Brown v. Northwestern Mut. Fire Ass'n

• Decision Date: 23 March 1934
• Docket Number: 24833.
• Citation: Brown v. Northwestern Mut. Fire Ass'n, 176 Wash. 693, 30 P.2d 640 (Wash. 1934)
• Court: Washington Supreme Court
• Parties: BROWN et al. v. NORTHWESTERN MUT. FIRE ASS'N et al. NORTHWESTERN MUT. FIRE ASS'N v. BROWN et al.

30 P.2d 640

176 Wash. 693

BROWN et al. v. NORTHWESTERN MUT. FIRE ASS'N et al.

NORTHWESTERN MUT. FIRE ASS'N v. BROWN et al.

No. 24833.

Supreme Court of Washington

March 23, 1934

Department 2.

Appeal from Superior Court, King County; H. G. Sutton, Judge.

Consolidated actions by the Northwestern Mutual Fire Association against Howard W. Brown and wife, Edgar P. Bolton, and others, and by the Browns and Bolton against the fire association.From a judgment for the Browns and Bolton on the pleadings, the association appeals.

Affirmed.

Shank, Belt & Rode, of Seattle, for appellant.

Tucker & Tucker, of Seattle, for respondents.

HOLCOMB Justice.

This is an appeal from a judgment entered by the court below upon the pleadings in two consolidated actions involving the same state of facts.

The allegations of the respective pleadings are substantially as follows:

Appellant began one action against respondents and others for the foreclosure of a real estate mortgage which had been assigned to it for a valuable consideration by the Washington Mutual Savings Bank of Seattle.Respondents filed their answer to this foreclosure action and also commenced an action against appellant in which the following allegations are undenied by appellant:

That respondents, being then the owners of the mortgaged premises on November 4, 1929, entered into a forfeitable executory contract for the sale thereof to Dorothy Barger and her husband; that one of the terms of this contract was that the purchasers should insure the premises for the benefit of respondents; that according to such agreement, the Bargers procured a policy of insurance from appellant; that the Bargers failed to comply with the terms of their contract to purchase the property on account of which default, on November 22, 1932, respondents elected to declare the contract forfeited, and on that day commenced an action in the superior court of King county to have such contract declared forfeited and oust the Bargers from the possession of the property; that, while that action was pending, the property described in the policy of insurance was totally destroyed by fire; that the Bargers 'failed to make any proof of loss, and have failed to make any claim to the insurance aforesaid, and, in truth and in fact, they have no right, title, claim or interest therein or thereto'; and that appellant paid the Washington Mutual Savings Bank the full amount due upon the mortgage.The only allegation that is denied by appellant is that such payment was in satisfaction of the mortgage.

Appellant in its reply to the foreclosure action and answering respondents' action, alleged that the insured Dorothy C Barger had violated the terms of the insurance policy by forfeiting all her interest in the insured property by reason of the failure to comply with the terms and conditions of the contract of purchase and that respondents had '* * * irrevocably elected to declare such contract forfeited and had brought an action to eject the said Dorothy Barger from the said premises, which action was pending at the time of the said fire.That all of the matters and things aforesaid constituted an increase of the hazard and a breach of the said policy of insurance, and on account of the matters and things aforesaid the said policy of insurance was of no force and effect at the time of the said fire.'

In their action against the Bargers and appellant, respondents set up their contract with the Bargers which, among other things, included a provision to pay and satisfy a mortgage of $2,000 to the Washington Mutual Savings Bank of Seattle, and to make certain payments monthly to respondents, keep all taxes paid up, and keep the improvements on the premises insured for their full value for the benefit of the bank and respondents; that upon failure of any of these things the contract might be canceled.In accordance therewith she had procured a policy of fire insurance from appellant for $3,500 on the house and $400 on the garage and contents situated on the premises in her own name, the policy being dated August 19, 1930, and expiring August 19, 1933, the full premium for which was paid in advance.

The Bargers became delinquent in their payments both to the bank and respondents and failed to pay the taxes as required by the contract.Respondents served formal notice on the Bargers that, unless the delinquent payments and taxes were paid within thirty days, they would take action to have the contract canceled and ask for possession of the property.The Bargers failed to make up the delinquency, whereupon respondents on about November 22, 1932, filed their suit, which is one of the causes consolidated in this trial, asking a decree that the contract be canceled and that possession of the property be restored to respondents.The Bargers answered in this action setting up a defense, and Before the action came to trial the house on the premises, on about December 28, 1932, was totally destroyed by fire.Respondents caused proof of loss to be served upon appellant and were shortly thereafter informed by appellant by letter that respondents had no interest in the insurance money.Subsequent thereto appellant paid to the bank the sum of $1,847.45, the full balance remaining due on the mortgage, but caused the bank to assign to it the mortgage and note secured thereby.In their action against appellant, in which the Bargers were also made parties, respondents pray for judgment for the insurance money after first satisfying the mortgage on the record, the balance to be paid respondents in cash.

In its answer to the complaint in the lastmentioned action, appellant admits payment to the bank, and sets up as a defense that Dorothy Barger never had any title to the premises; that respondents had elected to declare the contract forfeited and had brought this action to eject her from the premises, which action was pending at the time of the fire--all of which constituted an increase of hazard and a breach of conditions in the policy of insurance as contained in the body of the policy.This is the only defense made by appellant in the pleadings in this last-mentioned suit.The Bargers made no answer to the two second actions.

Copies of the insurance policy and the rider, under which respondents claim, were attached to the pleading and made a part thereof.The policy followed the statutory form and contained the following clauses:

'This entire policy * * * shall be void * * * if the hazard be increased by any means within the control or knowledge of the insured * * * or if the interest of the insured be other than unconditional and sole ownership; or if the subject of insurance be a building on ground not owned by the insured in fee simple * * * or if any change * * * takes place in the interest, title or possession of the subject of insurance * * * whether by legal process or judgment or by voluntary act of the insured, or otherwise, or if this policy be assigned Before a loss. * * *'

'It is understood that Dorothy C. Barger, as Vendee, is/are in possession of the above described property under a contract of sale from Howard W. & Roselle Brown & Edgar P. Bolton, as vendor and that Washington Mutual Savings Bank is the holder of a mortgage or trust deed covering said property.It is agreed that subject to all terms and conditions of this policy and subject to the conditions of the mortgage clause (if any) made a part of this policy, loss if any thereunder, shall be payable as follows, to-wit:

'First: To Washington Mutual Savings Bank Mortgagee, address 1101 2nd Ave., Seattle, Wash., or holder of a trust deed if any to an amount not exceeding the indebtedness secured by said property at the time of loss; 'Second: To Howard W. & Roselle Brown & Edgar P. Bolton, vendor, address1343 So. Sycamore Ave., Los Angeles, Calif., to an amount not exceeding the balance due at the time of loss upon the contract of sale above referred to;

'Third: To Dorothy C. Barger, vendee, address Burton, Wash.

'Provided however, that in no event shall any of the above payments, or the aggregate thereof exceed the amount for which this policy is written, or the amount for which this company may be liable on any loss thereunder; and provided, further, that if, at the time of any loss there be other insurance whether valid or not, on either the interest of the vendor or...