Federal Land Bank of Columbia v. Globe & Rutgers Fire Ins. Co.

• Decision Date: 22 January 1924
• Docket Number: 545.
• Parties: FEDERAL LAND BANK OF COLUMBIA ET AL. v. GLOBE & RUTGERS FIRE INS. CO.
• Court: North Carolina Supreme Court

121 S.E. 37

187 N.C. 97

FEDERAL LAND BANK OF COLUMBIA ET AL. v. GLOBE & RUTGERS FIRE INS. CO.

No. 545.

Supreme Court of North Carolina

January 22, 1924

Appeal from Superior Court, Buncombe County; Lane, Judge.

Action by the Federal Land Bank of Columbia and others against the Globe & Rutgers Fire Insurance Company. Judgment of nonsuit was entered against plaintiffs Joe M. Burlison and C. C Greenwood, and judgment entered for plaintiff named, and from the latter judgment defendant appeals. New trial.

Civil action to recover for loss by fire under a policy of insurance issued by the defendant. From a verdict and judgment in favor of the Federal Land Bank of Columbia, the defendant appeals, assigning errors.

Where at the close of plaintiff's evidence, defendant demurred to the evidence and moved for dismissal or for judgment as of nonsuit and renewed the same at the close of all the evidence, the exception noted at the close of all the evidence held the one to be considered on appeal, as the first was waived.

Bourne Parker & Jones, of Asheville, and Ferguson & Vinson, of Greensboro, for appellant.

Mark W. Brown, of Asheville, for appellee.

STACY J.

Defendant relies chiefly upon its demurrer to the evidence and motion for dismissal or for judgment as of nonsuit, made first at the close of plaintiffs' evidence, and renewed at the close of all the evidence. The exception noted at the close of all the evidence is the only one which may be considered on appeal, the first having been waived by the defendant. Harper v. Supply Co., 184 N.C. 204, 114 S.E. 173.

The essential facts, admitted by the parties or sufficiently established on the hearing, are as follows:

(1) Joe M. Burlison owned a tract of land in Buncombe county with certain buildings and improvements erected thereon, including a dwelling house, barn, and other buildings. On July 23, 1918, he executed and delivered to the Federal Land Bank of Columbia a mortgage on said lands and other property, which he then owned, to secure a loan of $4,800. This mortgage, which was duly registered, contained a covenant that the buildings on the lands should be kept insured against loss or damage by fire for the benefit of the mortgagee.

(2) Agreeable with this covenant to keep the buildings insured, Joe M. Burlison, on November 11, 1918, applied to the Globe & Rutgers Fire Insurance Company of New York (defendant herein, and hereafter called the Globe Company) for a policy insuring the buildings against loss or damage by fire in the amount of $1,000 on the dwelling and $750 on the barn. This policy contained a "standard mortgage clause" in favor of the Federal Land Bank of Columbia, as mortgagee or trustee, as its interest might appear; the material portions of said standard mortgage clause being as follows:

"Loss or damage, if any, under this policy, shall be payable to ______ as mortgagee (or trustee), as interest may appear, and this insurance, as to the interest of the mortgagee (or trustee) only herein, shall not be invalidated by any act or neglect of the mortgagor or owner of the within described property, nor by any foreclosure or other proceedings or notice of sale relating to the property, nor by any change in the title or ownership of the property, nor by the occupation of the premises for purposes more hazardous than are permitted by this policy; provided, that in case the mortgagor or owner shall neglect to pay any premium due under this policy, the mortgagee (or trustee) shall, on demand, pay the same. Provided also, that the mortgagee (or trustee) shall notify this company of any change of ownership or occupancy or increase of hazard which shall come to the knowledge of said mortgagee (or trustee) and, unless permitted by this policy, it shall be noted thereon, and the mortgagee (or trustee) shall, on demand, pay the premium for such increased hazard for the term of the use thereof; otherwise this policy shall be null and void.

In case of any other insurance upon the within described property, this company shall not be liable under this policy for a greater portion of any loss or damage sustained than the sum hereby insured bears to the whole amount of insurance on said property, issued to or held by any party or parties having an insurable interest therein, whether as owner, mortgagee or otherwise."

