Court Opinion

ID: 4724953
Source: CourtListenerOpinion
Date Created: 2021-08-12 02:50:53.056514+00
Date Added: 2024-06-11T08:07:47.615100
License: Public Domain

Anders, J.
(dissenting). — It appears from the record in this case, as stated in the opinion of the majority of this court, that one Andrew Raub was the owner of land upon which was situated a house; that he borrowed $400 from one Minnie Wegner, and, to secure the payment thereof, executed a mortgage up,on the premises, and agreed in said *454mortgage to keep said house insured in the sum of- $300, loss, if any, payable to said Minnie Wegner, her heirs or assigns, until the said mortgage was fully paid; that subsequently, and on the date of said mortgage, the appellant insured the said property against loss by fire in the sum of $300, the policy naming Raub as the insured, and containing the provision, “loss, if any, payable to Minnie Wegner, mortgagee, as her interest may appear;” that subsequently Raub transferred his interest in said property to one Edith Sheridan, without the knowledge of the mortgagee; that the house covered by the policy of insurance was thereafter entirely destroyed by fire, and was of greater value than the amount of the insurance; that no payments have been made upon the said mortgage, and that proofs of loss were offered by said Wegner, but that appellant refused to accept such proofs and to pay said loss; and that said Wegner, thereafter assigned her rights under said policy, as well as her mortgage, to the respondent, who brought this action to recover the amount of the insurance and costs. The facts above stated were substantially set forth in the complaint, and were not denied by the appellant. The policy .upon which this action is based provides, in addition to the provision as to the payment of loss, if any, to the mortgagee, above set forth, as follows:
“This entire policy, unless otherwise provided by agreement endorsed hereon or added hereto, shall be void if the insured now has or shall hereafter make or procure any other contract of insurance, whether valid or not, on the property covered in whole -or in part by this policy; or if any change other than by the death of the insured, take place in the interest, title or possession of the subject of insurance (except change of occupants without increase of hazard) whether by legal process or judgment, or by voluntary act of the insured or otherwise ... If, with the consent of this company, an interest under the policy shall exist in favor of a mortgagee, or of any person *455or corporation having an interest in the subject of insurance other than the interest of the insured as described herein, the conditons hereinbefore contained shall apply in the manner expressed in such provisions and conditions of insurance relating to such interest as shall be written upon, attached or appended thereto . . . This policy is made and accepted subject to the foregoing stipulations and conditions, together with such other provisions, agreements or conditions as may be endorsed hereon or added hereto.”
The appellant in its answer alleges, in effect, among other things, that the respondent’s rights under the policy sued on had been forfeited by the sale of the property by Raub, the insured, to Edith Sheridan, and by the procuring of other insurance upon the building by such grantee, without the knowledge or consent of the appellant. A demurrer was sustained to the answer, and judgment entered in favor of the plaintiff (respondent) in accordance with the prayer of the complaint. It is stated in the prevailing opinion of the court that “the questions raised upon this appeal depend upon the question whether Andrew Raub was the insured under the policy of insurance, or whether Minnie Wegner was the insured,” and that “the determination of this question must depend upon the construction of the contract of insurance.” But, in my judgment, the question whether or not Minnie Wegner was the insured is not now before this court for determination. It was not alleged in the complaint herein that she was the insured. Oh the contrary, the insurance policy was made a part of respondent’s complaint, and it shows upon its face that Raub, and not Wegner, was the insured. The execution of the policy set out in the complaint was admitted by the defendant company, and it therefore follows that there was no ground for controversy upon this question in the trial court. Of course, I do not mean to say, or to be understood as saying, that Minnie Wegner obtained no *456rights as against the insurer by virtue of the policy issued to Raub. But I do say that it appears to my mind that the rights she had were not those of a party to the contract between the insurance company and Raub, but simply of a beneficiary thereunder. And her right of recovery, as against the company, upon the policy under consideration, depends, in my opinion, entirely upon the question whether the insured (that is, Raub) could recover if he was suing upon his policy; and, from the undisputed facts in the case, it is plain that he would have had in that event no cause of action against the appellant company.
