Delaware Ins. Co. v. Security Co.

• Decision Date: 17 January 1900
• Citation: 54 S.W. 916
• Parties: DELAWARE INS. CO. et al. v. SECURITY CO.
• Court: Texas Court of Appeals

54 S.W. 916

DELAWARE INS. CO. et al. v. SECURITY CO.

Court of Civil Appeals of Texas.

January 17, 1900.

Appeal from district court, Travis county; F. G. Morris, Judge.

Action by the Security Company against the Delaware Insurance Company and others. From a judgment for plaintiff, defendants appeal. Reversed.

West & Cochran and R. E. Huff, for appellants. Ashby S. James, for appellee.

FISHER, C. J.

This is an action by the Security Company against the Pan Handle National Bank to recover the proceeds of two insurance policies paid to the bank by the insurance companies, and now in its possession. The Security Company, in effect, alleged that it was entitled to the funds by reason of the fact that the property covered by the policies, the Wichita Roller Mills, was insured for its benefit, as its interests might appear; that the property was destroyed by fire, and the policies collected by the Pan Handle National Bank. The Security Company alleged that the bank fraudulently changed the policies so as to read, "Payable to the Pan Handle National Bank, as its interests may appear." It was also alleged that the Security Company owned a bond, or mortgage, or deed of trust against the property destroyed by fire for a greater sum than the amount of the policies in controversy. The court below found in favor of the Security Company.

On August 20, 1894, the two policies in controversy, for $1,000 each, were issued by the insurance companies in favor of the Pan Handle National Bank, upon the property described as the "Wichita Roller Mills," which policies were made payable to the appellee, the Security Company, of Hartford, Conn., as its interests might appear; and below this indorsement is another, which was made September 11, 1894, to the effect: "Canceled indorsement September 11th, 1894. Loss, if any, payable to the Pan Handle National Bank, as its interests may appear,"—signed by Stone, Van Dyke & Co., agents. Plaintiff offered in evidence a bond styled "Real-Estate Mortgage Bond," for $7,000, dated May 1, 1891, executed by the Wichita Roller-Mills Company, wherein that company obligated itself that on May 1, 1896, it would pay to the order of the Pan Handle Loan & Trust Company, at the Pan Handle National Bank at Wichita Falls, Tex., $7,000, with certain amount of interest, etc. This instrument was indorsed and transferred by the Pan Handle Loan & Trust Company to the appellee, the Security Company, of Hartford, Conn., and guarantied the prompt payment of principal and interest, etc. This bond was transferred to the appellee at its home office at Hartford, Conn. Plaintiff next offered in evidence a judgment of the district court of Wichita county, rendered on the 16th of June, 1894, in favor of the Security Company against the Wichita Roller-Mills Company, the Pan Handle Loan & Trust Company, and one D. J. Colkins, and with a foreclosure of lien on the milling property. Thereafter, on the 13th of August, 1894, the appellant the Pan Handle National Bank and the appellee, within the state of Texas, entered into the agreements and transactions hereinafter set out, and upon which this suit was brought, in order to show the interest of the appellee, as a creditor, in the fund covered by the policies in controversy. In one of the agreements between the appellant and the appellee it is stated that the Security Company had obtained a judgment in the district court of Wichita county against the Wichita Roller-Mills Company for the sum of $8,806, and with foreclosure on the milling property known as the "Wichita Roller Mills," on which property the Pan Handle National Bank had a second mortgage lien; and desiring to prevent a foreclosure of the appellee's mortgage lien, and having the time of payment of the money extended, it was agreed that, if the Pan Handle National Bank would pay or cause to be paid all of the judgment in excess of the sum of $7,000, and would cause the $7,000 to be assumed by a corporation organized hereafter for milling purposes, and secured by a first lien on the premises above described, then the Security Company agreed to allow said $7,000 to be renewed for the term of five years from May 1, 1896; and that the Pan Handle National Bank agreed to release its second mortgage lien, or waive it, so that the notes executed by said new milling company should be a first lien, and would pay or cause to be paid all of said judgment except the sum of $7,000, as aforesaid. It was further agreed to pay $900 as commission to an agent named in the agreement for procuring the extension. The plaintiff next offered in evidence a mortgage bond for $7,000, of date September 1, 1894, executed by the Wichita Falls Milling Company, payable to the appellee, a corporation duly chartered under the laws of Connecticut, at its office at...