Huckaby v. Georgia Farm Bureau Mut. Ins. Co., 52128

• Decision Date: 27 October 1976
• Docket Number: Nos. 1,3,2,No. 52128,52128,s. 1
• Citation: 231 S.E.2d 378,140 Ga.App. 493
• Parties: Herman HUCKABY v. GEORGIA FARM BUREAU MUTUAL INSURANCE COMPANY
• Court: Georgia Court of Appeals

Page 378

231 S.E.2d 378

140 Ga.App. 493

Herman HUCKABY v. GEORGIA FARM BUREAU MUTUAL INSURANCE COMPANY.

No. 52128.

Court of Appeals of Georgia, Division Nos. 1, 2, 3.

Oct. 27, 1976.

Rehearing Denied Nov. 19, 1976.

Charles T. Ballard, Fayetteville, for appellant.

Donald M. Fain, Michael J. Gorby, Atlanta, for appellee.

WEBB, Judge.

Georgia Farm issued a fire insurance policy to Huckaby insuring a tenant dwelling on acreage owned by him in Fayette County against loss by fire, lightning and other perils from January 10, 1973 to January 10, 1974. By its terms, assignment of the policy was not valid except with the written consent of the insurance company. On April 13, 1973, Huckaby conveyed to Mr. and Mrs. Harbin a part of his lands, including the insured tenant house, and accepted from the purchasers for a part of the purchase price their note and a deed to secure debt reconveying to him the property. He and Harbin agreed that they would continue the insurance coverage under Huckaby's policy until it 'ran out' and Harbin paid Huckaby $112.58 in proration of the premium.

On May 19, 1973, the tenant dwelling was destroyed by fire and Georgia Farm refused to make any payment on Harbin's claim. Huckaby then filed suit seeking to collect the insurance proceeds under the policy issued to him prior to the sale. The trial court granted Georgia Farm's motion for summary judgment, finding that Huckaby's interest in the insured property on the date of the loss was solely that of a mortgagee under the deed to secure debt; and that transfer of the insurance policy without consent of the insurer voided the policy. Huckaby appeals and we affirm the judgment below.

Clearly the attempted assignment of the policy to Harbin was invalid. Huckaby did have an insurable interest in the indebtedness which the property secures under Code Ann. § 56-2405(2). However, in order for him to recover he would have to show he had suffered a loss as the result of a fire within the meaning of Code Ann. § 56-2405(3). See Norwich Union Fire Ins. Society v. Bainbridge Grocery Co., 16 Ga.App. 432, 434, 85 S.E. 622. Georgia Farm had the burden of proof on its motion for summary judgment. It established that Huckaby had received full payments under the security deed as those payments became due and Huckaby made no contrary showing. Thus, in the face of this proof the evidence demanded a finding that the insured had not suffered a loss. Heimanson v. Meade, 140 Ga.App. 534(3), 231 S.E.2d 373.

The failure to show that the obligation under the security deed was diminished by the fire loss required a judgment for the insurer. Furthermore, in the event a default were to occur and a foreclosure were to take place, Georgia Farm has filed with the trial court a security bond providing that if the fair market value of the property at the time of such foreclosure is less than the amount owed on the promissory note, the deficiency will be paid up to the limit of the face amount of the fire insurance policy.

Judgment affirmed.

BELL, C.J., QUILLIAN, P.J., and CLARK, STOLZ, MARSHALL and McMURRAY, JJ., concur.

DEEN, P.J., dissents.

SMITH, J., not participating.

DEEN, Presiding Judge, dissenting.

I respectfully dissent on the following grounds:

1. Under Code § 56-2405(2) plaintiff has an insurable interest if he has any 'substantial economic interest in the safety or preservation' of the property. It cannot be denied that when I hold a security deed to property I have an interest in its preservation.

2. Under Code § 56-2405(3) the measure of my interest (as opposed to its existence) is the 'extent to which (I) might be damnified by (its) loss.' Judge Webb's opinion presumes that I have to show I would be financially injured, but this isn't what the code section says. It says that the amount of loss I might suffer is, in effect, my measure of damages. Under general law, failure to allege an exact, or even a correct, measure of damages will not result in dismissal of an action. The defect is amendable, or curable by proof on trial.

3. I think in my own policy my insurable interest continues even though I have exchanged a warranty deed for a deed to secure debt, not for the full amount, but for the amount I might be damaged. The loser, of course, is the buyer, who gets no benefit from the seller's insurance.

4. Under the oft-quoted case of Holland v. Sanfax Corp., 106 Ga.App. 1, 126 S.E.2d 442 a summary judgment may not be granted unless 'giving the opposing party the benefit of all reasonable doubts and all favorable inferences that may be drawn from the evidence, there is no genuine issue as to any material fact, and the moving party is entitled to a judgment as a matter of law.'

If this were an appeal from the judgment on the trial of the case the situation would be different, but what we have here is a summary judgment in favor of the insurer finding that it has no liability to the plaintiff. The insurer contends that although a sum greater than the fire loss is still owing on the debt under which the plaintiff retains legal title, the plaintiff cannot be injured by such a judgment...