Jeffreys v. Boston Ins. Co

• Decision Date: 09 March 1932
• Docket Number: No. 97.,97.
• Citation: 162 S.E. 761,202 N.C. 368
• Court: North Carolina Supreme Court
• Parties: JEFFREYS et al. v. BOSTON INS. CO. et al.

162 S.E. 761

202 N.C. 368

JEFFREYS et al.

v.BOSTON INS. CO. et al.

No. 97.

Supreme Court of North Carolina.

March 9, 1932.

Appeal from Superior Court, Wayne County; Cranmer, Judge.

Action by Z. M. L. Jeffreys and others, trading as Jeffreys & Sons, and another, against the Boston Insurance Company and the Continental Gin Company. From the judgment directing that defendant Continental Gin Company be paid certain sum out of funds in hands of clerk of court and that balance be paid to plaintiffs named, plaintiffs named appeal.

Judgment modified and, as modified, affirmed.

This is an action on a policy of insurance issued on September 9, 1930, by which the defendant Boston Insurance Company insured the plaintiff Ransom Creech against loss or damage by fire on the property described in the policy. It is provided in the policy that the loss; if any, shall be payable to the plaintiffs Jeffreys & Sons as their interest may appear.

While the policy was in full force and effect, according to its terms, to wit, on January 23, 1931, the property described therein was destroyed by fire. Both the plaintiffs Jeffreys & Sons and the defendant Continental Gin Company, as creditors of the plaintiff Ransom Creech, filed claims with defendant Boston Insurance Company for the amount of the loss. It was agreed by and between the plaintiffs and the defendants that this amount was $2,750. After the commencement of this action, this sum was paid into the office of the clerk of the superior court of Wayne county, by the defendant Boston Insurance Company, in full settlement of all claims against said company under its policy of insurance. This action, therefore, involves only the conflicting claims of the plaintiffs Jeffreys & Sons, and of the defendant Continental Gin Company, to said sum, now in the hands of said clerk. The plaintiff Bansom Creech makes no claim to any part of said sum in his own behalf.

The policy of insurance sued on in this action was issued to the plaintiff Ransom Creech as the owner of the property described therein. It contains a provision in words as follows: "It is agreed that any loss or damage that may be ascertained and proven to be due the assured under this policy shall be payable to Jeffreys & Sons, as their interest may appear, subject, nevertheless, to all the conditions of the policy."

At the date of the issuance of said policy, the plaintiff Ransom Creech was indebted to the plaintiffs Jeffreys & Sons in a sum in excess of $3,000. This indebtedness was secured by a mortgage deed executed by the plaintiff Ransom Creech, by which the said plaintiff conveyed to the said Jeffreys & Sons the property described in the policy of insurance. This mortgage deed is dated January 15, 1930, and was duly recorded in the office of the register of deeds of Wayne county. The indebtedness secured by said mortgage deed has not been paid. The amount of said indebtedness exceeds the amount of the loss covered by the policy.

The property described in the policy of insurance sued on in this action consisted in part of certain gin machinery. This gin machinery was sold to the plaintiff Ransom Creech by the defendant Continental Gin Company on or about August 21, 1929. In part payment of the purchase price for said gin machinery, the plaintiff Ransom Creech executed and delivered to the defendant Continental Gin Company two notes, which were duly recorded in the office of the register of deeds of Wayne county, prior to the registration of the mortgage deed from the plaintiff Ransom Creech to the plaintiffs Jeffreys & Sons. Each of said notes contained a provision in words as follows:

"It is expressly understood and agreed by and between the holder and the maker of this note that the title and ownership of said machinery, for which this note is given, shall remain in the said Continental Gin Company, or owner of this note, until this note and all other installment notes or renewals thereof, shall be paid in full.

"It is further understood that the maker of this note guarantees said Continental Gin Company against any damage or loss to said machinery by fire or other cause, and if said property is damaged or destroyed by fire or other cause, the maker of this note agrees to pay this note and will not claim any rebate or reduction on account of such loss."

At the date of the fire which destroyed the property covered by the policy of insurance, including the gin machinery which was sold to the plaintiff Ransom Creech by the defendant Continental Gin Company, the amount due on said notes was $1,094.40, with interest from December 4, 1929. This amount has not been paid.

There is no provision in the policy that the loss, if any, or any part thereof, shall be payable to the defendant Continental Gin Company, nor is there any allegation in the answer of the said defendant that the insured Ransom Creech covenanted or agreed to insure said machinery for the benefit of said defendant.

It is alleged in the complaint filed jointly by the plaintiffs Jeffreys & Sons and Ransom Creech that the...