Ford v. Iowa State Insurance Co. (Mutual

• Decision Date: 16 September 1927
• Docket Number: 25795
• Parties: George W. Ford, Receiver of Ray M. Fouts and C. O. Dooley, Composing Firm of Dooley & Fouts, Phoenix Trust Company, Metropolitan Life Insurance Company, Glenn W. Ford, and Allen Rolston and Arthur J. Rolston, Composing Firm of Rolston & Rolston, v. Iowa State Insurance Company (Mutual), Appellant
• Court: Missouri Supreme Court

298 S.W. 741

317 Mo. 1144

George W. Ford, Receiver of Ray M. Fouts and C. O. Dooley, Composing Firm of Dooley & Fouts, Phoenix Trust Company, Metropolitan Life Insurance Company, Glenn W. Ford, and Allen Rolston and Arthur J. Rolston, Composing Firm of Rolston & Rolston, v. Iowa State Insurance Company (Mutual), Appellant

No. 25795

Supreme Court of Missouri

September 16, 1927

Motion for Rehearing Overruled October 10, 1927.

Appeal from Adair Circuit Court; Hon. James A. Cooley Judge.

Reversed.

Hazen I. Sawyer, J. M. Campbell and M. D. Campbell for appellant.

(1) The policy sued upon is the standard form. The loss-payable clause attached thereto provides that subject to the stipulations, provisions and conditions contained in this policy, the loss, if any, is payable to the mortgagee or assigns as interest may appear. That policy was issued to the owners of the property. It is admitted that the assured wilfully and feloniously and with the intent to swindle and defraud burned the property. It was also admitted in the trial court that the assured could not recover. The mortgagee, under the loss-payable clause had no other or greater right than the assured. Hocking v. Ins. Co., 42 S.W. 451; Hill v. International Ins. Co., 116 Kan. 109; Delaware Ins. Co. v. Green, 120 F. 916; Gillett v. Company, 41 N.W. 78; Kabrich v. State Ins. Co., 48 Mo.App. 393; Inland Finance Co. v. Home Ins. Co., 236 P. 73; Lewis v. Company, 74 N.E 224; Hamburg-Bremen F. Ins. Co. v. Ruddell, 82 S.W 826; Union Building Assn. v. Rockford Ins. Co., 83 Iowa 647. (2) The parties agreed that the assured under the stipulated facts could not recover. The rights of the mortgagee were the same as that of the assured, and if the assured could not recover the mortgagee could not. Authorities above.

George F. Heindel, Charles E. Murrell, and Rolston & Rolston for respondents.

(1) The policy sued upon is not like the standard form mentioned in the cases cited in appellant's brief, but contains a clause to the effect, that, if with the consent of this company, an interest under this policy shall exist in favor of mortgagees, then the conditions contained in such policy shall apply to the mortgagees in the manner expressed in the mortgage or loss-payable clause, or such other endorsements as might be attached to the policy. The loss-payable clause only provides that subject to the stipulations, provisions and conditions contained in this policy, the loss, if any, is payable to the mortgagee as interest may appear. Both the policy and loss-payable clause are wholly silent as to the manner in which the provisions in such policy shall apply to the mortgagees, and so being silent as to the manner in which "the conditions hereinbefore contained" shall apply, they do not apply to the mortgagees at all. Senor and Muntz v. Western Millers' Mutual Fire Ins. Co., 181 Mo. 104; Trust Co. v. Phoenix Ins. Co., 201 Mo.App. 223; Mark Twain Savings Assn. v. Continental Ins. Co., 247 S.W. 215; Burns v. Ins. Co., 224 S.W. 96; Burns v. Ohio Farmers Ins. Co., 224 S.W. 98; Oakland Home Ins. Co. v. Bank, 66 N.W. 646, 47 Neb. 717; Baker v. Liverpool & London Ins. Co., 275 S.W. 316; Christianson v. Fidelity Ins. Co., 117 Iowa 77; Boyd v. Ins. Co., 55 L. R. A. 165. (2) The execution and attaching of the loss-payable clause to the policy created a new contract between the insurance company (appellant herein) and mortgagees (respondents herein), and made the mortgagees the insured so far as their interests exist, and thereafter, and as to such interests, the mortgagees were, and are, the insured. Trust Co. v. Phoenix Ins. Co., 201 Mo.App. 236; Oakland Home Ins. Co. v. Bank, 66 N.W. 646, 47 Neb. 717; Baker v. Liverpool & London Ins. Co., 275 S.W. 318. (3) The provision, "Subject to the stipulations, provisions and conditions contained in this policy," set forth in the loss-payable clause, do not carry the conditions of the policy into the loss-payable clause, nor make such conditions applicable to the mortgagees. Baker v. Liverpool & London Ins. Co., 275 S.W. 316. (4) It is an established rule of construction, that, where the language of the insurance contract is capable of two interpretations, the one must be adopted which is most favorable to the insured, because the language used is that of the insurer, and when repugnant or inconsistent statements or clauses appear in a policy, that statement or clause will be given effect which is the most favorable to the insured. Drucker v. Indemnity Co., 204 Mo.App. 204; Oakland Home Ins. Co. v. Bank, 66 N.W. 646, 47 Neb. 717; Senor and Muntz v. Ins. Co., 181 Mo. 104.

