Christensen v. Fid. Ins. Co.

• Decision Date: 17 May 1902
• Citation: 90 N.W. 495,117 Iowa 77
• Parties: CHRISTENSEN ET AL. v. FIDELITY INS. CO.
• Court: Iowa Supreme Court

117 Iowa 77

90 N.W. 495

CHRISTENSEN ET AL.

v.FIDELITY INS. CO.

Supreme Court of Iowa.

May 17, 1902.

Appeal from district court, Tama county; G. W. Burnham, Judge.

Action by the insured for indemnity stipulated in policy of insurance. The mortgagee intervened, and demanded payment of damages by virtue of an open mortgage clause contained in the policy. Judgment was entered for the defendant, and plaintiff and intervener appeal. Reversed.G. R. Struble, for appellants.

McVey & McVey, for appellee.

LADD, C. J.

The property insured had been mortgaged to H. J. Stevens, since deceased, of whose estate the intervener is administrator. It was consumed by fire January 10, 1899. Among its provisions is the stipulation that it, “unless otherwise provided by agreement indorsed hereon or added hereto, shall be void * * * if the property, real or personal, covered by this policy, or any part thereof, be or become incumbered by a mortgage, trust deed, judgment, or otherwise, or, with the knowledge of the insured, foreclosure proceedings be commenced.” September 27, 1898, foreclosure proceedings were begun with the knowledge of the insured, though unknown to the company until after the loss. It is likely that, owing to this breach of condition, loss cannot be recovered by the insured. But the policy also contained the stipulation: “Loss, if any, payable to H. J. Stevens, mortgagee, as his interest may appear at the time of same.” Probably this alone, as contended by appellee, cannot be treated as an independent contract between the company and the mortgagee. Certainly, the weight of authority is to the effect that it amounts to no more than a stipulation to pay from the proceeds of the policy so much as shall be required to satisfy the mortgage, the contract being solely with the assured. Grosvenor v. Insurance Co., 17 N. Y. 391;Williamson v. Insurance Co., 86 Wis. 393, 57 N. W. 46, 39 Am. St. Rep. 906;Insurance Co. v. Hulman, 92 Ill. 145, 34 Am. Rep. 122;Milliken v. Woodward (N. J. Sup.) 45 Atl. 796. See cases collected 13 Am. & Eng. Enc. Law, 202. But see Burrows v. McCalley, 17 Wash. 269, 49 Pac. 508. Without passing on the question, it will suffice to say that this court is committed to the doctrine that the mortgagee has such an interest in the policy that, in event of loss, he may maintain an action thereon as the real party in interest. Mershon v. Insurance Co., 34 Iowa, 87;Bartlett v. Insurance Co., 77 Iowa, 86, 41 N. W. 579. Without more, however, this clause would not interfere with the forfeiture of the policy by the acts or the omissions of the assured. See cases cited 13 Am. & Eng. Enc. Law, 202. This result is obviated by another condition of the policy, which reads: “If, with the consent of this company, an interest under this policy shall exist in favor of a mortgagee or of any person or corporation having an interest in the subject of insurance other than the interest of the insured as described herein, the conditions hereinbefore contained shall apply in the manner expressed in such provisions and conditions of insurance relating to such interest as shall be written upon, attached, or appended hereto.” The loss payable clause clearly confers “an interest under this policy.” It may not be an interest in the policy resulting from any contract between the company and the mortgagee. But this was not necessary, as the insured and the...