Kintzel v. Wheatland Mut. Ins. Ass'n, 55033

Citation65 A.L.R.3d 1110,203 N.W.2d 799
Decision Date17 January 1973
Docket NumberNo. 55033,55033
CourtUnited States State Supreme Court of Iowa
PartiesOlive B. KINTZEL, Plaintiff, v. WHEATLAND MUTUAL INSURANCE ASSOCIATION, Appellee, and Darrel D. Hicks and Marlene K. Hicks, Appellants.

Norton & Freese, Lowden, for appellants.

Tomasek & Vogel, Grinnell, and Casterline & Hamiel, Tipton, for appellee.

Heard and considered en banc.

REYNOLDSON, Justice.

This is a law action on an insurance policy, seeking recovery for windstorm damage in the amount of $9457. After trial to court on stipulated facts, judgment was entered for defendant insurance company and against both plaintiff, Olive B. Kintzel, and intervenors, Darrel D. Hicks and Marlene K. Hicks. Plaintiff did not appeal, and the trial court's judgment is final as to her. This appeal concerns only the rights of the intervenors (hereafter called Hicks). We reverse the trial court, and remand.

In 1962, John Proesch, Jr. and his wife (hereafter called Proesch) sold the real estate here involved to Olive B. Kintzel under a contract which obligated her to keep the buildings and improvements insured against various risks, including windstorm.

The contract required Kintzel to maintain adequate insurance at her own expense and stipulated that, if loss occurred, '* * * the insurance proceeds may be used under the supervision of (Proesch) to replace or repair the loss if the proceeds be adequate; but in any event such funds shall stand as security for the payment of the sums (due under the contract).'

Kintzel discharged this contractual duty by purchasing the insurance policy from defendant. It named Olive B. Kintzel as the insured and designated her as a contract purchaser. In the space reserved for listing mortgage interests in the property, the word 'mortgagee' was stricken out and this appeared: 'John Proesch, Jr., Owner.'

On April 6, 1965, while her contract with Proesch still had an unpaid balance of $17,000, Mrs. Kintzel entered into a contract for the sale of the real estate to Hicks. This contract, too, contained an insurance clause, obligating Hicks to maintain insurance on the buildings and improvements as security for the amount due Kintzel. Hicks had not yet complied with this condition when, five days later, the buildings were damaged in the amount of $9457 by a severe windstorm. Hicks has a pending lawsuit against Kintzel, claiming an oral promise by the latter to continue the existing insurance until Hicks procured his own. That litigation, by stipulation, was deferred pending outcome of this case, and does not concern us here.

Nor are we concerned with the circumstances of the second contract sale from Kintzel to Hicks. A determination of the issues presented by this appeal must be reached solely from the provisions of the Proesch-Kintzel contract and the insurance policy issued by the defendant company to Kintzel.

Following the windstorm damage, Kintzel filed a timely proof of loss. After defendant denied liability, Kintzel started this action to compel payment under the policy provisions.

Defendant's answer alleged Kintzel's interest at time of loss was that of a creditor because of her later contract sale of the property to Hicks. The answer further alleged the contract was not in default and the security substantially exceeded the unpaid balance due under its terms. From these facts defendant asserted Kintzel could show no 'direct loss'--a term we shall examine later--and therefore she was not entitled to payment under the policy.

The Kintzel action was filed April 7, 1966. Defendant's answer was filed February 3, 1967. On February 23, 1967, Proesch conveyed the real estate to Hicks and assigned to him all interest in the Proesch-Kintzel contract of April 14, 1962, together with '* * * all causes of action that accrue or have accrued concerning said agreement (the land contract) and land above described * * *.'

On March 14, 1968, Hicks intervened in Kintzel's pending action against defendant. The petition of intervention asserted Hicks as Proesch's assignee was entitled to the insurance proceeds, to be credited on the balance due under the Proesch-Kintzel contract.

Summarizing the position of the parties as this cause proceeded to trial, Kintzel asserted a right to recover as the named insured in the policy. Hicks claimed he was entitled to payment as Proesch's assignee. Defendant insisted neither Kintzel nor Proesch, upon whose rights Hicks' claim depends, could show any 'direct loss' resulting from the windstorm, since both simply held title as security under their respective installment contracts and in each instance the remaining security was more than the indebtedness.

The trial court denied recovery to both Kintzel and Hicks, adopting defendant's theory that neither had sustained a 'direct loss' as required by the policy. We quote briefly from the trial court's conclusions:

'Plaintiff's petition should be dismissed by this Court for the reason that Insurance Policy No. 11347 issued by Defendant Wheatland Mutual Insurance Association was an indemnifying agreement protecting Plaintiff, Olive B. Kintzel, against any direct loss suffered by her under coverage of said policy and she suffered no such pecuniary and compensable loss * * *. By the same token, similar issues are raised in the petition of intervention filed by Intervenors Darrel D. Hicks and Marlene K. Hicks praying for judgment against the Defendant Insurance Association and said petition of intervention should also be dismissed * * *.'

The trial court leaned heavily on our early case of Davidson v. Hawkeye Ins. Co., 71 Iowa 532, 32 N.W. 514 (1887) as authority for this conclusion. See also McWilliams v. Farm and City Mutual Insurance Ass'n, 248 Iowa 233, 80 N.W.2d 320 (1957); 45 C.J.S. Insurance § 915(a), pp. 1009--1010; 44 C.J.S. Insurance § 224, at pp. 933--934.

We need not pursue the question as far as it concerns Kintzel, who did not appeal and as to whom the trial court's judgment is both final and binding.

