Inland Finance Co. v. Home Ins. Co., 19126.
| Citation | 236 P. 73,134 Wash. 485 |
| Decision Date | 14 May 1925 |
| Docket Number | 19126. |
| Parties | INLAND FINANCE CO. v. HOME INS. CO. |
| Court | United States State Supreme Court of Washington |
Department 1.
Appeal from Superior Court, Spokane County; Blake, Judge.
Action by the Inland Finance Company against the Home Insurance Company. Judgment for defendant, and plaintiff appeals. Affirmed.
Charles E. Swan, of Spokane, for appellant.
E Eugene Davis, of Spokane, for respondent.
Suit on a fire insurance policy. A demurrer to the complaint was sustained. The plaintiff refused to plead further and a judgment was entered dismissing the action.
The complaint alleged that the Spokane Elgin Company sold an automobile to one Henry Walberg, who gave a mortgage back to the vendor on the machine to secure a part of the purchase price. This mortgage was duly filed and within a few days after its execution was assigned by the Elgin Company to the appellant, Inland Finance Company. The mortgage provided that the mortgagor should keep the property insured in favor of the mortgagee, or its assigns, against loss by fire collision, theft, etc. Complying with this provision of the mortgage, Walberg, the mortgagor, procured from the respondent a policy of insurance on the automobile in question for $1,100, protecting the property against loss by fire theft, etc. The complaint further alleged that during the term of the insurance, the mortgage mentioned was satisfied and Walberg gave to the appellant another mortgage covering the same property, but securing a less amount of the same debt. This mortgage contained the same provisions as those found in the first. After the giving of this mortgage, and also during the term of the insurance, Walberg gave a second mortgage on the automobile to a man by the name of Stone. The policy runs to Walberg, the mortgagor. It recognizes that the appellant holds a mortgage on the insured property, for it has the following clause:
'The automobile described is fully paid for by the assured, and is not mortgaged or otherwise incumbered, except as follows: Inland Finance Co.'
Another provision of the policy provides that it shall be void if the insured property be 'incumbered by any lien or mortgage.' During the term of the insurance, the automobile was totally destroyed by fire.
We will not discuss the first question raised, which is the fact that the insurance policy does not contain any clause providing that the loss, if any, shall be payable to the mortgagee as his interest may appear, nor any reference to the mortgagee other than merely reciting that it holds a mortgage on the property, nor will we decide how such facts might affect the appellant. Neither will we discuss the second question raised, which is the effect on the insurance policy because of the satisfaction of the mortgage that existed when the insurance was written and the giving of another mortgage on the same property to appellant to secure a part of the same indebtedness.
We will assume for the purpose of this case that there is in the policy a provision to the effect that the loss, if any, shall be paid to the mortgagee as its interest may appear and that the appellant still holds the mortgage which was executed prior to the issuance of the insurance. Certainly, appellant's assumed position is fully as strong as that actually occupied by it.
Where a fire insurance policy runs to a mortgagor and provides that the loss, if any, shall be payable to the mortgagee as his interest may appear, the almost universal rule of the authorities is that the mortgagee is merely an appointee to receive the money in the event of loss, and that his rights are no greater than those of the assured, and that a breach by the latter of the terms of the policy will void it as to the mortgagee. In other words, the 'pay to the mortgagee' clause is but little, if anything, more than an order by the...
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