Loewenstein v. Queen Insurance Company

• Decision Date: 30 March 1910
• Citation: 127 S.W. 72,227 Mo. 100
• Parties: SAMUEL M. LOEWENSTEIN, Appellant, v. QUEEN INSURANCE COMPANY et al
• Court: Missouri Supreme Court

127 S.W. 72

227 Mo. 100

SAMUEL M. LOEWENSTEIN, Appellant, v. QUEEN INSURANCE COMPANY et al

Supreme Court of Missouri

March 30, 1910

Editorial Note:

This Pagination of this case accurately reflects the pagination of the original published, though it may appears out of sequence.

Appeal from St. Louis County Circuit Court. -- Hon. John W McElhinney, Judge.

Reversed and remanded (with directions).

Lee Sale for appellant.

(1) Where the owner of mortgaged property at his own expense insures his property for the joint benefit of himself and the holder of the mortgage, and the property is destroyed while the policy is in force and effect as to the interest of both mortgagor and mortgagee, and the insurance is paid to the mortgagee, equity will not subrogate the insurance company to the rights of the holder of the mortgage. Sheldon on Subrogation, sec. 236, p. 353; 19 Cyc. 893; 2 May on Ins sec. 450, p. 1070; Ins. Co. v. Race, 142 Ill. 338; Kernochan v. Ins. Co. 17 N.Y. 428; Pearman v Gould, 42 N.J.Eq. 4; Graves v. Ins. Co., 10 Allen 281; Wolcott v. Sprague, 55 F. 545; Havens v. Ins. Co., 135 Mo. 649. (2) Any money paid to the mortgagee under the provisions of the policy must be applied in payment of these notes. 27 Am. and Eng. Ency. Law, 264; Dick v. Ins. Co., 10 Mo.App. 376, 81 Mo. 103; Home Ins. Co. v. Marshall, 48 Tex. 235. (3) Inasmuch as the answer shows that the property insured (real estate) was wholly destroyed by fire while the policies were in full force and effect, and there is no stipulation in either policy that a forfeiture should result from a failure to furnish proofs, the inquiry as to whether proofs of loss were furnished was immaterial. Dezell v. Fidelity & Casualty Co., 176 Mo. 253; Ostrander on Fire Insurance, sec. 233; Germania Ins. Co. v. Ashby, 112 Ky. 303; Continental Casualty Co. v. Waters, 97 S.W. 1103; Thaxton v. Ins. Co., 143 N.C. 33; Wolcott v. Sprague, 55 F. 545; Kahnweiler v. Ins. Co., 57 F. 562. (4) The conduct of the adjuster (who represented not only the companies holding policies on the real estate, but also the company holding a policy on the household effects) towards the insured and his attorney, in refusing to accept proofs of loss on the household effects from February 13th (the date they were furnished) until May 16th, during which period he was claiming a breach of the provision of the policies in respect to the use of gasoline, constituted a waiver of proofs of loss in respect to the real estate. Gale v. Ins. Co., 33 Mo.App. 664; Summers v. Ins. Co., 45 Mo.App. 46; Landrum v. Ins. Co., 68 Mo.App. 339; Dezell v. Fidelity & Casualty Co., supra. (5) If, as is held in many cases, there was a duty resting upon the mortgagee, Farrar, or a right in him, to make proofs of loss, where the mortgagor failed to do so, payment to the mortgagee without proofs was a waiver of proofs of loss. Lombard Investment Co. v. Ins. Co., 62 Mo.App. 315; Union Institution v. Ins. Co., 81 N. E. (Mass.) 994; Nickerson v. Nickerson,, 80 Me. 100; Southern Loan Assn. v. Ins. Co., 94 Ga. 167; Wolcott v. Sprague, 55 F. 545. The testimony of Farrar, showing that the adjuster took out of his hands the matter of furnishing proofs, coupled with the adjuster's own testimony that he told Farrar that there was no way in which he (Farrar) could be beaten out of his interest in the policies, shows a waiver of proofs. See cases cited under foregoing points. (6) The holder of the second mortgage, as a cerditor of the assured having a lien on the property, had a right himself to make proofs of loss in a proper proceeding, if the assured failed or refused to do so. Ins. Co. v. Atkins, 3 Bush (Ky.) 328; Reid v. Mercurio, 91 Mo.App. 673. Hence, the conduct of the adjuster (as shown by his own testimony) in allowing plaintiff to be misled as to the company's intentions in reference to the loss, although he knew that plaintiff represented the holder of the second mortgage, should estop defendants from claiming as against plaintiff (who acquired title under that deed of trust) that proofs of loss were not furnished. Maddox v. Ins. Co., 39 Mo.App. 198; McCullom v. Ins. Co., 67 Mo.App. 66. (7) The conduct of the adjuster (as shown by plaintiff's testimony) inducing plaintiff, who called to see him frequently between the date of the fire and the date when proofs of loss were required to be furnished, to believe that the loss on the real estate would be paid, should estop defendants from claiming against plaintiff that proofs of loss were not furnished. (8) Plaintiff having acquired title at public sale on June 14, 1902, and the claim of subrogation having been concealed from plaintiff by the adjuster and only asserted on or about July 1, 1902, equity will not decree subrogation as against plaintiff. Sheldon on Subrogation, sec. 44, p. 68.

Barclay & Fauntleroy and P. H. Cullen for respondents.

(1) Where the owner of mortgaged property procures insurance pursuant to a provision requiring the mortgagor to insure and the insurance policies are payable to the mortgagee as his interest may appear, under such a "mortgagee clause" as is here involved, wherein it is provided that no default of the mortgagor can defeat the insurance, as to the mortgagee only, and if the mortgagor (the insured) fails to comply with the policy, upon payment to the mortgagee of the mortgage debt, the insurer is entitled to be subrogated to the mortgagee's right, as the policy provides. Ins. Co. v. Allen, 43 N.Y. 389; Foster v. Van Reed, 70 N.Y. 19; Savings Co. v. Leake, 73 N.Y 161; Badger v. Platt, 44 A. 296; Ins. Co. v. Davis, 23 Tex. Civ. App. 342. The parties are competent to contract for subrogation (as is done here), where policy is not complied with by mortgagor, and the courts will enforce the contract. Gillespie v. Ins. Co., 61 W.Va. 169; Allen v. Ins. Co., 132 Mass. 480, distinguishing Graves v. Ins. Co., 10 Allen 281. The "stipulations" and provisions of the policy for subrogation, are a "part of the consideration" supporting the contract and will be enforced. Sav. Inst. v. Leake, 73 N.Y. 166; Shapiro v. Ins. Co., 53 N.W. 463; Day v. Ins. Co., 23 Barb. 623; Ostrander on Ins., pp. 255, 256. (2) None of the cases cited by appellant under (1), is in point here -- none of them had, or involved, the "mortgagee clause," such as is involved in this action. All of appellant's cases are simply cases where the loss was payable to some mortgagee, without any provision for subrogation, such as we have. (3) Section 7969, R. S. 1899, in regard to valued policies, was enacted prior to 1889 and was carried into the revision of 1889 as section 5897. Construing this section, in connection with the policy requirements as to proofs of loss, the courts of this State have, without exception, held that the furnishing of proofs of loss to the insurer is a condition precedent, and a failure to comply therewith prevents recovery. McCullough v. Ins. Co., 113 Mo. 13; Burnham v. Ins. Co., 75 Mo.App. 400; Sullivan v. Ins. Co., 89 Mo.App. 112; Leigh v. Ins. Co., 37 Mo.App. 542; Bank v. Ins. Co., 109 Mo.App. 658; Roberts v. Ins. Co., 94 Mo.App. 142; Loesch v. Ins. Co., 176 Mo. 664; Sims v. Ins. Co., 47 Mo.App. 54; Hazzard v. Co., 53 Mo.App. 98; Hanna v. Co., 36 Mo.App. 538. (4) Under our statutes, which make it necessary for the insurance company to furnish blank proofs of loss, when the blank proofs are furnished to the insured, they become conditions precedent, and if not returned properly filled out, within the sixty days, the policy becomes void. Warren v. Ins. Co., 72 Mo.App. 190; Sappington v. Insurance Co., 77 Mo.App. 270. Failure to render these proofs precludes recovery on the policy, notwithstanding the valued policy statutes. McCollum v. Ins. Co., 67 Mo.App. 78; Reid v. Mercurio, 91 Mo.App. 687. (5) Under the provisions of the policies involved in this suit, preventing any act of the mortgagor from in any way invalidating the insurance as to Farrar, the trustee, only, the payment to Farrar constituted no waiver of the proofs. Burnham v. Ins. Co., 75 Mo.App. 399; Adams v. Ins. Co., 115 Mo.App. 21. (6) Where the assured fails to make proofs and the mortgagee submits proofs the assurer may reject these, the duty of furnishing the same being on the mortgagor, who is the insured. Armstrong v. Ins. Co., 130 N.Y. 560; Sims v. Ins. Co., 47 Mo. 60; Hicks v. Ins. Co., 6 Mo.App. 259; Ins. Co. v. Shrader, 33 S.W. 585. (7) Where the facts are undisputed about furnishing proofs of loss, the question of waiver becomes one of law, not of fact. Hanna v. Ins. Co., 36 Mo.App. 539; Pretzfelder v. Ins Co., 28 Ins. Law Jour., 169; Parmalee v. Ins. Co., 54 N.Y. 196; Brim v. Ins. Co., 111 Ind. 281; Waters v. Ins. Co., 30 S.W. 577. (8) The claim made in points 4, 5, 6, and 7 of appellant's brief, must fail, for the reason that there are no facts set up in the petition or reply, which make any claim, or show any reason why the principle of estoppel should be asserted by plaintiff, or which should preclude the defendant from insisting upon the forfeiture of the policy, for the reason no proofs of loss were made. The facts which go to create an estoppel in pais must be set forth "with certainty." Bank v. Doran, 109 Mo. 40 (and this is true in equity); Noble v. Blount, 77 Mo. 235; Hammerslough v. Cheatham, 84 Mo. 13; Bray v. Marshall, 75 Mo. 327; Golden v. Hardesty, 61 N.W. 914. We understand that, in the usual and ordinary "insurance cases," under an allegation of performance you can show facts establishing a waiver of the performance of the terms and conditions of a policy of insurance, but this is confined exclusively to insurance cases where the suit is on the policies, for the recovery of the money. Even then there must be the usual allegations that all conditions precedent were "duly performed," so as to...