Hayden v. American Cent. Ins. Co.

• Decision Date: 04 May 1920
• Docket Number: No. 16056.,16056.
• Citation: 221 S.W. 437
• Parties: HAYDEN et al. v. AMERICAN CENT. INS. CO. et al.
• Court: Missouri Court of Appeals

221 S.W. 437

HAYDEN et al. v. AMERICAN CENT. INS. CO. et al.

No. 16056.

St. Louis Court of Appeals. Missouri.

Submitted on Briefs April 12, 1920.

Opinion Filed May 4, 1920.

Rehearing Denied May 21, 1920.

Appeal from St. Louis Circuit Court; William T. Jones, Judge.

"Not to be officially published."

Action by C. E. Hayden, trustee, and another against the American Central Insurance Company, in which George Y. Martin and another were made parties. From a judgment for plaintiffs, the Insurance Company appeals. Affirmed.

Leahy & Saunders and D. W. Voyles, all of St. Louis, for appellant.

Taylor R. Young and Fauntleroy & Cullen, all of St. Louis, for respondent Krupnick. George B. Webster, of St. Louis, for respondents Meininger and Hayden.

Statement.

REYNOLDS, P. J.

This is an action on an insurance policy for $3,100, for a term of three years from January 21, 1914, at an annual premium of $46.50, the policy issued in favor of George F. Martin, as owner. By rider attached, in case of loss, the amount of insurance is payable to C. E. Hayden, trustee for Arthur O. Meininger. The suit was instituted by Arthur O. Meininger, mortgagee under the two deeds of trust, hereinafter referred to, and C. E. Hayden, trustee in those deeds of trust, against appellant, to recover, under the mortgage clause attached to the policy, the amount of insurance covered, total loss of the property insured, a frame dwelling, known as 1725 Princeton avenue, being averred. Judgment was demanded for $3,100 under the policy, with interest from March 6, 1915, at six per cent. per annum, and for. $310 as damages for alleged vexatious delay, and for a reasonable attorneys' fee. The suit was filer. May 7, 1915, entry of appearance made by appellant, defendant below.

On February 9, 1916, appellant filed its amended answer and what is designated by appellant as a cross-bill setting up in the answer that the policy was issued in the name of George F. Martin, as insured, but that the property insured was In fact owned by one Adolph Krupnick at the time the policy was issued, and it prayed that Martin and Krupnick be made parties defendant. Appellant averred that said policy was void, because of the concealment from it of lack of title of Martin and of the interest of Krupnick. By way of its cross-bill, as it is called by appellant, it set up the same facts, averred that by reason thereof the policy was void, and sets out the subrogation clause as follows:

"It is also agreed that whenever this company shall pay to the mortgagee or trustee any sum for loss under this policy, and shall claim that as to the mortgagor or owner, no liability therefor existed, it shall at once and to the extent of such payment be legally subrogated to all the rights of the party to whom such payment shall be made, under any and all securities held by such party for the payment of said debt. But such subrogation shall be in subrogation to the claims of said party for the balance of the debt so secured. Or this company may, at its option, pay the said mortgagee or trustee the whole debt so secured, with all the interest which may have accrued thereon to the date of such payment, and shah thereupon receive from the party to whom such payment, shall be made an assignment and transfer of said debt, with all securities hale by said party for the payment thereof."

Appellant then avers that if plaintiffs, as trustee or mortgagee, had any interest in or title to the property, or any right to the insurance under the policy, it (defendant insurance company), as insurer under the policy, claims its right to be subrogated to the rights of the mortgagee under the mortgage securities. The defendant further avers that Martin and Krupnick are necessary parties, interested in the subject-matter of the case, and that a complete determination of the action cannot be had without the presence of both of them,

"in that the defendant herein claims the right to be subrogated to the rights of the plaintiff, Arthur O. Meininger, in and to the securities held by him, constituting a first and second lien, as stated in this answer, on the real estate, the legal title of which is in said George F. Martin, and the equitable title of which is in said Adolph Krupnick, and defendant therefore prays that the said George F. Martin and Adolph Krupnick be made parties defendant to said cause.

