Farmers' & Merchants' Bank v. Hartford Fire Ins. Co.

• Decision Date: 22 June 1926
• Citation: 253 P. 379,43 Idaho 222
• Court: Idaho Supreme Court
• Parties: FARMERS & MERCHANT'S BANK, a Corporation, Respondent, v. HARTFORD FIRE INSURANCE CO., a Corporation, Appellant

253 P. 379

43 Idaho 222

FARMERS & MERCHANT'S BANK, a Corporation, Respondent, v. HARTFORD FIRE INSURANCE CO., a Corporation, Appellant

Supreme Court of Idaho

June 22, 1926

MOTION FOR NEW TRIAL-AFFIDAVITS NOT FILED IN TIME-CROP INSURANCE-CHANGE OF OWNERSHIP OF LAND - EFFECT - PROOF OF LOSS WAIVED-INSURABLE INTEREST-RIGHTS OF MORTGAGEE.

1.In view of C. S., sec. 6890, there is no authority for considering, in connection with motion for new trial affidavits filed by movant more than ten days after service of notice of motion for new trial, no extension of time for service appearing and no extenuating circumstances being shown.

2.Under C. S., sec. 6890, where neither notice of motion nor motion for new trial specified that motion would be made on affidavits, they may not properly be filed and considered.

3.Insurer is not relieved from liability under policy, insuring against damage to crop from the elements, by insured, who held the land on contract for purchase, making assignments whereby he parted with all right and interest in the property to the vendors, the policy placing no restraint on alienation of the land, and not making recovery dependent on ownership or possession of the premises by insured at time of loss.

4.There was no "abandonment" of insured crop, within policy thereon, by insured merely alienating the land, the crop being properly protected and harvested.

5.Where insurer's manager having general supervision of the class of insurance in question, after acknowledging receipt of claims of loss, said the company would consider insured had complied with the policy conditions, and that it would not be necessary to furnish further data concerning the claim, there was a waiver of furnishing further proof of loss, notwithstanding provision in policy against waiver by statement of agent, adjuster or other representative of company.

6.Mortgagee under loss payable clause in insurance policy may recover for itself to extent of its mortgage debt and hold the surplus for benefit of insured.

7.Insured owners of crop being indorsers of note to bank secured by mortgage on crop, retained an insurable interest in the crop, measured by the extent of their liability on the mortgage, after assigning their contract for purchase of the land and releasing their interest in the insured crop.

8.Under loss payable clause in insurance policy, mortgagee is appointee of insured, with right to recover measured by that of insured.

APPEAL from the District Court of the Ninth Judicial District, for Madison County.Hon. G. W. Edgington, Judge.

Action on insurance policy.Judgment for plaintiff.Affirmed.

Judgment affirmed.Costs to respondent.

Miller & Ricks, for Appellant.

Where a stipulation in a policy merely constitutes the mortgagee an appointee to receive the proceeds for and on account of the insured, subject to compliance by the insured, with the conditions essential to recovery by him, if by reason of noncompliance with such conditions the insured cannot recover, the mortgagee cannot do so. (Warbasse v. Sussex County Mut. Ins. Co.,42 N.J.L. 203;Grosvenor v Atlantic Fire Ins. Co.,17 N.Y. 391;Hamburg-Bremen Fire Ins. Co. v. Ruddell,37 Tex. Civ. App. 30, 82 S.W 826;Longfellow v. National Fire Ins. Co.,102 Kan. 473, 170 P. 813;14 R. C. L. 1037, and note 11;Stockton Nat. Bank v. Home Ins. Co.,106 Kan. 789, 189 P. 913, 11 A. L. R. 1304;Southern States Fire & Casualty Co. v. Napier,22 Ga.App. 361, 96 S.E. 15;New Brunswick Fire Ins. Co. v. Morris Plan Bank,136 Va. 402, 118 S.E. 236;Fidelity Phenix Fire Ins. Co. v. Cleveland, 57 Okla. 237, 156 P. 638.)

The respondent, in order to recover, must have an insurable interest in the crop of wheat, both at the time of the insurance and at the time of the loss.(Note, 52 L. R. A. 332;Chrisman v. State Ins. Co.,16 Ore. 283, 18 P. 466.)

The transfer or sale of the grain by Barnhart and White to Maughan, more than one month prior to the time of the claim of loss by the respondent, avoided the policy, because the continued validity of the policy depended upon the performance by Barnhart and White of the conditions embraced therein.(Note, 18 L. R. A., N. S., 199 et seq.)

H. W. Soule and Soule & Spalding, for Respondent.

Taking steps for adjustment waives proof of loss.(Condon v. Des Moines Mont. Hail Assn.,120 Iowa 80, 94 N.W. 477;Aetna Ins. Co. v. Simmons,49 Neb. 811, 69 N.W. 125;Cushing v. Williamsburg City Fire Ins. Co., 4 Wash. 538, 30 P. 736.)

