Cont'l Ins. Co v. Anderson

• Decision Date: 22 July 1899
• Parties: CONTINENTAL INS. CO. v. ANDERSON et al.
• Court: Georgia Supreme Court

33 S.E. 887

107 Ga. 541

CONTINENTAL INS. CO.

v.ANDERSON et al.

Supreme Court of Georgia.

July 22, 1899.

FIRE INSURANCE — MORTGAGE CLAUSE — CHANGE OF TITLE—NOTICE BY CREDITOR-ERRONEOUS STRIKING OF AMENDMENT TO ANSWER.

1. A fire insurance company may, in defense to an action against it by one for whose benefit a "mortgage clause" was attached to and made a part of the policy declared upon, set up the fact that the plaintiff violated a stipulation contained in such clause, noncompliance with which on his part rendered the policy void as to him.

2. When such a "mortgage clause" in effect stipulated that the policy should be rendered void by any change in the title or ownership of the property therein described unless the creditor named in such clause, in case he obtained knowledge of such a change, should notify the insurance company thereof, then if the insured, before taking out the policy, had conveyed the property to this creditor for the sole purpose of securing a debt, and after the issuance of the policy conveyed the property absolutely to another, and the creditor, though he had knowledge of the latter conveyance, failed to notify the company thereof, the policy was, as to him, void.

3. As the court erroneously struck an amendment to the defendant's answer which had been allowed, and which set up a good defense to the action, all which subsequently occurred at the trial was nugatory.

(Syllabus by the Court.)

Error from superior court, Ware county; J. L. Sweat, Judge.

Action by J. A. Anderson and others, as receivers, against the Continental Insurance Company. From a judgment for plaintiffs, defendant brings error. Reversed.

L. A. Wilson and Spencer R. Atkinson, for plaintiff in error.

Hitch & Myers, for defendants in error.

LITTLE, J. The following statement sufficiently sets forth all the facts material to an understanding of the rulings made in this case: In June, 1895, the Continental Insurance Company issued a policy to H. A. Cannon, insuring "his" dwelling house against loss by fire for a term of three years. This policy, among other things, stipulated that it was to be void "if any change, other than by the death of an insured, take place in tbe interest, title, or possession of the subject of the insurance (except change of occupancy without change of hazard)." Before the issuance of this policy, H. A. Cannon had conveyed the property therein described to the Southern Mutual Building & Loan Association to secure a debt due by him to it. Attached to the policy, and forming a part thereof, was a clause known as the "New York Standard Mortgage Clause, " which stipulated that "lossor damage, if any, under this policy, shall be payable to" this association "as its mortgagee (trustee) interest may appear, " and that "the insurance, as to the mortgagee (or trustee) only therein, shall not be invalidated by * * * any change in the title or ownership of the property: * * * provided, * * * that the mortgagee (or trustee) shall notify this company of any change of ownership or occupancy * * * which shall come to the knowledge of said mortgagee (or trustee); * * * otherwise, this policy shall be null and void." On May 26, 1S97, the property insured was destroyed by fire, and the receivers of the building and loan association brought an action against the insurance company for the amount of the policy, and also for damages and attorney's fees. After one of the paragraphs of the defendant's answer had been stricken on demurrer, the court allowed it to file an amendment to its answer. It was as follows: "And now comes the defendant in the above-stated case, and by leave of the...