Colby v. Parkersburg Ins. Co.
| Citation | 37 W.Va. 789 |
| Court | Supreme Court of West Virginia |
| Decision Date | 01 April 1893 |
| Parties | Colby v. Parkersburg Insurance Co. |
1. Insurance Mortgage.
A policy of fire insurance insures A. in a given sum, part of it on one property, part on another, loss payable to B. "mortgagee, as his interest may appear." B.'s mortgage covers only one of the properties insured. B. may sue on the policy in his own name and recover total loss on both properties not exceeding his debt, notwithstanding his mortgage covers only one of the properties insured.
Merrick & Smith for plaintiff in error:
I. A general creditor has no insurable interest in his debtor's property. 1 Wood. Ins. § 300; 5 Hun 343; 49 Conn. 167; 11 Am. & Eng. Ency. L. 317.
II. An Insurance Company can not insure the payment of a debt 9 Allen 123; 5 Hun 321; 16 Hun 116; 55 X. Y. 343.
III. Insured must have an insurable interest in the property. 1 Wood Ins. §§ 265, 266; 94 U. S. 460, 457; 62 X. Y. 54; 98 II. S. 538; 93 IT. S. 543; 11 Am. & Eng. Ency. L. 812, notes 4, 5, 6; 20 Am. Dec. 515, 516.
IY. A mortgagee insuring independently of the mortgageor can recover only to the extent of his interest, of which the debt secured is the measure. 54 Am. Dec. 695, Part Xo. 8 of note; May Ins. § 424; 16 Pet. 495; 55 1ST. Y. 343; 21 IT. C. C. 293; 2 Dutch, 541.
Y. If a mortgageor insures for himself, the mortgagee has no claim to the proceeds. May Ins. § 449; Aug. Ins. § 60; Phill. Ins. §§ 296, 1962; 10 Pet. 512; 57 la. 30; 124 Mass. 61; 11 Ins. L. J. 677; 8 Paige, 437; 24 Am. Rep. 488; 20 Ohio, 185; 5 P. 1. 491
VI. Plaintiff in this case can only recover so fir as he shows (en insurable interest as mortgagee in the property insured. May Ins. 449, 447a; 1 Wood, Ins. § 119; 3 Bosw. 516; 50 Wis. 240; 91 N. Y. 192; 50 Am. Dec. 591; 2 Mo App. 311; 65NY.6; 11 Fed. Rep. 29; 48 Mich. 148; 37 Mich. 609.
VII. Where policy covers other property than that mortgaged, no action can be maintained on the policy in name of mortgagee. 48 Mich. 148; 37 Mich. 608.
VIII. Proofs must be filed in thirty days or no recovery. 25 W. Va. 667-8; 2 Wood, Ins. § 436.
IX. No waiver of defence by adjustment as there was no agreement to 'pay. 2 Wood, Ins. §§ 450, 482; 10 W. Va. 563.
X. No waiver of proofs. 2 Wood, Ins. 943; 6 W. Va. 432; 64 X. Y. 152; 30 X. Y. 136.
XL When proofs not in time, not necessary to object to them. 2 Wood, Ins. 948; 11 Mo. 278; 64 X. Y. 136.
Van Winkle & Ambler for defendant in error:
I. Verdict approved by trial Judgment must stand unless manifestly against right and justice, 16 W. Va. 308.
II. The adjustment of loss with plaintiff entitled him to judgment 10 W. Va. 546.
III. Adjustment with severed companies and, settlement by assured on that basis estops each, company to deny its debt. Big. Estop. 632; 54 Cal. 422.
IV. Machinery in manufactories part of the realty. 16 W. Va. 428; 15 S. E. Rep, 408.
V. Presumption that the assured, had, an interest in the property. 21 W. Va. 368.
VI. Assignment of policy. Fland, Ins. 441; May Ins. § 378; Id. 449; Wood Ins. § 364; Id. 366; LP 473; 1 Bar. L. Pr. 238; Dra. Att. §§ 609, 614; 86 Am. Dec. 351; 88 Am. Dec. 174; 95 Am. Dec. 790; 32 W. Va. 283; Code, c. 99, s. 14; 3 Rob. Pr. 3.
VII. Plaintiff's interest was in the policy. 16 Pet. 496; Wood Ins. § 473.
VIII. The word, uMortgage " merely descriptive. 7 Leigh, 604.
IX. Policy payable to a third party. 5 Wall. 509; Wood Ins. §§ 370, 514. 362; Code. c. 71, s. 2.
X. Adjustment, effect of and, parties to. Wood Ins. § 482; Id. 450; 10 W. Va 546; Eng. & Am. Enc. L. 1050; 10 W. Va. 583; Id. 572; Id. 560.
