Chipman v. Carroll

• Decision Date: 10 March 1894
• Citation: 53 Kan. 163,35 P. 1109
• Parties: CHIPMAN et al. v. CARROLL et al.
• Court: Kansas Supreme Court

35 P. 1109

53 Kan. 163

CHIPMAN et al. v. CARROLL et al.

Supreme Court of Kansas

March 10, 1894

Syllabus

1. Where there is an agreement between the mortgagor and the mortgagee that the mortgagor shall keep the premises insured for the benefit of the mortgagee, and in fulfillment of this agreement the mortgagor takes out a policy of insurance in his own name, which is not assigned to the mortgagee, or made payable to him in any way, the mortgagee is regarded as having an equitable lien upon the proceeds of the policy; and where the mortgagee obtains judgment upon his mortgage, but before there is any sale or conveyance the mortgagor takes out a policy of insurance in his own name, and a loss occurs before any sale, the mortgagee is entitled to recover the loss, as the judgment does not extinguish his debt.

2. Where the husband and wife jointly execute a mortgage upon their homestead, and there is an agreement that the premises shall be insured for the benefit of the mortgagee, and subsequently the husband takes out a policy of insurance upon the premises in his own name, and soon after a loss occurs the mortgagee has an equitable lien on the proceeds of the policy, and such proceeds are not exempt upon the ground that the policy was upon the homestead of the parties.

3. After a loss, the insurance company may be garnished, where the payment of the loss is not conditional on anything remaining to be done. [Copyrighted Material Omitted]

Error from district court Miami county; John T. Burris Judge.

Action by Daniel L. Chipman and Ephraim Mower against Jennie C. Carroll and others, defendants, and the People’s Insurance Company, garnishee. From the judgment rendered, plaintiffs bring error. Reversed.

The other facts fully appear in the following statement by HORTON, C. J.:

On June 2, 1887, Frank S. Carroll and wife executed a note and mortgage for $1,500 to Daniel L. Chipman, and on the same day executed a second note and mortgage, for $500, to Ephraim Mower. The land described in the mortgages then constituted the homestead of Frank S. Carroll, and the title to the same was in him. The mortgage to Chipman contained the following clause: “But if default be made in such payment, or any part thereof, or interest thereon, or the taxes, or if the insurance is not kept up thereon, then this conveyance shall become absolute.” Frank S. Carroll transacted the business in negotiating the loans, and Chipman and Mower then and ever being nonresidents of this state, transacted their business through C. W. Chandler, their agent at Paola, in this state, who was afterwards succeeded by Chandler Bros., and that firm continued acting as the agents of Chipman and Mower. After the execution of the mortgage, the dwelling was insured by Frank S. Carroll, and, by clause attached to the policy, the loss, if any, was made payable to Chipman or his assigns. On November 27, 1889, judgment was rendered upon the mortgages above recited for $1,636.64, with 9 per cent. from that date, in favor of Chipman, and for $569.42, with 9 per cent. from that date, in favor of Mower, and the land ordered sold by virtue of the mortgages. On March 29, 1890, Frank S. Carroll, in his own name, negotiated insurance upon his dwelling with the People’s Insurance Company, of New Hampshire, in a sum over $1,200, and with the Burlington Insurance Company, of Lowa, in the sum of $900. On April 13, 1890, the dwelling was totally destroyed by fire. On April 21, 1890, special execution was issued, ordering the sale of the land to satisfy the judgments in favor of Chipman and Mower. On April 26, 1890, Chipman and Mower, by F. M. Chandler, of the firm of Chandler Bros., their agent, filed an affidavit for garnishment against the insurance companies, stating the amount of the judgments; that the same were still in full force, wholly unpaid, and not subject to any counterclaim or set–off; that execution had been issued thereon, but would not be returnable for more than 30 days; that Frank S. Carroll and Jennie C. Carroll has not property enough, subject to execution to satisfy the judgments, or even the had thereof; that the money due from the insurance companies was not exempt,—and reciting other material facts. On the same day a garnishee summons was issued to the insurance companies, and served by the sheriff, by delivering copies thereof to N.W. Wells, as the manager and agent of the companies at Paola, in this state, and be delivering a copy thereof to the defendant Frank S. Carroll and wife. On May 10, 1890, another garnishment summons was issued, and served May 12, 1890, by the Kansas state superintendent of insurance. On May 10, 1890, and immediately after receiving a copy of the garnishee summons, Frank S. Carroll went to Kansas City, Mo., and attempted to make an assignment of the insurance due from the People’s Insurance Company to one S. Schulien. On May 27 1890, the People’s Insurance Company filed in the action its answer as garnishee, in which it stated that, by its policy No. 69,967 it insured the one–story frame building and additions of Frank S. Carroll for $1,200, and on May 23d received proofs of loss, by fire of April 13th, and afterwards received notice of the alleged assignment to Schulien and that it was ready to pay the $1,200, due under the policy to the party entitled to receive it. On June 4, 1890, Frank S. Carroll and wife filed their verified answer to the affidavit for garnishment, stating (1) that Mower and Chipman should not...