Gillespie v. Scottish Union &nat'l Ins. Co

• Decision Date: 18 December 1906
• Citation: 56 S.E. 213,61 W.Va. 169
• Court: West Virginia Supreme Court
• Parties: GILLESPIE. v. SCOTTISH UNION &NATIONAL INS. CO.

61 W.Va. 169

56 S.E. 213

GILLESPIE.

v.SCOTTISH UNION &NATIONAL INS. CO.

Supreme Court of Appeals of West Virginia.

Dec. 18, 1906.

1. Insurance—Subrogation or Insurance— Payment of Loss to Mortgagee.

K. borrowed from B. B. & L Ass'n $400, and gave deed of trust on house and lot to secure the loan, and bound herself to keep insurance on the building to amount of $400 for the benefit of the association, and, in case of failure to insure, the association to insure and add premiums, paid by it, to the debt. to conveyed the property to G., who assumed to pay the trust debt as part of the purchase consideration. No notice was given to the association or insurance company of such conveyance. More than two years after the conveyance to G. the association purchased insurance of $400 on the property from the S. U. & N. Ins. Co. in the name of K.; the policy containing the usual mortgage clause and stipulating that the policy should continue good as to the mortgagee, notwithstanding any forfeiture by the owner, and that, if any loss should be paid to the mortgagee under such circumstances, the insurer should be subrogated to the rights of the mortgagee under the mortgage. The insured property was destroyed by fire. G. complied with none of the requirements of the policy by giving notice of the fire or making proofs of loss or otherwise. The insurer paid the association $39S.62, th« amount of its debt, and took an assignment thereof. Held, that it was entitled to be subrogated to the rights of the association and to enforce the morgage.

2. Same—Policy—Interest ih Proceeds.

A mortgagor has no interest in the proceeds of a. policy insuring the mortgagee, taken out by the mortgagee to protect his own interest, and in which the interest of the mortgagor has been forfeited, leaving that of the mortgagee still in force.

[Ed. Note.—For cases in point, see Cent. Dig. vol. 28, Insurance, §§ 1444-1447.]

3. Compromise and Settlement—Necessity of Acceptance.

In the matter of a disputed claim between R, and G.. R., the claimant, proposed in writing on April 7th as a compromise that, if G. would pay $100, R. would accept it in full of the claim and release his mortgage lien on property securing the debt. On the 12th of May following, not receiving a response from G., R. sold the debt to S. U. & N. Ins. Co., assigned the same, and subrogated the assignee to the rights of the mortgagee. In a proceeding by the assignee to enforce the mortgage, it is error for the court to enforce the compromise offered by R., but which was never accepted by G. (Syllabus by the Court)

Appeal from Circuit Court, Tucker County.

Bill by C. D. Gillespie against the Scottish Union & National Insurance Company and others. Decree for plaintiff, and the insurance company appeals. Reversed, and bill dismissed.

Cunningham & Stallings, for appellant Geo.

P. Shirley and E. D. Talbott for appellee.

McWHORTER, P. Lena Kantorowitz borrowed from the Baltimore Building & Loan Association upon four shares of stock the sum of $400, and, together with Harry Kan-torowitz, her husband, conveyed to S. O. Strieby, trustee, lot No. 108 in the town of Thomas, in Tucker county, to secure the payment of said sum of money according to the terms of such loan. Said loan and deed of trust were made and executed on the 18th day of November, 1897. As a further security for said loan, the buildings on said lot were insured by the said Kantorowitz in the sum of $500, and it was provided In said deed of trust that the said property shouldbe kept insured by the said Kantorowitz in the sum of at least $400 for the benefit of said loan association. When the said Insurance expired, said Kantorowitz failed to reinsure the property, and the same was reinsured by the said building and loan association for its benefit in the name of said Kantorowitz in the Scottish Union & National Insurance Company. On the 28th day of January, 1899, said Lena Kantorowitz and her husband conveyed the said property to C. D. Gillespie in consideration of the sum of $338 paid by him in cash, and as further consideration he assumed to pay off the remainder of the loan to the said building and loan association, amounting at that time to about $362, making a total consideration of $700. On the 12th day of November, 1901, the building on said lot was destroyed by fire, and on the 12th day of May, 1902, the said insurance company paid to said building and loan association $398.62, the amount of its debt, and took an assignment thereof from the said building and loan association, whereby the said insurance company claimed to be subrogated to the rights of said building and loan association. C. O. Strieby. the trustee in said deed of trust, at the instance of said insurance company, as assignee of said building and loan association, advertised to sell said property under said deed of trust to satisfy said debt. C. D. Gillespie, the vendee of said Kantorowitz, filed his bill in equity in the circuit court of Tucker county, praying that said Strieby, trustee, and the Scottish Union & National Insurance Company, be perpetually enjoined and restrained from selling said lot No. 108 under said trust deed, and that the lien created upon said property by reason of said trust be released, and for general relief. An injunction was granted staying said sale.

The defendant insurance company filed its demurrer, which was overruled, and tendered its answer, to which the plaintiff replied generally. Defendant filed with its answer a copy of the policy issued by it, dated the 31st of August, 1901, upon the property in question in the name of Lena Kantorowitz for $400, which policy contained the following provision: "This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if any change, other than by death of an insured, take place in the interest, title, or possession of the subject of insurance (except of change of occupants without increase of hazard), whether by legal process or judgment, or by voluntary act of the insured, or otherwise." Said policy also contained a provision that, in case fire occurred, the insured should give immediate notice of any loss thereby In writing to the insurance company, and within 60 days after the fire, unless such time should be extended by the company, should render a statement to the company, signed and sworn to by the insured, stating the knowledge and belief of the Insured as to the time and origin of the fire, and make full proof of his loss by such fire. The policy also contained the usual mortgage clause, making the loss or damages, if any, payable to Robinson & Barton, receivers of the Baltimore Building & Loan Association, as their interest might appear; and providing that the insurance should not be invalidated, as to the interest only therein of the said receivers, by any act or neglect of the mortgagor or owner of the property, nor by any change in the title or ownership of the property. The answer further averred that on the 12th day of May, 1902, the defendant insurance company paid to the receivers of the Baltimore Building & Loan Association the sum of $398.62, the amount of their debt against the property, and took an assignment thereof, and filed with its answer a copy of said assignment bearing date the said 12th day of May, 1902, and denied the allegation of the plaintiff's bill that the debt only amounted to $232, and averred that the correct amount was that paid by defendant to the receivers, and averred that plaintiff gave no notice of the fire or complied with any of the provisions of the insurance policy in relation thereto.

Depositions were taken and filed in the cause by the plaintiff and the defendant Plaintiff, with his depositions, filed two letters from Bird M. Robinson, co-receiver of the Baltimore Building & Loan Association, to himself concerning the loss. The first letter, dated March 18. 1902. informed plaintiff that the debt of Lena Kantorowitz to the association amounted then to $384.46: that the receivers had insurance on the property, but that the insurance company claimed that it was not liable to plaintiff for any sum, for the reason that the sale from Kantorowitz to him had not been reported to the insurance company, and that they believed they could make a compromise settlement with the insurance company, and proposed...