Hyde v. Hartford Fire Insurance Company

• Decision Date: 02 December 1903
• Docket Number: 13,059
• Citation: 97 N.W. 629,70 Neb. 503
• Parties: ARTHUR A. HYDE, EXECUTOR OF THE LAST WILL AND TESTAMENT OF MARY T. HYDE, DECEASED, APPELLEE, v. HARTFORD FIRE INSURANCE COMPANY ET AL., APPELLANTS
• Court: Nebraska Supreme Court

97 N.W. 629

70 Neb. 503

ARTHUR A. HYDE, EXECUTOR OF THE LAST WILL AND TESTAMENT OF MARY T. HYDE, DECEASED, APPELLEE, v. HARTFORD FIRE INSURANCE COMPANY ET AL., APPELLANTS

No. 13,059

Supreme Court of Nebraska

December 2, 1903

APPEAL from the district court for Lancaster county: EDWARD P HOLMES, JUDGE. Affirmed.

AFFIRMED.

Halleck F. Rose and Flansburg & Williams, for appellants.

Ames & Ames, contra.

DUFFIE C. KIRKPATRICK, C., concurs.

OPINION

DUFFIE, C.

December 26, 1885, one Van Aukin, being the owner of lots 313 and 314 in the village of Orleans, Harlan county, Nebraska, made to the appellant L. H. Kent his note for $ 1,000, due December 26, 1890, and secured the same by mortgage upon the lots above named. The mortgage contained the following stipulation:

"And we hereby agree to keep the buildings upon said premises insured from the date of this mortgage until it is paid, for the sum of one thousand five hundred ($ 1,500) dollars, and make the policy payable and deliver it to said mortgagee or his assigns, and if we fail to keep said buildings insured as above agreed, said mortgagee or his assigns may so insure them, and the premiums therefor shall be added to and made a part of the principal sum hereby secured and shall bear the same rate of interest."

Before the maturity of the note, L. H. Kent sold the same to Mary T Hyde and indorsed the same as follows: "I hereby guarantee the payment of this note and all coupons attached." He also assigned the mortgage, which assignment was duly recorded in Harlan county. In December, 1892, Mary T. Hyde brought an action in the district court for Douglas county, seeking to recover the amount of the note from Kent on his guaranty of payment, but no summons was properly issued or served upon Kent until April, 1896, and judgment went in favor of Kent, the court holding that the statute of limitations had barred the action. After his sale of the note to Mrs. Hyde, Kent purchased and became the owner of the mortgaged premises, his deed reciting that he took the same subject to the mortgage. After becoming the owner in fee of the mortgaged premises, and on the 15th day of August, 1895, Kent insured the building on said lots in the sum of $ 2,000, $ 1,000 of which were in the Hartford Fire Insurance Company, the policy being payable to himself. November 6, 1895, the buildings covered by the policy were totally destroyed, and December 30, 1895, the company paid him $ 1,000, the full amount of the policy. At the time of making payment the company took from Kent a bond of indemnity, to the effect that he would save the company harmless in case it were compelled to pay the amount of the policy to another party. July 18, 1898, Mary T. Hyde, the owner of the note and mortgage, departed this life in the state of Connecticut, and Arthur A. Hyde, plaintiff and appellee, is the duly appointed executor of her estate. December 12, 1899, the plaintiff commenced this action against the insurance company, claiming, as the owner of the mortgage, to have an equitable lien upon the amount due upon the policy issued to Kent, and asking judgment against the company for the sum of $ 1,000, with interest from November 11, 1895. Upon the suggestion of the company that Kent had been paid the amount of the policy, he was made a party defendant to the action, and Kent and the company filed their separate answers setting up the facts above set forth, and in addition thereto the company set out the bond of indemnity made to it by Kent at the time of payment to him of the loss under the policy, and concluded with a prayer as follows:

"Wherefore this defendant prays to be dismissed hence without day and to recover its costs herein expended, or, in the alternative that the court finds, on the hearing, that there is a subsisting liability on account of the cause of action set forth in the petition on the part of this defendant and defendant Kent to plaintiff, then, as between the defendants, the liability of defendant Kent be held primary and that of this defendant secondary only; and for such other, further and different relief as to the court may seem just and equitable."

The case was tried upon a stipulation of facts which, in addition to the matters above stated, contains the following:

"It is agreed that, at the time of the destruction of the buildings situated upon the premises herein described, the same had been and were by said L. H. Kent insured in the sum of $ 2,000 and that the value of said buildings did not exceed the sum of $ 2,000; that all of said insurance was collected by said L. H. Kent and retained by him."

It was further stipulated that, at the time the buildings were burned, Kent was personally liable upon the Van Aukin note by reason of his guarantee, and that said note was not five years past due, and that, at the time of the loss of the buildings and the payment of the amount of the policy to Kent, the insurance company had actual knowledge of the existence of the mortgage to the plaintiff's testatrix and that the same was wholly unpaid. Upon the hearing the court entered a decree, finding that the insurance company had due notice of the provisions of the mortgage and that, by its terms, the loss under the policy in controversy was payable to the mortgagee; that Kent, in obtaining the policy of insurance mentioned in the petition, had due notice of the mortgagee's rights and should be held to have insured for her benefit; that the defendant insurance company paid the policy to Kent, and that Kent, at the time of the loss and payment of the money, was personally liable to the plaintiff for the debt mentioned in the petition: "That, by reason of the premises, the obligation of the defendant, the Hartford Insurance Company, to the plaintiff is that of principal debtor, but that such liability to the plaintiff as herein found, is, as between said insurance company and the estate of Lewis H. Kent, that of surety only, and the primary and ultimate liability therefor is upon the estate of said Lewis H. Kent; and the said fire insurance company, in case of its payment of the sum due to plaintiff, as found by this decree, is...