Investors' Mortgage Co. v. Marine & Motor Ins. Co. of America
| Decision Date | 11 July 1923 |
| Docket Number | 25631 |
| Citation | 99 So. 486,155 La. 627 |
| Parties | INVESTORS' MORTGAGE CO. v. MARINE & MOTOR INS. CO. OF AMERICA |
| Court | Louisiana Supreme Court |
On Rehearing, March 8, 1924
Appeal from Civil District Court, Parish of Orleans; Percy Saint Judge.
Action by the Investors' Mortgage Company against Marine & Motor Insurance Company of America. Judgment for plaintiff, and defendant appeals.
Affirmed on rehearing.
Lemle Moreno & Lemle, of New Orleans, for appellant.
J. Zach Spearing and E. R. Mabry, both of New Orleans, for appellee.
OPINION
This is a suit for recovery under a contract of insurance made by the Marine & Motor Insurance Company of America, insuring five motor vehicles against loss by fire.
The vehicles were the property of Overby & Wilkins, a partnership, composed of J. D. Overby and A. C. Wilkins.
The owners placed a chattel mortgage on the property to secure an indebtedness of $ 4,250, represented by three mortgage notes.
The Investors' Mortgage Company purchased the notes, and thereafter applied for and obtained a policy of insurance, insuring the property in the name of Overby & Wilkins, the owners, for $ 5,000. Subsequent thereto, and during the life of this policy, Overby, without the knowledge of the Investors' Mortgage Company, or of the Marine & Motor Insurance Company, secured other insurance on the property from the Royal Insurance Company.
The policy sued upon contains the usual warranties, and under the subhead thereof entitled "Encumbrances" the following writing appears:
Four of the insured vehicles were destroyed by fire. Plaintiff gave timely and proper notice thereof to the insurance company; it made the required proof of loss; and it demanded payment. Payment was refused, and this suit was filed.
In the original petition the sum claimed as due the plaintiff is $ 3,750, with the statutory 12 per cent. penalty and $ 750 attorneys' fees, with legal interest on the principal sum and the attorneys' fees.
The petition was filed November 22, 1920, and the answer on November 29, 1920. On November 4, 1921, the case was submitted on an agreed statement of fact, and the argument was fixed for November 14, 1921. The case was reset for argument several times, but was finally argued and submitted and taken under advisement on July 7, 1922. On the 12th day of July, 1922, the plaintiff, with leave of court, filed a supplemental and amended petition, praying to be permitted to amend the original petition by increasing the principal amount originally sued for to $ 4,250. No answer was filed to the supplemental and amended petition, and no default was taken, but, on July 25, 1922, the lower court rendered judgment in favor of the plaintiff for the full amount alleged to be due in the supplemental and amended petition, filed after the case had been taken under advisement and prior to any hearing thereon. The court also rendered judgment for the statutory penalties, attorneys' fees, and interest as prayed for in both the original and supplemental petition.
From this judgment the defendant has appealed.
Two defenses are urged, viz.: That the policy of insurance sued upon does not contain a loss payable clause; and, that the policy was voided by other insurance.
Defendant also alleges the nullity of the judgment to the extent of $ 750, this being the sum by which the supplemental and amended petition increased the amount that plaintiff, in its original petition, alleged to be due.
Opinion.The first defense urged is untenable. Defendant contends that there is no loss payable clause in the policy; that such a clause, to be effective and binding upon the insurer, must appear in the face of the policy; that in the policy sued upon the loss payable clause appears in the policy as a warranty under the subhead "Incumbrances," and the written words purporting to be a loss payable clause when thus placed are merely descriptive of the owner's obligation to pay the plaintiff or any future holder or holders of the mortgage notes out of the insurance in case of loss.
The transcript shows that the negotiations for the policy were initiated by the plaintiff, and that the loss payable clause was written in the policy for the purpose of protecting its interest in the property as the holder and owner of the mortgage notes; that the insurer, with knowledge of these facts, issued the policy sued upon with the loss payable clause inserted therein as stated. Under these circumstances it is immaterial whether the loss payable clause appears in the face of the policy, or under the head of warranties, or whether it is attached to the policy as a rider.
The second defense urged is substantial. Under the head of "Exclusions" the policy contains the following clause:
"It is a condition of this policy that this company shall not be liable for loss or damage, * * * if at the time a loss occurs there be any other insurance covering against the risk assumed by this policy, which would attach, if this insurance had not been effected."
The mortgagee has an insurable interest in the property of the mortgagor. This interest is recognized by a long and well established line of decisions, as being an entirely separate and distinct insurable interest from that of the mortgagor or grantor, to the extent of the debt secured, regardless of any other security that the mortgagee may hold; but under these authorities it must appear that the mortgagee's separate and distinct insurable interest, as mortgagee, was covered by the policy of insurance. It will not suffice to say that the policy contains a loss payable clause stipulating that loss, if any, is payable to the mortgagee or to the holder or holders of the mortgage notes, for the reason that, if the property is insured in the name of the owner, and there is no stipulation or clause in the contract which insures an interest other than that of the owner, the contract of insurance is between the insurer and the owner of the property, and the continuance in force or the avoidance of the contract is subject to the will or act of the owner alone.
The plaintiff contends that the policy sued upon in the case at bar covers its interest as the holder and owner of the mortgage notes, for the reason that plaintiff applied for the insurance, paid the premium, and held the policy. The evidence shows that the brokers of the Investors' Mortgage Company tendered the insurance to the Marine & Motor Insurance Company through its brokers; that the Investors' Mortgage Company paid the premium for the insurance to the Marine & Motor Insurance Company; and that the policy was delivered to the Investors' Mortgage Company and was held by it. The evidence also shows that the Investors' Mortgage Company charged a commission for making the loan, exacted the procurement of insurance by...
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