Funk v. Anchor Fire Ins. Co.

• Decision Date: 24 September 1915
• Docket Number: No. 30113.,30113.
• Citation: 171 Iowa 331,153 N.W. 1048
• Parties: FUNK v. ANCHOR FIRE INS. CO.
• Court: Iowa Supreme Court

171 Iowa 331

153 N.W. 1048

FUNK

v.ANCHOR FIRE INS. CO.

No. 30113.

Supreme Court of Iowa.

Sept. 24, 1915.

Appeal from District Court, Muscatine County; A. P. Barker, Judge.

Action by mortgagee on a policy issued to mortgagor and made payable to mortgagee as her interest might appear. Judgment and decree in the court below for the plaintiff. Defendant appeals. Affirmed.Sullivan & Sullivan, of Des Moines, for appellant.

E. M. Warner and E. F. Richman, both of Muscatine, for appellee.

GAYNOR, J.

This action is brought by the plaintiff against the defendant company upon a certain policy of insurance, issued on the 28th day of November, 1904, in which defendant company undertook to and did insure, by the terms of the policy, the premises in controversy against loss by fire for the term of five years. The plaintiff bases her right to recover from the company upon the following facts, which were not disputed in this record:

On the 3d day of June, 1905, she loaned to one Lulu R. Henning $550, and took a mortgage upon the premises insured to secure the loan. At the time the loan was made by the plaintiff to Mrs. Henning, the policy in controversy was delivered to the plaintiff by one H. H. Arnold, with the following indorsement upon it:

“Permission is granted for incumbrance upon the real property insured in this policy not to exceed the principal sum of $550.00, and loss, if any, is made payable first to Kate D. Funk, of Muscatine, Iowa, mortgagee (or trustee), as her interests may appear, subject to the conditions of this policy.

Attached to and made a part of policy No. 49832, of the Anchor Fire Insurance Company, of Des Moines, Iowa, this 28th day of November.

[Signed] H. H. Arnold, Agent.”

The property covered by said policy and by said mortgage was totally destroyed by fire on the 9th day of February, 1908. Due notice of loss was given as required by the terms of the policy.

The defendant interposes certain defenses to plaintiff's right to recover:

(1) That the policy in question was issued to W. F. Henning, who stated that he was the unconditional and sole owner of the property, and that the defendant had no knowledge that he was not the owner until long after the destruction of the property by fire. That he was not in fact the owner at the time the policy was issued. That the property was owned by his wife, Lulu R. Henning. That W. F. Henning wrongfully and fraudulently concealed this fact from the defendant. That the policy provided by its terms:

“This policy shall be void * * * if the interest of the insured be other than unconditional and sole owner.”

That the said W. F. Henning was not the sole and unconditional owner of the premises at the time the policy was issued, nor at the time the loss occurred, and that, by reason thereof, the policy was not in force at the date of the destruction by fire.

(2) The defendant alleges, as a complete defense to plaintiff's claim, that the contract of insurance further provided:

“Or if any change, other than by death of the insured, whether by legal process, judgment, voluntary act of the insured, or otherwise, take place in the possession, or in the interest or title of the insured, in or to the property covered by the policy, * * * or if, with the knowledge of the insured, foreclosure proceedings be commenced, or notice given of the sale of any property of this policy by virtue of any lien or incumbrance thereon, this policy shall be void.”

That after the issuance of the policy, and before the destruction of the property by fire, this plaintiff commenced a suit against W. F. and Lulu E. Henning upon a certain mortgage upon the premises covered by the policy, and judgment was rendered in foreclosure proceedings against W. F. Henning and Lulu R. Henning, and a decree of foreclosure entered, and sale made under special execution, and possession of the property taken by the plaintiff herein. That this defendant had no notice or knowledge of the foreclosure proceedings until after the destruction of the property. That by reason of this fact the policy by its terms became void, and was not in force at the date of the destruction of the property.

Plaintiff in reply pleads an estoppel, and says that H. H. Arnold was the agent of the defendant, and issued the policy, and knew, at the time the policy was issued, that the property belonged to Lulu R. Henning, and that, with full knowledge of this fact, he issued the policy to W. R. Henning; that, with full knowledge of the fact that the property belonged to Lulu R. Henning, he undertook, as agent of defendant company, to issue insurance that would protect this plaintiff's mortgage interest, and delivered to the plaintiff the policy in suit, both as the agent of the defendant and of Lulu R. Henning, and the plaintiff accepted and relied upon the same. Plaintiff denies that W. F. Henning made any representations to the defendant as to his ownership of the property, or that he fraudulently concealed the knowledge of the exact title at the time the policy was issued.