Said policy also carried the following pertinent provisions and stipulations:

A. "This entire policy shall be void, unless otherwise provided by agreement in writing added thereto, (a) if the interest of the insured be other than unconditional and sole ownership, or (b) if the subject of insurance be a building on ground not owned by the insured in fee simple, or (c) if with the knowledge of the insured, foreclosure proceedings be commenced, or notice given of sale of any property insured hereunder, by reason of any mortgage or trust deed, or (d) if any change other than by the death of an insured takes place in the interest, title or possession of the subject of insurance (except change of occupants without increase of hazard) or (e) if this policy be assigned before a loss."

B. "Unless otherwise provided by agreement in writing added hereto, this company shall not be liable for loss or damage occurring, (a) while the insured shall have any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy, or (b) while the hazard is increased by any means within the control or knowledge of the insured."

(3) On August 1, 1919, Joe M. Burlison sold and conveyed all the lands, premises, and buildings, above mentioned, to C. C. Greenwood. No notice of this sale was given to the defendant herein, and the said conveyance was made without its knowledge or consent.

(4) On August 4, 1919, C. C. Greenwood executed a deed of trust, which was duly registered in Buncombe county, conveying the said lands, premises, and buildings to Joseph F. Ford, trustee, for the benefit of Joe M. Burlison, to secure the payment of $5,680.20, due by Greenwood to Burlison. No notice of this conveyance was given to the defendant herein, and the same was made without its knowledge or consent. This deed of trust contained a covenant that C. C. Greenwood should keep the buildings on said premises insured against loss or damage by fire for the benefit of the Federal Land Bank of Columbia and the trustee mentioned in said deed of trust.

(5) On September 14, 1920, C. C. Greenwood made and executed a deed of assignment (which was not registered) conveying to L. L. Jenkins all his right, title, and interest in and to the lands, premises, and buildings aforementioned. No notice of this deed of assignment was given to the defendant herein, and the same was made without its knowledge or consent.

(6) The Federal Land Bank of Columbia had no knowledge or information of the several conveyances above mentioned in paragraphs 3, 4, and 5 until after the buildings were destroyed by fire.

(7) Agreeable with his covenant to keep the buildings on said premises insured for the benefit of the Federal Land Bank of Columbia, trustee under the mortgage mentioned in paragraph 1, and Joseph F. Ford, trustee under the deed of trust mentioned in paragraph 4 above, C. C. Greenwood on December 8, 1920, applied to the Atlas Assurance Company (hereafter called the Atlas Company) for a policy insuring said buildings against loss or damage by fire in the amount of $4,000 on the dwelling, $800 on the barn, and $200 on a smokehouse. No notice of this application, or of the issuance of the policy of insurance, was given to the Federal Land Bank of Columbia, or to the defendant herein, and the said application was made and policy of insurance obtained without the knowledge or consent of the Federal Land Bank of Columbia, or of the Globe Company. This policy also contained a "standard mortgage clause," identical in general terms with the one above set out.

(8) On January 10, 1921, all the buildings on said premises, including these covered by the policies above mentioned, were totally destroyed by fire.

(9) On December 31, 1921, the Federal Land Bank of Columbia, Joe M. Burlison, and C. C. Greenwood, plaintiffs herein, instituted this action against the Globe Company; and, at the same time, the Federal Land Bank of Columbia, the Citizens' Bank of Yancey, Joseph F. Ford, trustee, and C. C. Greenwood, with full knowledge of the foregoing facts (except possibly the deed of assignment from Greenwood to Jenkins was not known to all), instituted an action against the Atlas Company to recover upon the policy issued by that company on December 8, 1920. These two suits were instituted simultaneously at the suggestion of general counsel for the two insurance companies, though not by counsel now appearing for the present defendant, to the end that the rights of all the parties might be brought before the court for adjudication and settlement.

(10) The action against the Atlas Company was tried at the June term, 1923, Buncombe superior court, and by consent an issue was submitted to the jury to ascertain the value of the property destroyed after the court had intimated that a judgment of nonsuit would be entered. From a judgment of nonsuit in the action against the Atlas Company, the plaintiffs therein have appealed.

(11) In the case at bar, tried also at the June term, 1923, it was agreed that the value of the buildings destroyed, and covered by the policy in suit, should be fixed by the judge in accordance with the finding of the jury in the Atlas case, and that the remaining issues should be answered by the court.

(12) At the close of all the evidence, judgment of nonsuit was entered against the plaintiffs, Joe M. Burlison and C. C. Greenwood, and judgment was entered...