of theirs, which excludes tbeir interest from insurance under tbe policies, precludes tbe mortgagee from obtaining any indemnity under tbis mortgage clause. Before we assent to a construction of tbis contract so narrow and subtle, it will not be uninstructive to notice tbe history and purpose of tbis clause, and tbe situation of these parties when they made it tbeir contract. We all know that twenty years ago a contract between a mortgagee and an insurance company, like that before us, was novel and rare. At that time tbe customary method of indemnifying against loss by fire was to indorse upon tbe policy tbe words, 'Loss, if any, payable to ■ — ■—•, mortgagee, as bis interest may appear,’ or words of similar import. Today such an indorsement is rare, and. a contract similar to tbe mortgage clause before us is in general use. Why tbis change ? Tbe reason is not far to seek. Tbe old indorsement made tbe mortgagee a simple appointee- of tbe mortgagor, and put bis indemnity at tbe risk of every act or neglect of tbe mortgagor tbat would avoid tbe original policy in bis bands. Indemnity so precarious, so liable to be destroyed by tbe ignorance, carelessness, or fraud of tbe mortgagors, was not satisfactory to tbe mortgagees; and they proceeded to make contracts with tbe insurance companies similar to tbat before us, for tbe purpose of securing indemnity to tbeir interests tbat should not be affected.by any act or negligence of the mortgagors. * * * Our conclusion is tbat tbe effect of tbe union mortgage clause, when attached to a policy of insurance running to tbe mortgagor, is to make a new and separate contract between tbe mortgagee and tbe insurance company, and to effect a separate insurance of tbe interest of tbe mortgagee, dependent for its validity solely upon tbe course of action of tbe insurance company and tbe mortgagee, and unaffected by any act or neglect of tbe mortgagor, of which tbe mortgagee is ignorant, whether such act or neglect was done or permitted prior or subsequent to tbe issue of tbe mortgage clause.” '

In line with the case above quoted from are tbe cases of Insurance Co. v. International Trust Co., 71 Fed. 88, 17 C. C. A. 616, and Hartford Ins. Co. v. Olcoit, 97 Ill. 439, and the case of Westchester Fire Ins. Co. v. Coverdale, 48 Kan. 446, 29 Pac. 682; 2 Cooley’s Briefs, 1520. In tbe last case cited above, tbe court says, in construing tbe mortgage clause: “The rules laid down in tbe authorities cited have no application, however, to a case where a provision has been inserted in tbe policy which places tbe mortgagee upon another and a different footing from tbat of a mere assignee or appointee to receive the loss. Tbe mortgage clause was agreed upon for tbis very purpose, and created an independent and a new contract, which removes tbe mortgagees beyond the control or tbe effect of any act or neglect of tbe owner of tbe property, and renders sncb mortgagees parties wbo have a distinct interest separate from tbe owner, embraced in another and a different contract. Tbe tendency of the recent cases is to recognize these distinctions, and thus protect tbe rights of tbe mortgagee, when named in tbe policy, and tbe interest of tbe owner and of tbe mortgagee are regarded as distinct subjects of insurance. Excelsior Fire Ins. Co. v. Royal Ins. Co., 55 N. Y. 343, 14 Am. Rep. 271; Insurance Company v. Allen, 43 N. Y. 892, 3 Am. Rep. 711.” This same rule is re-announced in tbe case of Insurance Co. v. International Trust Co., 71 Fed. 88, 17 C. C. A. 616.

We unhesitatingly hold that the contract of Blaco-t with tbe insurance company as mortgagee was an independent contract, dependent for its validity alone upon the conditions placed by the statute in the mortgage clause, and unaffected by any conditions which invalidated the policy as to the mortgagor, whether prior or subsequent to the insertion of the mortgage clause. Our views of the mortgage clause can be stated in no better language than it is put in the case of Hastings v. Westchester Fire Ins. Co., 73 N. Y. 141: “The intent of this clause was that in case, by reason of any- act of the mortgagors, or owners, the company should have a defense against any claim on their part for a loss, the policy should nevertheless protect the interest of the mortgagees, and operate- as an independent insurance of that interest, and indemnify them against loss resulting from fire, without regard to the rights of the mortgagors under the policy; and, to effectuate that intention, we should hold that, as against the mortgagees, the defendant cannot set up any defense based upon any act or neglect of tbe mortgagors, whether committed before or after tbe issuing of the policy, or the making of the agreement between the company and the mortgagees. * * * The intent of the clause was to- malee the policy operate as an insurance of the mortgagors and the mortgagees separately, and to give the mortgagees the same benefit as if they had taken out a separate policy, free from tbe conditions imposed upon tbe owners, making tbe mortgagees responsible only for tbeir own acts. * * * Tbis provision, in case tbe policy were invalidated as to tbe mortgagors, made it, in substance, an insurance solely of tbe inter•est of tbe mortgagees by direct contract with them, unaffected by any questions which might exist between the company and the mortgagors.”

It is next argued that this case should be affirmed, if for no •other reason than because there is a misjoinder of parties, and the cases of Lowry v. Insurance Co., 75 Miss. 43, 21 South. 664, 37 L. R. A. 779, 65 Am. St. Rep. 587, and East v. Insurance Co., 76 Miss. 697, 26 South. 691, are cited as authority for this position. It is undoubtedly true that neither Emily Bridges nor Burton Bridges have any interest in this suit, and ■are therefore improperly joined; but it is also true that the ■question of whether or not they did have an interest, and the manner in which they should assert that interest, was one of the questions to be litigated in the case, and the court can now eliminate them on motion, or control the matter by instructions, and thus dismiss them from tbe case.

It is further argued that Bacot, the mortgagee, cannot maintain. this suit because the amount of his interest is less than the policy, and the Bast case and Lowry case, cited above, are relied on as authority for this proposition. We do not think those cases are in point at all. In tbe present case, though Bacot’s interest is less than tbe face of tbe policy, yet, as mortgagee, bis is the only valid liability under the policy. This being the case, all that is due under the policy is due to him “as his interest may appear,” and, being the only interested party, of course, he is the only one who can sue. This was not the case in either of the two cases cited above.

Reversed and remanded.