Hill v. Massachusetts Fire & Marine Insurance Co.

• Court: Arkansas Supreme Court
• Writing for the Court: SMITH, J.
• Citation: Hill v. Massachusetts Fire & Marine Insurance Co., 195 Ark. 602, 113 S.W.2d 104 (Ark. 1938)
• Decision Date: 07 February 1938
• Docket Number: 4-4928
• Parties: HILL v. MASSACHUSETTS FIRE & MARINE INSURANCE COMPANY

113 S.W.2d 104

195 Ark. 602

HILL v. MASSACHUSETTS FIRE & MARINE INSURANCE COMPANY

4-4928

Supreme Court of Arkansas

February 7, 1938

Appeal from Garland Chancery Court; Sam W. Garratt, Chancellor affirmed.

Decree affirmed.

Leo P. McLaughlin, R. M. Ryan and Jay M. Rowland, for appellants.

Emory & Ridgway and Verne McMillen, for appellees.

OPINION

SMITH, J.

On March 11, 1930, D. B. Murry and his wife executed a mortgage upon three separate lots in the city of Hot Springs, upon each of which was a house, to secure their note to the order of J. E. Harper for $ 9,000. On one of the lots at 227 Plateau street, Murry and his wife operated an apartment house. Mrs. Murry died, and Murry sold this lot to E. D. Hill for $ 7,000. At the same time, and for the additional consideration of $ 2,000, Murry also sold Hill the furniture in the house. There was no sale of the other two houses and lots. The papers were prepared by the attorney for the estate of Harper, who had died, and insurance was written at the same time by an agent of three insurance companies who represented the bank where the attorney had offices as an official of the bank. These policies were written on the houses and the furniture as the property of Hill, with loss payable to the Harper estate as the interest of the estate might appear. Three insurance policies on the house sold Hill were written by three separate insurance companies, all containing the same loss payable clause, but the total amount of the insurance did not equal the balance then due on the note secured by the mortgage. No insurance was written on the other two buildings.

Separate suits were filed by Murry and Hill against each of the insurance companies to collect the respective policies. The insurance companies paid the face of the policies to the executor of the Harper estate and took a proportionate assignment of the deed of trust. The three suits on the policies were consolidated and the consolidated cause transferred to the chancery court upon the prayer of the insurance companies that they be subrogated to the lien of the mortgage, the foreclosure of which they prayed. It was alleged in the answers filed by the insurance companies that the conveyance to Hill from Murry was simulated, and not actual, and had been made for the false and fraudulent purpose of enabling Hill to secure insurance which Murry was unable to procure, and that after the insurance had been written, Murry caused the apartment building to be burned. The truth of this allegation is the question of fact in the case. Other points discussed are questions of law.

The testimony is voluminous and conflicting as to whether the fire was of incendiary origin, and after a careful consideration thereof we are unable to say that the affirmative finding is contrary to the preponderance of the evidence on this issue.

The theory upon which the case was defended by the insurance companies in the court below was that, while they were liable under the policies to the mortgagee, they were not liable to either Murry or Hill, and it was upon this assumption that they paid the insurance to the mortgagee and took a proportionate assignment of the mortgage upon which they prayed subrogation and the foreclosure of the mortgage, which was then long past due.

The decree from which is this appeal granted the relief prayed and the insurance companies were given a lien by subrogation "which lien is second and subject to the lien of the estate of J. E. Harper (the mortgagee) for the balance due on the note and mortgage sued on herein." The insurance companies make no point that they should share ratably with the mortgagee in the proceeds of the sale of the mortgaged property...