Agent entrusted to adjust loss has power to waive notice and proof.(Lake v. Farmers Ins. Co.,110 Iowa 473, 81 N.W. 710;Gristock v. Royal Ins. Co.,84 Mich. 161, 47 N.W. 549;Allen v. Phoenix Assur. Co.,12 Idaho 653, 10 Ann. Cas. 328, 88 P. 245, 95 P. 829, 8 L. R. A., N. S., 903.)

Stipulations of the policy requiring notice and proofs of loss and prescribing the form and requisites thereof are expressly waived, either wholly or in part, where the company, through an authorized officer or agent, gives insured a direct and explicit assurance that all or some of them need not be complied with or that he has sufficiently complied with them.(Ramirez v. United Firemen's Ins. Co.,46 Cal.App. 451, 189 P. 309;Hartford Fire Ins. Co. v. Landfare,63 Neb. 559, 88 N.W. 779.)Mortgagee is entitled to benefit of waiver even though waiver is made only with reference to mortgagor.(State Ins. Co. v. Ketcham,9 Kan. App. 552, 58 P. 229;Nickerson v. Nickerson, 80 Me. 100, 12 A. 880.)

A surety for the payment of a debt for which property is also held as security has an insurable interest in the property.(Hartford Fire Ins. Co. v. Keating,86 Md. 130, 63 Am. St. 499, 38 A. 29;Caley v. Hoopes,86 Pa. 493;Hanover Fire Ins. Co. v. Bohn,48 Neb. 743, 58 Am. St. 719, 67 N.W. 774;Mahoney v. State Ins. Co.,133 Iowa 570, 110 N.W. 1041.)

It was the bank's duty to pursue its remedy against the insurance company to the end.(Rein v. Callaway,7 Idaho 634, 65 P. 63.)

Where the insurance exceeds the mortgage debt the mortgagee may sue alone for his interest and as trustee for the mortgagor as to the excess.(Cone v. Niagara Fire Ins. Co.,60 N.Y. 619;Clinton v. Hope Ins. Co.,45 N.Y. 454;Kent v. Aetna Ins. Co.,84 A.D. 428, 82 N.Y.S. 817;Georgia Home Ins. Co. v. Leaveston(Tex. Civ. App.), 33 S.W. 579.)

The courts of this state have never allowed technical objections to prevail over a valid insurance contract, nor favored a forfeiture of the policy where the construction to be given to a contract is doubtful.(McKune v. Continental Casualty Co.,28 Idaho 22, 154 P. 990;Douville v. Pacific Coast Casualty Co.,25 Idaho 396, Ann. Cas. 1917A, 112, 138 P. 506.)

BUDGE, J., WM.E. LEE, C. J. William A. Lee, C. J., Wm.E. Lee, Givens, JJ., Budge, Taylor and T. Bailey Lee, JJ., concurring.

OPINION

BUDGE, J.

Respondent bank brought this action to recover under an insurance policy issued by appellant insurance company upon a certain crop of grain.For convenience the respondent will hereinafter be referred to as the bank and appellant as the company.

In June, 1920, one Maughan owned a tract of land near Rexburg and contracted to sell the same to parties named Barnhart and White, who went into immediate possession thereof.At the time the contract was entered into Maughan was indebted to the bank in the sum of $ 2,475 upon two promissory notes which were secured by crop mortgage, and Barnhart and White agreed to assume the obligations of Maughan to the bank and accordingly indorsed the notes.In order to protect its interest in the crops then growing on the land, the bank was desirous of having the same insured against drought, and, under an arrangement it had with the local agent of the company, wrote up an application for insurance which was signed by Barnhart and White and upon which a policy was in due course issued by the company.

The policy insured the persons named in the application against loss or damage to the crops described when caused by the elements, including drought, in the sum of $ 3,040, the loss, if any, to be payable to the bank, mortgagee, as its interest might appear.The terms of the policy made the written application a part thereof.Other pertinent terms and conditions of the policy were as follows:

That any indorsements, assignments or changes in it without the consent of the company indorsed thereon should render the entire policy null and void; that the company was not to be liable thereunder for failure on the part of the assured to harvest the crops insured; that in every case where loss or damage occurred within the provisions of the policy the assured should, within ten days after such loss or damage occurred or became apparent, send by registered mail to the company at San Francisco notice of such loss or damage; that in the event of loss or damage to the crops from any cause within the coverage of the policy which would warrant their abandonment without further effort or expense on the part of the assured to cultivate, protect and harvest the same, the assured might elect to reseed the land to other crops, but should furnish the company certain designated information concerning such intention within ten days after such loss or damage occurred or became apparent; that if at the time of threshing, the assured claimed loss or damage to the crops there should be sent to the company within five days after such grain had been threshed a sworn statement giving certain date with respect to the amount and kind of grain threshed, the market value thereof, etc.; that a statement of proof of loss should be furnished the company within thirty days after the happening or ascertainment of any loss,--failure to notify the company of loss and to furnish proof thereof as prescribed to render...