Court Opinion

ID: 8195370
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:18:38.135403+00
Date Added: 2024-06-11T16:40:45.168765
License: Public Domain

The following opinion was filed May 3, 1927:

On rehearing.

Per Curiam.
By way of a motion for rehearing it has been called to the attention of the court that some questions remained undisposed of by the opinion as filed. It is stated in the opinion:
“The policies issued by the Farmers and the Marquette on February 25th were issued with full knowledge of the Searls and Wiltrout mortgages and are therefore valid but not concurrent.”
Counsel correctly interpret this as meaning not concurrent with other mortgagor policies. They are concurrent as to each other.
On behalf of the mortgagee policies it is argued that they are policies of indemnity and that the insurers under those policies are entitled to subrogation; that the debt having been satisfied there is nothing to subrogate them to, and for that reason the plaintiff mortgagor cannot recover.
The standard policy contains the following clause in relation to subrogation:
“If loss or damage is made payable, in whole or in part, to a mortgagee not named herein as the insured, this policy may be canceled as to such interest by giving to such mortgagee a ten days’ written notice of cancellation. Upon failure of the insured to render proof of loss such mortgagee shall, as if named as insured hereunder, but within sixty *634days after notice of such failure, render proof of loss and shall be subject to the provisions hereof as to appraisal and times of payment and of bringing suit. On payment to such mortgagee of any sum for loss or damage hereunder, if this company shall claim that as to the mortgagor or owner, no liability existed, it shall, to the extent of such payment be subrogated to the mortgagee’s right of recovery and claim upon the collateral to the mortgage debt, but without impairing the mortgagee’s right to sue; or it may pay the mortgage debt and require an assignment thereof and of the mortgage.” Sec. 203.04, Stats.
All of the policies (both mortgagor and mortgagee) were written by a single agent who was fully informed of the purposes of all parties to the transaction. In fact, it was upon his advice and suggestion that the transaction took the form that it did. The express desire of the mortgagor was to secure the mortgagee against loss by fire and at the same time protect to that extent its own interest. Upon the advice of the agent, the bill of sale was executed and the policies issued in the name of the mortgagee. The mortgagor procured and paid the premium upon all of the various policies.
It seems to be well established that where insurance has been procured at the expense of the mortgagor and for the benefit of the mortgagee as well as himself, upon payment of a loss the amount paid must be applied upon the indebtedness. 11 A. L. R. 1296, par. 4, col. 2, and cases cited; 118 Am. St. Rep. 970, note, “Insurance at Expense of Mortgagor;” Baker v. Monumental Sav. & L. Asso. 58 W. Va. 408, 52 S. E. 403, 3 L. R. A. n. s. 79; 5 Joyce, Insurance (2d ed.) p. 5895, § 3556; Pendleton v. Elliott, 67 Mich. 496, 35 N. W. 97; 41 A. L. R. 1274; Burton-Lingo Co. v. Patton, 15 New Mex. 304, 107 Pac. 679, 27 L. R. A. n. s. 420; 26 Corp. Jur. pp. 455-461, § 625, and cases cited.
Here the insurance companies not only did not pay the *635loss to the mortgagee but denied all liability both as to the mortgagee and the mortgagor.
For these reasons tve conclude that the right of subro-gation does not exist under the facts in this case.