In an action by Colby against the Parkersburg Insurance Company Colby recovered judgment, and the company sued out this writ of error. The policy of insurance on which the action was brought insured in the sum of one thousand dollars Law, Hatch & Co. against loss by fire three hundred and thirty three dollars and thirty three cents upon an engine, boiler, machinery, and tools in a building occupied for the manufacture of furniture; and six hundred and sixty six dollars and sixty six cents on stock manufactured, materials and supplies, raw, wrought and in process in said building. The policy, while in the name of and insuring Law, Hatch & Co., the owners of the property insured, contained the clause that the insurancemoney should be "payable in case of loss to W. M. Colby, mortgagee, as his interest may appear." This clause furnishes the ground of contention in the case.
Colby held a mortgage for eight thousand dollars, given by Law, Hatch & Co. upon the land and buildings and fixtures thereon. It plainly did not cover the personal property in the way of stock and material on hand, though I think, it did cover the engine, boiler and machinery, because they being used in the building in manufacturing would be fixtures and part of the realty, and also because fixtures are named in the mortgage. McFadden v. Crawford, 36 W. Va. 671 (15 S.E. Rep. 408). In the adjustment of the loss by fire one hundred and sixty seven dollars and twelve cents was set down for loss on the machinery, and five hundred and forty nine dollars for loss on stock, material, etc., and Colby recovered for the total of both sums.
The company contends that he can not recover anything, or at most can recover only for the loss on machinery, and nothing for the loss on the stock and materials, because they are personal property, not covered by the mortgage, and thus Colby had no interest in that part of the property insured suffered no loss as to it; that a party to recover, must have an interest an insurable interest in the thing insured, otherwise the policy is void. That a party insuring property against fire must have an insurable interest in the property at the time of the issue of the policy and also at the time of the loss, such as would bring damage to him in case of its injury or destruction by fire, is settled law of insurance. Sheppard v. Insurance Co., 21 W. Va. 368.
In this case the parties taking out the policy Law, Hatch & Co. comply with this requirement, since they owned all the property insured. But it is said that is not enough; that Colby, too, must have an insurable interest in the thing insured. That may not be so clear. Law, Hatch & Co. might under most of the cases have had the policy direct payment to Colby, though he had no interest by mortgage or otherwise, and he could have sued upon it a fact proving that it was unnecessary for him to have such interest merely in order to be named as payee, though, were he taking a policy himself as mortgagee, his mortgage must cover the property insured.
But though to be named in the policy as payee, he need not have an interest in the property, yet that does not solve the question in this cause, because the policy does not merely direct payment in case of loss to Colby, but also annexes the words," mortgagee, as his interest may appear," not even simply saying " as his interest may appear," but as his interest may appear as mortgagee.
What do those words making it payable to Colby," mortgagee, as his interest may appear," mean? Do they mean that if Colby be a general creditor of Law, Hatch & Co., irrespective of and outside the mortgage (and he was) such an interest would entitle him to payment? I think not, because there is the word " mortgagee," telling us that he must have an interest in the character of mortgagee. That being so, are we not compelled to then inquire what are his rights as a mortgagee? What property covered by bis mortgage has been injured, entailing loss on him? I incline to think so. When we do so inquire, we find his mortgage covers only a portion of the property insured. The fire has not injured him as to other property, because he had no kind of interest in it. The policy itself demands, as a requisite of payment to him, that at the date of loss he show an interest. An interest in what? Why, in the property insured.
The view that the interest is interest in the property insured is sustained by the case of Pitney v. Insurance Co., 65 N. Y. 6, holding that a policy requiring loss to be paid to a mortgage "as his interest may appear" imports ownership in the property insured. The parties, in issuing and receiving the policy, knew that in the event of loss so much would be assessed for machinery, so much on stock, and the mortgagee would get that part assessed for loss sustained by him as mortgagee in the loss of the property included in his mortgage.
In a Michigan case involving a policy like this, issued to Headly, insuring different properties in different sums, pay able, in event of loss, "to the executors of the estate of Ira 100 Davenport, as mortgagees, as their interest may appear," and a mortgage covered only a part of the property, it was held that the executors could not sue, their interest being only on a part of the property; and as the insured, Ileadly, had some interest, a single insurance policy could not be split up into different actions. Insurance Co. v. Davenport, 37Mich. 609, followed in Thatch v. Insurance Co., 11 Fed. Rep. 29. So loss payable "to J. F. to the extent of his mortgage interest," held not an assignment, and J. F. could not sue, though loss did not exceed his mortgage. Insurance Co. v. Felrath, 77 Ala. 194. No pointedly adverse decisions are cited.
It is difficult for me to see how in such case as this, Colby having a mortgage on only part of the property, can yet recover for the loss of all. It would at the same time seem not entirely clear that the Michigan decision, wholly excluding him from suit, is tenable. That Court says that in such a policy the interests of Law, Hatch & Co. and Colby are several, not joint. If so, each could sue, because, where an instrument confers upon two persons several or separate rights, each may sue, just as, where it imposes on two persons separate obligations, each may be sued. 3 Rob. Pr. (New) 91; 1 Pars. Cont. 13. This view, which would allow...
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