Springfield Steam Laundry Company v. Traders' Insurance Company of Chicago
| Decision Date | 26 June 1899 |
| Citation | 52 S.W. 238,151 Mo. 90 |
| Parties | Springfield Steam Laundry Company et al., Appellants, v. Traders' Insurance Company of Chicago |
| Court | Missouri Supreme Court |
Transferred from St. Louis Court of Appeals.
Reversed and remanded with directions).
Heffernan & Heffernan for appellants.
(1) There was no proceeding to foreclose, or of sale within the terms of the policy simply by the advertisement. The advertisement is alone a proposition of sale and for bidders to appear at a contemplated sale. There is no proceeding for the sale or for foreclosure until the property is put up for sale in accordance with the notice. Sansum's Digest of Insurance Law, p. 673; Ins. Co. v. Lewis, 30 Mich 41. (2) The defendant by its local agents could have waived this breach of policy, even if it was such. He had no right to know that this proceeding was taking place, and at the same time give the plaintiff to understand that the policy would remain in full force. Anthony v. Ins. Co., 48 Mo.App. 66; 11 Am. and Eng. Ency. of Law, note 3 and 7, p 323; Hamilton v. Ins. Co., 15 Mo.App. 59; Barnard v. Ins. Co., 38 Mo.App. 106; Cromwell v. Ins. Co., 17 Mo.App. 109; Combs v. Ins. Co., 43 Mo. 148; Francis v. Ins. Co., 42 Mo. 456; Hayward v. Ins. Co., 53 Mo. 181; Breckenridge v. Ins. Co., 87 Mo. 62. This is true although the policy provides that the agent can not change its terms or conditions or waive exceptions unless indorsed on the policy in writing. 11 Am. and Eng. Ency. of Law, pp. 338 and 339; Parks v. Ins. Co., 26 Mo.App. 536; Turner v. Ins. Co., 16 F. 454. (3) It having been found by the circuit court in the injunction proceedings that said notice of sale was unauthorized by the trustee, it was void, and therefore the policy was not avoided. And even if its provisions were suspended for the time being by this proceeding, yet when it was over with, not having been revoked by any action of the defendant, the policy would revive in favor of the assured and become available and in full force. Sansum's Digest of Ins. Law, pp. 693 and 694; School District v. Ins. Co., 62 Me. 330; Overmyer v. Ins. Co., 43 Mo. 573; Brown v. Ins. Co., 54 Mo. 221; Ins. Co. v. Needle, 52 Ill. 53; Ins. Co. v. Walsh, 54 Ill. 164.
Fyke, Yates & Fyke for respondent.
(1) Appellant's contention that the loss payable clause made the general provision of the policy, as to foreclosure, not applicable "because it must be presumed that the insurance company knew there would be a foreclosure in the event of default by the mortgagor," is not tenable. Titus v. Ins. Co., 81 N.Y. 410; 1 Biddle on Ins., sec. 325; Moore v. Ins. Co., 36 N.E. 191; McKinney v. Ins. Co., 30 S.W. 1004; Brunswick Sav. Inst. v. Ins. Co., 68 Me. 313; Ormsby v. Ins. Co., 58 N.W. 301; Kabrich v. Ins. Co., 48 Mo.App. 393. (2) The commencement of foreclosure proceedings avoids the policy. Ins. Co. v. Brown, 25 A. 992; Quinlan v. Ins. Co., 31 N.E. 31; McIntyre v. Ins. Co., 102 Mass. 230. (3) Appellant's contention that this policy was merely suspended upon the commencement of foreclosure proceedings, and that same revived when the injunction, which stopped the sale, was sued out, is in defiance of the plain contract provisions. The Overmeyer case, 43 Mo. 573, does not apply, for the reason that here we have a provision which was not in the Overmeyer contract, viz.: "nor in the event that this policy shall become void by reason of non-compliance with any of the terms or conditions thereof, shall the agent have power to waive, modify or revive the same, and any policy so made void shall remain void and of no effect, any contract by parol or otherwise or understanding with the agent to the contrary notwithstanding." It simply becomes a question in this case of enforcing this clear provision; that is all. (4) The fact that the commencement of foreclosure proceedings "was reported to and made known to the local agent of defendant," does not prevent a forfeiture. The policy lodges in the secretary, in the city of Chicago, alone, power to waive and modify its terms and conditions. Jenkins v. Ins. Co., 58 Mo.App. 210; Sprague v. Ins. Co., 49 Mo.App. 423; Shoup v. Ins. Co., 51 Mo.App. 286; Wilkins v. Ins. Co., 45 N.W. 1; O'Brien v. Ins. Co., 31 N.E. 265; Kirkman v. Ins. Co., 57 N.W. 952.