Upon the issues thus tendered, the cause was tried to the court, and judgment and decree entered for the plaintiff as prayed. From this judgment, the defendant appeals.

The facts disclosed by the rceord appear to be substantially as follows:

W. F. Henning and Lulu R. Henning were husband and wife, and resided upon the property in controversy as their homestead. Prior to the 2d day of August, 1902, the title to the property was in W. F. Henning. On that day he conveyed the title to his wife, Lulu R. Henning. The title continued in her until the 11th day of November, 1908. On the 28th day of November, 1904, defendant company issued this policy of insurance to W. F. Henning for the sum of $500 for the term of five years. On the 3d day of June, 1905, the plaintiff made a loan of $500 to Lulu R. Henning, the note being signed by Lulu R. Henning and her husband, W. F. Henning, and the same was secured by a real estate mortgage on the homestead. At the time said loan was made, some controversy arose as to whether or not the real estate, independent of the building thereon, was sufficient security for the loan, and the plaintiff was informed that there was a policy of insurance upon the building on the premises. At the time the loan was made and the mortgage executed the policy in controversy, with the mortgage clause indorsed, was delivered by one H. H. Arnold to Mr. E. F. Richman, the attorney for the plaintiff, in the presence of Mrs. Henning, and the policy continued in the possession of Richman, as attorney for plaintiff, up to the time of the commencement of this trial. The lot on which the insured building stood was not worth to exceed $200. Upon making the loan, Richman, representing the plaintiff, went to see the property. Richman testifies:

“The application for the loan from Mrs. Funk to the Hennings came from H. H. Arnold. He was a loan agent. He represented that he had an application for a loan, but had no funds, and wanted to know if I could make it. I told him, if the security was satisfactory, I would do so. I went to see the property. The lot itself was probably not worth more than $200. Without the insurance on the house, the security would not be sufficient. Arnold told me there was insurance upon the property to the amount of $500, but did not say in what company. The day the loan was closed up, Arnold brought Mrs. Henning and her husband to my office to close the loan. The policy was delivered to me by Arnold in the presence of Mrs. Henning, with the mortgage clause attached.”

Richman was attorney for Mrs. Funk at the time. There is no evidence that there was anything said by W. F. Henning, or his wife, touching the ownership of the property, to the defendant company, or to any one representing the defendant company, at any time. There is no evidence that W. F. Henning said that he was the owner of the property absolutely, qualifiedly, or otherwise. There is no evidence that he concealed from the defendant, or its representatives, the title to the property. There is no evidence of what occurred, or what was said at the time the policy in question was issued, touching the title to this property. It appears, however, that Lulu R. Henning was in fact the owner; that W. F. Henning was her husband; that, as such, he had an insurable interest in the property; that the only interest, however, he had in the property was the homestead right.

[1] While there is no direct evidence of the fact, we think it cannot be disputed, under this record, that H. H. Arnold was the agent of the defendant company, at the time this policy was issued, and at the time it was turned over to the plaintiff's attorney with the mortgage clause attached. At the time the policy was issued, it was countersigned by H. H. Arnold, as agent. At the time the mortgage clause was attached, his name appears as agent, immediately following the mortgage clause. At the time this trial was had he was dead. Lulu R. Henning also was dead. W. F. Henning was not a witness at the trial. It appears that he had left the country for parts unknown long prior to this trial. The only direct evidence appearing in the record, touching the relationship of Arnold to the defendant company, is the statement of the witness Richman that Mr. Arnold said to him:

“I am agent of the company that carries this insurance, and I will bring the policy to you later. The next day he brought the policy to me, with the mortgage clause indorsed. This was the day the mortgage was executed, or immediately after. The policy was delivered to me by Arnold.”

We feel that we are justified in saying that Arnold was the agent of the company in some capacity, either soliciting agent or recording agent. Touching the question of Arnold's knowledge of the ownership of the property in question, the record discloses that the deed from W. F. Henning to Lulu R. Henning was dated August 2, 1902, and was duly filed for record in the...