This bring us to the only real issue before us--can Hicks recover as assignee of Proesch under the policy of insurance issued to Kintzel? Before discussing this matter, we reiterate this is a law action reviewable on assigned errors only. We of course limit our holding to the specific issues raised by the appealing litigants.

Hicks assigned three errors, two of which deal with alleged error in the trial court's denial of Kintzel's claim. These claimed errors may not be relied on by Hicks, and since Kintzel has not appealed, we disregard them.

The remaining assignment asserts error in finding Hicks could not recover as Proesch's assignee. This is the ground upon which Hicks must prevail, if he is to prevail at all.

I. First to be explored is the status and right of Proesch. If he was without remedy in these circumstances, he had nothing to assign to Hicks.

We refuse to adopt defendant's argument that Proesch could not in any event show a right under the policy. The designation of Proesch as owner and Kintzel as contract purchaser created the same relationship as if Proesch had been called mortgagee. We have several times said as much. Hatch v. Commerce Ins. Co., 216 Iowa 860, 249 N.W. 164, supplemented, 249 N.W. 824 (1933); Davidson v. Hawkeye Ins. Co., 71 Iowa 532, 32 N.W. 514 (1887). Cf. In re Bernhard's Estate, 134 Iowa 603, 112 N.W. 86 (1907). It is also apparent defendant intended such result. Otherwise we see no reason for naming Proesch at all. See 5 Couch on Insurance 2d §§ 29:67--:68, 29:103--:104, pp. 352--54, 338--90 (1960).

We therefore hold Proesch's status was the same as if he had been named as mortgagee in the policy. We further hold the policy terms afforded him an independent right to sue by including these terms as part of the contract of insurance:

'Loss or damage, if any, under this policy, shall be payable to the mortgagee (or trustee) (Proesch), named in this policy, as (his) interest may appear, and this insurance as to the interest of the mortgagee (or trustee) only therein, shall not be invalidated by any act or neglect of the mortgagor or owner (Kintzel) * * *.'

What was the 'interest' of Proesch referred to in the policy? As in almost all cases, it is not defined in that instrument. The extent and nature of that interest, of course, may be determined only under the terms of the sales contract.

Turning to the contract, the interest of Proesch is measured by the unpaid purchase price, reinforced by the buyer's obligation to keep the premises insured for the seller's benefit for not less than the unpaid balance of purchase price, 'for the further security for payment of the sums herein mentioned.'

Irrespective of the policy terms, our rule that a mortgagee, by a covenant or condition in the mortgage, may acquire an interest in a policy of insurance issued to the mortgagor, is applicable here by analogy.

We have held where a mortgagor covenants to maintain insurance for the benefit of the mortgagee, a policy of insurance held by him will inure to the benefit of the mortgagee as a matter of equitable right, regardless of whether the policy was in express terms payable to the mortgagee or not. Johnson v. Northern Minnesota Land & Investment Co., 168 Iowa 340, 150 N.W. 596 (1915); Heins v. Wicke, 102 Iowa 396, 71 N.W. 345 (1897).

In Johnson, supra, we said, 168 Iowa at 344, 150 N.W. at 598:

'(I)t is * * * settled that, where a mortgagor covenants to maintain insurance for the benefit of the mortgagee, then a policy of insurance held by him will inure to the benefit of the mortgagee as a matter of equitable right, regardless of whether the policy was in express terms payable to the mortgagee or not. (Citations.)'

The same rule was articulated in Winneshiek Mutual Insurance Association v. Roach, 257 Iowa 354, 132 N.W.2d 436 (1965); Central Nat. Bank & Trust Co. v. Simmer, 228 Iowa 784, 293 N.W. 460 (1940); and in First Trust Joint Stock Land Bank v. Duroe, 212 Iowa 795, 237 N.W....

To continue reading

Request your trial
32 cases
  • Board of Sup'rs of Linn County v. Department of Revenue
    • United States
    • Iowa Supreme Court
    • 22 February 1978
    ...status is the same as an original party plaintiff, unaffected by Linn County's lack of standing. Kintzel v. Wheatland Mutual Insurance Ass'n, 203 N.W.2d 799, 806 (Iowa 1973); Schimerowski v. Iowa Beef Packers, Inc., 196 N.W.2d 551, 555 (Iowa 1972); State ex rel. Turner v. Iowa State Highway......
  • Johnson v. CSAA Gen. Ins. Co.
    • United States
    • Oklahoma Supreme Court
    • 15 December 2020
    ...was not a transfer of the policy but a transfer of the right to receive payment). Cf . Kintzel v. Wheatland Mutual Insurance Association , 203 N.W.2d 799, 808, 65 A.L.R. 3d 1110 (Iowa 1973) ("the general rule that an assignment of the note and mortgage carries with it such rights as existed......
  • Ostrem v. Prideco Secure Loan Fund, LP
    • United States
    • Iowa Supreme Court
    • 10 January 2014
    ...but is “subject to all defenses to which the assignor is subject.” Red Giant, 528 N.W.2d at 533;see also Kintzel v. Wheatland Mut. Ins. Ass'n, 203 N.W.2d 799, 806 (Iowa 1973) (noting an assignment carries with it all rights, remedies, benefits incidental to the assigned thing); 6A C.J.S. As......
  • Conrad Brothers v. John Deere Ins. Co.
    • United States
    • Iowa Supreme Court
    • 19 December 2001
    ...of the insurance policy, an assignment is no longer regarded as a transfer of the actual policy. See Kintzel v. Wheatland Mut. Ins. Ass'n, 203 N.W.2d 799, 804-05 (Iowa 1973); Buege, 387 S.E.2d at 116. Instead, it is a transfer of a chose in action under the policy. See St. Paul Fire & Marin......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT