Case Name: Insurance Co. v. Sampson
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1883-01
Citations: 38 Ohio St. 672
Docket Number: 
Parties: Insurance Co. v. Sampson.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 38
Pages: 672–677

Head Matter:
Insurance Co. v. Sampson.
1. Wliere an order confirming a sale, made under a decree of foreclosure, to a mortgagee wlio is a party, is at the same term vacated and the sale set aside for want of notice as required by statute, the insurable interest of the mortgagor in possession is the same in the property as if such sale and confirmation had not been made.
2. Where a loss of property covered by insurance in favor of the mortgagor, occurs after such confirmation and before the order was vacated and the sale was set aside, the insurable interest, which the mortgagor in possession had, was not divested by such unauthorized sale and confirmation.
Error to the District Court of Champaign county.
William Sampson brought an action against The Richland County Mutual Insurance Company, the plaintiff in error, on a policy of fire insurance, on his dwelling-house and shop situate on a certain lot of land.
The policy was issued March 28, 1872, and by its terms expired March 28, 1877. The premium was paid in advance for the entire term of five years. A total loss of the buildings insured occurred February 14, 1877. This loss exceeded the amount of insurance. The policy contained no provisions against alienation. The right of the assured, to recover depends on the question, had he an insurable interest in the property at the time of the loss ? Thé defendant claimed that he had not, and that such interest was divested by the judicial sale, made January 27, 1877, and a confirmation of that sale, February 13, 1877, the day before the loss. The plaintiff claims that he had, for the reason, that though such a sale was made and confirmed, yet, afterwards and at the same term of court, the sale and confirmation were set aside, and a resale made and confirmed.
During the trial, the defendant offered in evidence the record and proceedings of the court, showing that one Frank Houston, a mortgagee of the property insured, had commenced an action against Sampson and wife, to foreclose his mortgage, making one Lemuel Weaver, the owner of a second mortgage, a defendant.
Weaver answered setting up his mortgage, and such proceedings were had, that at the November term of the court, a. d. 1876, there was a finding of the amount due on each mortgage, and an order of sale to pay the same, on default of plaintiff for five days to pay the same, and in case of sale the sheriff was ordered to bring the proceeds into court to abide its order.
At the February term, 1877, to wit, February 13, 1877, the sheriff reported a sale made January 27, 1877, to said Weaver, which was, on motion of Houston’s attorney, referred to a master commissioner for examination as to all matters relating to confirmation. The master submitted a report to the effect, that the proceedings and sale were regular, and in conformity to law. Thereupon the sale was confirmed, and the sheriff was ordered to make a deed to the purchaser. At the same time, the purchase money was ordered to be applied : 1st, to the payment of costs; 2nd, to the payment of taxes ; 3d, to satisfy Houston’s mortgage, and the balance to be applied, as far as it would go, upon Weaver’s mortgage.
Afterwards, at the same term of court, March 15, 1877, the following order was made: “ On motion to the court, the entry heretofore made at this term of the court, confirming the sale of the premises, is set aside, and 'this cause is opened up, and it appearing to the court that the property had not been advertised for thirty days before the sale, and on motion to the court, it is ordered by the court that the sale in this cause be set aside, and by like order, the entry confirming said sale is vacated, and held for naught, and at the costs of plaintiff, and this cause is continued.”
The property on which the buildings had been situated, was again sold, under the decree of foreclosure, to Happersett 6 Hovey, and at the May term 1877, this sale was confirmed. Until after this last sale was confirmed, the mortgagor, defendant in error, remained in possession. It does not appear, that "Weaver, the first purchaser, had paid any part of liis bill, or had made any application of the balance of his bid to his own claim, as directed by the order of February 13. No deed was made under the first sale to Weaver, nor was he ever in possession. At the close of the trial to a jury, the. plaintiff in error requested the court to charge, as law, that a decree of foreclosure of a mortgage, and an order of sale, and a confirmation of the sale by the court, although set aside at the same term of the court, was such an alienation of the property as to avoid the policy, which the court refused, but did charge, that the minutes and journal entries of the court, were subject to be corrected, modified or vacated by the order of the court at the same term, and that the effect of these proceedings was as if no such sale and confirmation had been made. Under these instructions there was a verdict and judgment for plaintiff, which was affirmed by the district court.
The errors assigned arise upon the charge of the court and its refusal to charge as appeal’s in the foregoing statement.
Jemier & Tracy, for the plaintiff in error,
cited, Ohio St. 347, 565; 12 Allen, 384, 385; Rorer Jud. Sales, 213, § 580; 7 Pick. 554; 17 Ill. 156; Wood on Ins. 540, § 312.
Geiger <& Russell, for defendant in error,
6 Ohio, 34; 20 Ohio, 131; 3 Ohio St. 447; 2 Ohio St. 474; Rorer on Jud. Sales, 46, 49, 56, 57; 10 Ohio St. 565; 51 Pa. St. 61.

Opinion:
Johnson, J.
If Sampson had an insurable interest in the property at the time of the loss, he was entitled to recover. The quantity of that interest is not material, if it was substantial and valuable. If his relations to the property were such as that he would derive pecuniary value from its preservation, he has such interest. May on Insurance, chap. 4; "Wood on Insurance, chap. 8.
It must be conceded, that, as mortgagor in possession, the decree of foreclosure and order of sale, did not divest him of his insurable interest, neither did the unauthorized sale, for until the payment of the purchase money, and the order of confirmation of an authorized sale, he still might redeem if the order was reversed or set aside. Borer on Jud. Sales, § 128, 129.
The sale was confirmed February 13, the loss happened February 14, the order of confirmation was vacated March 15. and the property was subsequently sold and conveyed to a stranger, to whom possession was surrendered by the mortgagor. That the court had the power for sufficient cause to make the order of March 15, cannot now be controverted. The effect of this order was to decide that the property had not been regularly sold as authorized by law, and such was the fact. When the former order confirming the sale had been vacated, and the sale to Weaver, one of the mortgagees, set aside, in due course of law, the parties stood as if no sale had ever been made. This principle is settled by McBain v. McBain, 15 Ohio St. 337, where it was held, that where an order confirming a sale to a party is reversed, after a sheriff's deed has been executed and delivered, the title, if any, of the purchaser is divested by the order of reversal. It is there said, " that the confirmation having been reversed and set aside it becomes a nullity, and the case stands, at least as to parties, as though no confirmation had ever been made." A fortiori, the result must be the same in the case at bar, when the court at the same term, and for a reason that would warrant a reversal on error, vacates its own order, and sets the sale aside.
In such a case the mortgagor is entitled to redeem, until . the property is again regularly sold, and his interest thereby divested. Hubbell v. Broadwell, 8 Ohio, 120.
In a case of a sale of property to a stranger, a subsequent reversal of the judgment does not divest the purchaser's title. Rev. Stat. § 5409. But this statutory rule, which applies only to purchases by strangers, when the judgment is reversed, does not apply to a mortgagee who is a party, nor where the order of sale or confirmation is reversed. In such cases, the rule is as stated in McBain's case. Whether in the present case the result would be different if the purchaser was a stranger, was discussed in McBain's case, but need not now be considered. Much reliance is, by the plaintiff in error, placed on the case of Mt. Vernon Man. Co. v. The Summit Co. Mut. F. Ins. Co., 10 Ohio St. 347. In that case there was no question as to the power of the court to vacate its own orders improperly made at the same term of court. Certain chattel property had been purchased by a mortgagee in possession, and an order applying the proceeds to the debt secured had been made. Subsequently, the property, while in the purchaser's possession, was destroyed by fire. At the next term of the court, by consent of parties, the sale and confirma-tion was set aside. It was held, that as no order of confirmation was necessary of the personalty, and as the purchaser had been in possession several months, the order setting the sale aside could not divest the purchaser's title. The right of the insurance company as against the mortgagor had been fixed by the sale to the mortgagee, and the action of the court could not restore the policy to its original vigor, so as to cover a loss, for which it was not liable when the loss occurred. We are not inclined to carry the principle of that case beyond the facts there stated. The distinction between the two cases is radical. In that, there was a regular sale, which passed the title without confirmation. In this, the sale was unauthorized, and subject to reversal on error, or to be set aside by the court in a proper proceeding. In- that, the consent of all the parties could not divest the purchaser of his title, arid re-invest the mortgagor with an insurable interest, which had passed from him by the sale. In this, the sale, being invalid, passed no title, and was subject to be set aside or reversed on error at the instance of the mortgagor. In that, there was a valid sale, by which the property passed to the purchaser; while in this, it did not, as the proceedings were annulled by proper authority. We therefore hold, that on the facts of this case, the order of confirmation and sale was properly set aside, and that the mortgagor in possession was not, by such sale and confirmation, divested of his insurable interest in the property.
Judgment affirmed.