Daily capital journal. (Salem, Oregon) 1903-1919, 1911-07-29
SalOne '. Queen City Fire Ins. Co.,
MnItnOmah County.

Christine SalOne, appellant, v
Queen City Fire Insurance Co., of
Sioux Falls, South Dakota, cOrpor-
alton, respondent. Appeal from the
circuit court for Multnomah county.
Hon. John B. Cleland judge. Ar
gued and submitted July 20, 1911. E.
E. Coovert for appellant. (COovert
& Stapleton on the brieD. W. E.
Farrell for respondent. Gu. S. G.
Cherry, Wilbur & Spencer, A. M. Dib-
BILE and w. E. Farrell on the brief.
Burnett, J. Affirmed
1t was stipulated by the parties
that this cause should be heard upon
appeal on the findings made by the
lower court as upon an agreed state
ment of facts, together With the fire
insurance policy thereto attached as
part of the same.
From these sources we CLEAN that
Frank j. Rowland and his wife. Lou
ise Rowland, at the date Of the policy
were owners Of certain real proper
ty in Columbia county upon which
they were then erecting a dwelling
house. At that time also Rowland
W do dl oGGul vi lllN uIlNIudlll NOlll~
pany at st. Helens in that, county
having authority to act for it in con-
tracting insurance, cOuntersigning
insurance policies and delivering the
same to persons securing fire insur-
ance from that company At the
date of the policy the plaintiff loaned
to Rowland and his wife $1,000 in
cash as evidence of which the Row
lands executed to her a promissory
note of that date due in three years
and secured the same by mortgage
on their real estate mentioned and,
further. as a part of the considera-
ton for the loan and as a part of
the transaction Rowland issued the
fire insurance policy in question,
countersigned the same as such
agent and delivered 1t to the plain
tiff. Attached to the policy and
signed by Rowland as agent for the
defendant company was the STAND
ard Mortgage Clause with Full Con-
tribution," sometimes known as the
"Union Mortgage Clause" 1t pro-
yided: Loss or dInage if any, un-
der this policy shall be payable to
Christine Salene or assigns at st.
Helens, Oregon, mortgage, as inter-
est may appear, and this insurance
as to the interest of the mortgage
only therein shall not be invalidated
| by any act or neglect of the mort
gagor or owner of the within de-
scribed property, nor by any fore
/ closure or other proceeding or notice
of sale relating to the property nor
/ by any change in the title or owner
ship of the property, nor by the oc-
/ cupation of the premises for pur-
poses more hazardous than are per-
mitted by this policy; provided, that
in case the mOrtgagor or owner shall
neglect to pay any premium under
this policy, Ne mortgage shall, on
( demand, pay the same; provided also
that the mortgage shall notify this
company of any change of owner
ship or occupancy or increase of haZ-
ard which shall come to the knowl-
edge Of said mortgagee, and unless
permitted by this policy, it shall be
noted thereon and the mortgagee
shall, on demand, pay the premium
for such increased hazard for the
term Of the use thereof; otherwise
this policy shall be null and void"
The standard mortgage clause in
question further provided for the
right OF the company to cancel the
policy for proportional inability in
case other insurace is effected upon
the property and for subrogation of
the company to rights of the mort
gage in case of payment to the lat
ter under the policy. 1t further ap-
pears from the findings of fact that
the plaintiff before she paid any
money to Rowland knew that he was
the agent of the defendant and was
| also one of the owners of the prom
I erty upon which he was attempting
! to effect insurance by means of the
/ policy in question. The defendant
never received any premium on ac-
/ count OF the policy and did not know
that the same had been issued until
atter the property in question was
destroyed by fire In fact, 1t knew
nothing whatever of the transaction
IN any way until after the fire and
upon the matter being brought to its
notice disattirned the action of Row
land and refused to accept, ratify,
connrm or approve the same.
Inc building was DESTROYED by fire
July is, 1909, at which time the
plaintiffs note and mortgage We're in
tull force and effect and wholly un-
paid. Plaintiff complied with the
terms of the policy in the matter of
giving notice of the loss and demand
ing payment of the amount of insur-
ance, The circuit court gave iudg-
met for the defendant and dismissed
the action from which the plaintiff
appeals.
Burnett, ]. 1t may we'll be con-
ceded that the standard mortgage
clause attached as a slip to the pol
ICY II executed with authority or rat
med afterwards by the company with
iull knowledge of the facts, would
constitute an independent contract
between the insurer and the mortga-
gee upon which the latter may bring
an action directly against the for
mer: Brecht v The Law Union and
crown Insurance Company, Is L. r.
\, (ns) 1877; Bacot V. Phoenix Fire
1926. 'S
In these cases, as well as in all
those cited by the appellant in sup
port OF this proposition. the lnsur-
ance was effected by agents having
authority to bind the insurance COM
pany and acting solely in the inter-
ests OF the company They all Con-
tain the feature that the mortgagee
had no knowledge Of misrepresenta-
ton as to title or condition Of the