Bowman v. Hartford Fire Ins. Co.., (No. 7505)

• Decision Date: 04 April 1933
• Docket Number: (No. 7505)
• Citation: 113 W.Va. 784
• Parties: Mary W. Bowman v. Hartford Fire Insurance Companyet al.
• Court: West Virginia Supreme Court

113 W.Va. 784

Mary W. Bowman

v.

Hartford Fire Insurance Company

et al.

(No. 7505)

Supreme Court of Appeals of West Virginia.

Submitted March 1, 1933.

Decided April 4, 1933

Rehearing denied June 8, 1933

1. Insurance

A vendor of real property who retains a vendor's lien to secure the purchase price has an insurable interest.

2. Judgment

Decretal judgment may be rendered against an insurer without reformation of the policy, in a suit to reform the policy and for judgment thereon when reformed, if the bill also prays such further and complete relief as to the court may seem just and equitable in the premises.

Litz, Judge, absent.

Appeal from Circuit Court, Roane County.

Suit by Mary W. Bowman against the Hartford Fire Insurance Company and others. From an adverse decree, the named defendant appeals.

Affirmed.

Steptoe & Johnson, Stanley C. Morris, and J. Hornor Davis, 2d, for appellant.

Harper & Baker, for appellee.

Woods, Judge:

The purpose of this suit was the reformation of a $5,000.00 fire insurance policy, and a recovery thereunder to the full amount of the damage occasioned by fire. The insurance company appeals from a decretal judgment in favor of the plaintiff in the amount of $1,500.00 the stipulated damage to the dwelling in question.

Plaintiff, on October 26, 1925, conveyed a house and lot to one Josiah Stutler, retaining a vendor's lien to secure the pay- ment of nine $1,000.00 purchase money notes, payable in one to nine years, respectively, with interest. There was no covenant in the deed requiring the purchaser to keep the dwelling house insured for the benefit of the plaintiff. However, upon default in payment of certain of the notes, Stutler, in order to get further time, agreed to and did take out a policy of insurance on the dwelling, with a loss payable clause to plaintiff as her interests should appear. A short time before this policy expired, Russell T. Keith, a new agent for defendant company called Stutler's attention to the fact that the policy was about to expire, and was directed to renew the same, omitting the "loss payable clause". Keith communicated with plaintiff, and was informed that there was due plaintiff some $6,000.00, and that she had a vendor's lien against the same. The renewal policy was made in the same form as the expiring policy. Stutler refused the policy.

Thereupon plaintiff, in order to protect her interests under the vendor's lien, asked defendant's agent for a policy for her sole benefit in an amount of $5,000.00 the defendant Stutler still owing $6,000.00 on the purchase price; and suit to sell under the vendor's lien having, a few weeks prior thereto, been instituted. A policy was prepared by the agent, as he thought, for plaintiff's sole benefit. It was made in the name of Stutler, with loss payable to plaintiff as her interest might appear, and carried the usual provision: "This Company shall not be liable for a greater proportion of any loss or damage than the amount hereby insured shall bear to the whole insurance covering the property, whether valid or not and whether collectible or not." Some days later Stutler took out a $5,000.00 policy with another company for his sole benefit. The defendant company denied liability for more than $750.00, by reason of the additional insurance clause, stating that both policies were taken in the name of defendant Stutler. In view of such fact, plaintiff because of Stutter's insurance being to his own benefit, is deprived of the full amount of her contract; hence, she asks reformation.

There is no question but that the vendor of real property who retains a lien or takes back a mortgage has an insurable interst. 1 Cooley's Briefs on Insurance 259; New Brunswick Fire Ins. Co. v. Morris Plan Bank, 136 Va. 402, 118 S. E. 236; Hamlet v. American Eagle Fire Ins. Co., 107 W. Va 687. 150 S. E. 7.

The insurance company takes the position that the usual way of writing a policy to protect a vendor, under a vendor's lien, is by a policy in the name of the purchaser, with "loss payable clause" to the vendor as her interest should appear in fact that they know of no form for a policy such as plaintiff seeks to create by reformation. In the ordinary case such a procedure as contended for by the insurance company would suffice. But, such is not the case where the interests of the vendor and vendee are antagonistic. The vendee has declined to protect the interest of the vendor; so she seeks to protect that interest by taking out insurance for herself....