"Defendant states that frequently since the occurrence of said loss it has offered to pay to said plaintiffs $3,000 of said policy, provided the said plaintiffs transfer to defendant the said promissory notes secured by deeds of trust set out in the said petition, but that plaintiffs have declined and refused to transfer said promissory notes secured by said deeds of trust, or to subrogate defendant to the rights of plaintiffs in said property." (The offer of $3,000 is under the erroneous supposition that the $3,100 also covered the outbuildings.) Admitting that it has not paid the policy, but denying that its refusal was vexatious or for delay, defendant tenders into court the premium received and the interest thereon.

Plaintiffs' reply was a general denial. Thereafter the court ordered that Martin and Krupnick be made parties defendant, each of whom filed a pleading by way of answer and reply. Krupnick averred that he had been the owner of said property since September 13, 1913, subject to the deeds of trust, averred that appellant, American Central Insurance Company at all times had full knowledge of said fact, and denied that it was entitled to subrogation.

The answer of Martin was substantially to the same effect, except that he disclaimed any beneficial interest in the property, and stated that the deeds conveying the premises were made to him for the purpose of having the property conveyed to Krupnick. By way of reply to these pleadings, appellant specifically denied that it had any knowledge that Krupnick was owner, and of any conveyance from Martin to Krupnick, and averred that it first learned of these facts long after the occurrence of the fire, and that it has tendered into court the amount of the premium with interest.

The first and second deeds of trust were executed September 12, 1913. The Night and Day Bank of St. Louis had prior thereto owned the insured property, referred to as the Princeton avenue or Richmond Heights property. Adolph Krupnick, prior to that date, owned improved real estate on Dickson street in St. Louis, also incumbered. With the aid of one Altheimer, a real estate agent, the bank (which carried the Richmond Heights property in the name of Arthur O. Meininger), on September 12, 1913, traded the Richmond Heights property to Adolph Krupnick, for his interest in the Dickson street property, Altheimer acting as agent for both parties. Krupnick at the time had some children by his former wife, since deceased, and for family reasons did not want to have his name of record as the owner of the real estate. Accordingly, Meininger, acting for the bank, made a deed conveying the Richmond Heights property to George F. Martin, a collector in the employ of Altheimer, Martin and his wife, contemporaneously therewith executing the first and second deeds of trust upon the property, to secure notes payable to the order of Meininger. On the next day Martin and his wife executed a deed conveying the fee-simple title in and to the Richmond Heights property, subject to the deeds of trust, to Adolph Krupnick, and it was agreed between Altheimer and Krupnick that this deed would remain unrecorded in the possession of Altheimer until such time as Krupnick called for it.

There is no record evidence that either of plaintiffs knew that Martin had made the conveyance to Krupnick, or knew of the agreement between Altheimer and Krupnick that any deed should remain unrecorded. Nor was there any written application for the policy, the request for its issue having been made over the telephone to the defendant's city office. It should also be noted that while defendant claims that the policy covered only $3,000 on the house, and that the $100 was on the outbuildings, etc., that the policy itself calls for "$3,100 on the two-story, shingle-roof frame building and additions thereto," after which appears this: "$ Nil on fencing, stable and outhouses belonging to above-described building." These were not injured or destroyed.

The first deed of trust was to secure a promissory note for $2,500 and interest notes in the sum of $75, one due every six months, until maturity of the principal note, which was due five years after date, or September 12, 1918.

The second deed of trust, executed the same day, to wit, September 12, 1913, was to secure the sum of $8751 purchase money, evidenced by fifty-eight promissory notes of $15 each, payable in from one to fifty-seven months after date, and one note, payable fifty-eight months after date, for $20.

At the time of the fire these deeds of trust remained unpaid; and at the time of the trial there was still due on the first mortgage $2,500, and on the second mortgage $875, making a total of $3,375. The policy was issued January 21, 1914, for a premium of $46.50, insuring George F. Martin for the term of three years, from the 20th day of January, 1914, in the sum of $3,100, on the dwelling house in question. It is the New York standard policy and contains provisions rendering it void in case of concealment or misrepresentation of any material fact or circumstance concerning the insurance or subject thereof, or if the interest of the insured be not truly stated, or if the interest of the insured be other than unconditional and sole ownership, or if the subject of insurance be a building on ground not owned by the insured in fee simple. The policy bears a mortgage clause providing that it is payable, in case of loss, to C. E Hayden, mortgagee or trustee, as in the mortgage clause provided, which clause also contains the provision, among others, that the interest of...