Franklin Ins. Co. v. Wolff

• Decision Date: 06 October 1899
• Citation: 54 N.E. 772,23 Ind.App. 549
• Parties: FRANKLIN INS. CO. v. WOLFF.
• Court: Indiana Appellate Court

23 Ind.App. 549

54 N.E. 772

FRANKLIN INS. CO.

v.WOLFF.¹

Appellate Court of Indiana.

Oct. 6, 1899.

Appeal from superior court, Laporte county; J. Kopelke, Special Judge.

Action by Charles Wolff against the Franklin Insurance Company. There was a judgment for plaintiff, and defendant appeals. Reversed.James F. Gallaher, for appellant. C. R. & J. B. Collins, for appellee.

ROBINSON, J.

Appellant issued a fire policy on certain property to Harry B. Tuthill, who afterwards conveyed it to one Haney, and indorsed the policy to him. Haney then mortgaged the property to appellee, and, with appellant's consent, the policy was made payable to appellee in case of loss. The property burned, and the mortgagee (appellee) sued, making appellant and the mortgagor defendants. The two paragraphs of complaint are alike except one avers that proof of loss was made, and the other that it was waived by appellant's denying liability. The first question presented is whether the mortgagee may sue. From the complaint it appears that the mortgage debt then owing exceeds the amount named in the policy. It thus appears that the mortgagee is entitled to receive the benefits of the suit, and that he is the real party in interest, and, as such, the suit may be prosecuted in his own name. Burns' Rev. St. 1894, § 251. In Insurance Co. v. Gilman, 112 Ind. 7, 13 N. E. 118, the owner of the property and mortgagee joined in a suit for a fire loss. The amount of the loss exceeded the mortgage debt. In holding that they might join in the action the court said: “It was the interest of each that the other should recover as well as that he should recover himself. A recovery by the mortgagee inured to the benefit of his co-plaintiff, in that it established a common right. The amount recovered by the mortgagee went in liquidation of the mortgagor's debt, while a recovery by the latter had a like effect upon the common right, and entitled the former to receive payment out of the sum recovered as his interest in the fund might appear. Each was, therefore, interested in the relief sought by the other, and, as both appeared upon the face of the policy to have a common interest, neither being entitled to the whole fund, it was proper for the protection of the defendant that both should be parties. ‘It was not so material whether they were plaintiffs or defendants, so that their rights under the contract would be barred by the event of the suit.”’ In the case at bar the insurer had contracted with the insured, and, upon certain contingencies, agreed to pay the loss to a third person. We see no reason for denying him the right to maintain an action on such promise in his own name, when he shows he is entitled to recover the full amount of insurance. His debt exceeds the amount of insurance. Nothing is due the insured. The insured is a necessary party, but, under the facts pleaded, it is not material whether he is joined as plaintiff or made a defendant. He is made a party to answer as to his interest, and whatever rights he may have will be barred by the event of the suit. See Hammell v. Insurance Co., 50 Wis. 240, 6 N. W. 805;Maxcy v. Insurance Co., 54 Minn. 272, 55 N. W. 1130;Bartlett v. Insurance Co., 77 Iowa, 86, 41 N. W. 579;Tilley v. Insurance Co., 86 Va. 811, 11 S. E. 120;Motley v. Insurance Co., 29 Me. 337; May, Ins. § 449; Ostr. Ins. (2d Ed.) p. 355; Beach, Ins. § 1285; Joyce, Ins. § 3612; 1 Jones, Mortg. § 408. It is clear that in the case at bar the owner and the mortgagee could have joined as plaintiffs. Appellant has not shown in what way it has been harmed, or could be harmed, by permitting the mortgagee to sue alone, making the owner a defendant. A party asking a reversal must show the ruling to have been such as was or might have been harmful to him. Railway Co. v. Lange, 13 Ind. App. 337, 41 N. E. 609. In the case of Insurance Co. v. Baker, 71 Ind. 102, Baker owned the property insured, on which was a mortgage to Ellsworth, who procured a policy of insurance on her interest as mortgagee, loss payable to her. It was shown by the facts that Baker was the equitable assignee of the policy, and as such it was held the suit was properly prosecuted in his name. There is no error in overruling the demurrer to the complaint.

The defendant Haney answered, admitting the facts averred in the complaint to be true, and disclaiming any interest in the policy sued on. Appellant company answered in denial and special answers in a second and third paragraph. The second paragraph pleaded subsequent additional insurance by Haney without appellant's consent, and a tender of premium paid appellant. The third paragraph alleged that when the policy was issued to Tuthill he did not own the property in fee, nor was he such owner when he assigned the policy to Haney, nor did Haney, when the policy was assigned, nor when the mortgage was given, own the property in fee, of which facts appellant had no knowledge; also pleading a tender of the premium paid. To these answers the following demurrer was filed: “The plaintiff demurs to the second and third paragraphs of the defendant's, the Franklin Insurance Company's, answer, on the ground that the said paragraphs do not state facts sufficient to constitute a defense to plaintiff's complaint.” This demurrer was sustained as to the second and overruled as to the third paragraph. The demurrer is a joint demurrer. Gilmore v. Ward (Ind. App.) 52 N. E. 810;Stanford v. Davis, 54 Ind. 45;Meyer v. Bohlfing, 44 Ind. 238;Washington v. Bonney, 45 Ind. 77;Cooper v. Hayes, 96 Ind. 386. It is argued that the error assigned on this ruling that “the court erred in sustaining appellee's demurrerto the second paragraph of the answer of this appellant” presents no question. The assignment corresponds with the ruling. The court ruled as though the demurrer was several, and it is on this ruling the error is predicated. In Colles v. Railway Co. (Ind. App.) 53 N. E. 256, a joint demurrer, addressed to a third and fourth paragraph of answer, was overruled, and it was held that no question was presented by an assignment of error that “the court erred in overruling appellant's demurrer to the third paragraph of appellee's answer,” and that “the court erred in overruling appellant's demurrer to the fourth paragraph of the appellee's answer.” The reason given is that the court made no such ruling as was assigned as error. The ruling was joint, and the error assigned must correspond. But in the case at bar the ruling was several, and on this the error must be predicated. The demurrer being joint, the answers must all stand or fall together.

It is insisted by appellant that both answers are good. The policy contained the provision that “this entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the insured now has or shall hereafter make or procure any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy.” The second paragraph pleads a violation of the condition by Haney, to whom the policy was assigned by Tuthill, and by whom the mortgage was given to appellee. It is argued by appellant that, if Haney had sued in his own behalf, this answer would prevent his recovery, and that appellee occupies no better position than Haney would. It is well settled that a contract of insurance is personal, and does not run with the property insured. The insurer agrees to indemnify the person insured against the loss of his property by fire. Nordyke & Marmon Co. v. Gery, 112 Ind. 535, 23 N. E. 683. In Insurance Co. v. Munns, 120 Ind. 30, 22 N. E. 78, the court said: “It is abundantly settled that upon a sale and transfer of property covered by a policy of insurance, and an assignment of the policy to the purchaser, duly assented to by the company, a new and original contract of indemnity arises between the insurance company and the assignee, which the latter may enforce without regard to what may have occurred prior to the assignment. The policy, it is said, in such a case, expires with the transfer of the estate, so far as it relates to the original holder, but the assignment and assent of the company thereto constitute an independent contract with the purchaser and assignee, the same, in effect, as if the policy had been reissued to him upon the terms and conditions therein expressed.” The reason underlying the above well-settled rule is that the assignor, upon the assignment, entirely ceases to be a party to the contract. He has disposed of all his interest. The company can be liable...