It is also said in the majority opinion that “the general rule is that when a mortgagor procures a policy of insurance to be issued to himself, loss, if any, payable to the mortgagee as interest may appear, the former is the insured, and subsequent alienation avoids the policy.-'’ I do not doubt the correctness of that proposition, for it is in accord with both reason and authority, and I think the rule thus laid down should be applied in this case. If it is not applicable here, it must in some way appear that this ease presents an exception to the “general rule,” and I am utterly unable to discover that it does. It will not do to say that the company intended- to insure the interest of the mortgagee in the property described in the policy, in the absence of any statement in the contract or in the record indicative. of. such intention. It must be borne in mind that no fraud is imputed to appellant in regard to the form or contents of the policy, and that no claim is made that any party interested in it was unaware of its provisions at the time it was issued and delivered; and, its language being plain and unambiguous, there is no reason for invoking any technical rule of construction in order to ascertain its meaning. It must also be borne in mind that the policy in question contains no clause securing the mortgagee *457against tliose acts of the mortgagor, the doing of which, it was agreed, should render the “entire policy” void.
It plainly appears from the record herein that the mortgage clause in the policy of insurance is in the precise form stipulated for hy the mortgagee, Minnie Wegner, in her agreement with Ranh, which, it is alleged in the complaint, was inserted in the mortgage executed by the latter. If this mortgagee desired to secure herself against the acts of the mortgagor, she could easily have done so by causing a stipulation to that effect to be “written upon, attached, or appended” to the policy, as was done in Pioneer Savings & Loan Co. v. Providence, etc., Ins. Co., 17 Wash. 175, cited by the court. But it is virtually held by this court, contrary to what it declares to be the “general rule,” that no such direct stipulation .was necessary; that in this instance the mortgagee was secured against the acts of the mortgagor hy virtue of the provision in the policy that “if, with the consent of this company, an interest under the policy shall exist in favor of a mortgagee or of any person or corporation having an interest in the subject of insurance, other than the interest of the insured as described herein, the conditions [against alienation, etc.] hereinbefore contained shall apply in the manner expressed in such provisions and conditions of insurance relating to such interest as shall be written upon, attached, or appended hereto.” Mow, what condition or provision 0f insurance relating to the interest of the mortgagee ivas written upon, attached, or appended to the policy ? There was none, it will be observed, other than this: “loss, if any' payable to Minnie Wegner, mortgagee, as her interest may appear;” and it does not even purport to express the manner in which tire provision that “this entire policy, unless otherwise provided hy agreement endorsed hereon or added hereto, shall be void ... if any change other than by the death of *458the insured take place in the interest, title, or possession of the subject of insurance ... by voluntary act of the insured or otherwise,” shall apply to the “interest” of the mortgagee. And, that being true, I am unable to understand by what course of reasoning or rule of construction it can be said, as the majority of the court say, that “when the company consented to the existence of the interest of Minnie Wegner by recognizing her as mortgagee and payee and delivering the contract to her, and when it said 'the conditions hereinbefore contained shall apply in the manner expressed in such provisions . . - as. shall bo written upon, attached or appended thereto,’ and when in the slip recognizing her as mortgagee and payee no provisions relating to forfeiture were contained, the effect of such action by the company was as though it had said expressly, 'this insurance shall not be invalidated by any act or neglect of the mortgagor of the within described property, nor by any foreclosure nor by any change in the title or ownership of the property, nor by the occupation of the premises for purposes more hazardous than are permitted by this policy, nor by the owner procuring other insurance.’ ” In my opinion, the mortgage slip attached to the policy amounted to nothing more than a simple agreement that the company might pay the loss, when ay able, to the mortgagee for and on account of the insured. In no other respect did it affect, or purport to affect, the contract between the insurer and the insrxred. This court in its decision seems to have been influenced largely by the opinion of the supreme court of Nebraska in the case of Oakland Home Ins. Co. v. Bank of Commerce, 47 Neb. 717. That case is also reported in 58 Am. St. Rep.' 663; and Mr. Freeman, the learned annotator and reporter, says in his note on page 667 that “that case goes to the extreme, if not questionable, limit, in uphold*459ing the rights of the mortgagee, where there is no clause in the policy securing the mortgagee against any act or neglect of the mortgagor.” The mortgage clause in .that case was similar to that in the case at bar, but, from a careful consideration of the opinion, I am thoroughly convinced that the decision is contrary to the general current of authority, and should not be followed by this court.
For the foregoing reasons, I am of the opinion that the trial court erred in sustaining the demurrer to the appellant’s answer, and that the judgment should be reversed.