This is an action upon a policy of fire insurance.
At the time the policy was issued the property was mortgaged and the policy provided that any loss should be paid to the mortgagee.
The defense was that prior to the destruction of the property the conditions of the mortgage were violated and the property advertised for sale thereunder, and that by reason thereof the policy was invalidated and void at the time it was consumed by fire.
The cause was submitted to the court on an agreed statement of facts. The trial resulted in a judgment for defendant.
From this judgment plaintiffs appealed to the St. Louis Court of Appeals, where the judgment was affirmed, but because of the dissent by one of the judges of that court from the opinion therein rendered upon the ground of the opinion being in conflict with former decisions of this court, the case was certified to the Supreme Court.
The facts agreed upon are substantially as follows:
The property was owned by the Springfield Steam Laundry Company. The insurance was taken out by it, and by the terms of the policy the loss, in case of the destruction of the property, was to be paid to the mortgagee as his interest might appear. After the loss the claim was assigned by the mortgagee to the plaintiff Heffernan. The mortgage by its terms was subject to foreclosure if the taxes on the mortgaged property were permitted to become delinquent. This condition of the mortgage was broken, and by reason of it the trustee advertised the property for sale as provided by the terms of the mortgage. The sale was enjoined. Subsequently the taxes were paid and the injunction proceedings dismissed. A short time thereafter the fire occurred. The policy contained this provision, to wit: "If the property be sold, transferred, or is or becomes incumbered by mortgage or trust deed, or by judgment, tax or mechanics' lien, or upon the commencement of proceedings for its foreclosure or sale, or levy thereon by a law officer, or upon its passing into the hands of a receiver or trustee, or if this policy be assigned before a loss, then, and in every such case, this policy shall, without the written consent of this company thereto be indorsed hereon, become absolutely void." Another condition of the policy is as follows: "It is further understood and agreed, and made a part of this contract, that neither the agent who issued this policy, nor any other person, except its secretary in the city of Chicago, has authority to waive, modify or strike from the policy any of its terms and conditions, . . . nor in the event that this policy shall become void by reason of non-compliance with any of its terms or conditions thereof, shall the agent have power to waive, modify or revive the same, and any policy so made void shall remain void and of no effect, any contract by parol or otherwise or understanding with the agent to the contrary notwithstanding." It was further agreed that the local agent of the defendant, who issued the policy, had notice of the advertisement of the property for sale and the subsequent proceedings in reference thereto.
The court of its own motion declared the law to be that under the law and agreed statement of facts the plaintiff is not entitled to recover.
The first question for consideration is as to whether or not the advertisement of the property for sale under the deed of trust was the commencement of foreclosure proceedings within the meaning of the terms of the policy; if so, by one of its express provisions the policy became void and of no effect.
The case of Michigan Ins. Co. v. Lewis, 30 Mich. 41, was an action upon a policy of fire insurance in which it was provided that "in case of any transfer or termination of the interest of the insured, or any part of his interest, in the property hereby insured, either by sale, contract or otherwise, or in case any mortgage, lien or incumbrance shall be executed thereon, or shall attach thereto, or if the title thereto shall be in any way changed or affected after the date of this policy, or if any proceedings for sale thereof shall be had, commenced or taken, or if the title thereto shall be or become less than an absolute and perfect one, without such consent, this policy shall from thenceforth be void and of none effect." In that case as in the case at bar the only steps taken towards a foreclosure of the mortgage was to advertise the property for sale, in accordance with its provisions, and the supreme court in its opinion in passing upon the question as to whether or not the advertisement of the property for sale, was a "proceeding for sale" within the meaning of the policy said: ...
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