Atwood, J. All concur, except Gantt, J., not sitting.

OPINION

ATWOOD

This is an action upon a fire insurance policy tried to the court without a jury upon an agreed statement of facts and resulting in a judgment in favor of certain of the above respondents in the sum of $ 8,721.25. Motion for a new trial was timely filed and overruled, and defendant appealed.

Plaintiff's petition alleged that on and prior to April 10, 1920, Ray M. Fouts and C. O. Dooley were partners doing business under the firm name of Dooley & Fouts, and the owners of certain lands in Schuyler County; that prior to said 10th day of April, 1920, the said Ray M. Fouts and C. O. Dooley executed a deed of trust conveying said land to secure the payment of their note given to the Phoenix Trust Company in the principal sum of $ 19,000; that prior to said 10th day of April, 1920, they executed their second deed of trust on the same land to secure their six promissory notes to said Phoenix Trust Company, each given in the principal sum of $ 1,000; that thereafter all of said notes were sold and assigned to other of the above-named respondents; that in a certain suit in the circuit court wherein Ray M. Fouts was plaintiff and C. O. Dooley was defendant respondent George W. Ford was appointed receiver of all the property and assets of said partnership and thereupon qualified and has since been acting as such; that on or about April 13, 1920, defendant, the appellant herein, executed and delivered its policy of insurance to said Dooley & Fouts for a term of five years from April 10, 1920, in consideration of a premium paid by them, whereby insurance against fire was granted in the sum of $ 7,500 on a building situate on said lands; that on April 27, 1920, defendant attached and made a part of said policy a loss-payable clause in which it is provided that subject to the stipulations, provisions and conditions of the policy, the loss, if any, is payable to Phoenix Trust Company, mortgagee, or assigns as interest may appear; that said policy is attached to and filed with the original petition in this cause; that the building covered by said policy was totally destroyed by fire on April 9, 1921; that proof of loss was duly made within the time and in the manner provided and payment thereof refused.

Defendant's answer admits the issuance of the policy sued on, avers that it is recited in the policy that the same should be void in case of any fraud by the insured touching any matter relating to insurance or the subject thereof, and that the policy should be void if the hazard of said property be increased by any means within the control or knowledge of the insured; that the fire mentioned in plaintiff's petition was wilfully, feloniously and on purpose caused by the said C. O. Dooley, with the felonious and unlawful intent and purpose on his part of creating a false and fraudulent claim of liability on said policy, and with the felonious intent and purpose on his part to swindle and cheat the defendant.

The following facts were agreed upon by the parties:

"1. That Ray M. Fouts and C. O. Dooley were partners and that the plaintiff, George W. Ford, is the duly appointed receiver of the firm of Dooley & Fouts, and as such is empowered to bring and maintain actions, all as set forth in plaintiffs' petition.

"That the Phoenix Trust Company is a corporation as charged in said petition, and is the payee, assignor and holder of the notes and deed of trust as alleged in said petition.

"That the Metropolitan Life Insurance Company is a corporation as charged in said petition, and is the holder in due course of the $ 19,000-note and deed of trust securing the same, as set forth in said petition.

"That Allen J. Rolston and Arthur J. Rolston are partners as alleged in said petition, and that they and said Glen W. Ford are the owners in due course of the notes as therein alleged.

"2. That said firm of Dooley & Fouts was the owner of the real estate and executed the notes and deeds of trust as set forth in said petition, and that such notes were assigned and are now held as set forth in said petition.

"3. That the defendant is a corporation, and executed the policy of insurance and the stipulations thereto attached which is attached hereto and a part hereof.

"4. That the building insured was of the value set forth in said petition, and that such dwelling house was totally destroyed by fire on the 8th day of April, 1921. That plaintiffs performed all conditions required of them by law and by such policy, relating to giving notice and furnished the proof of loss as therein stated.

"5. That none of the insurance provided for in said policy has been paid, although plaintiffs demanded such payment prior to the bringing of this action.

"6. That said policy of insurance contains the provisions set forth in defendant's answer and that C. O. Dooley wilfully, feloniously and on purpose caused the fire mentioned in plaintiffs' petition, with the unlawful and felonious intent and purpose on his part to cheat, swindle and defraud.

"7. That such policy of insurance, with all endorsements thereon is to be offered and read in evidence as though...