Mahler v. Milwaukee Mechanics' Ins. Co.

• Decision Date: 10 January 1934
• Docket Number: 196.
• Citation: 172 S.E. 204,205 N.C. 692
• Parties: MAHLER v. MILWAUKEE MECHANICS' INS. CO. et al.
• Court: North Carolina Supreme Court

172 S.E. 204

205 N.C. 692

MAHLER v. MILWAUKEE MECHANICS' INS. CO. et al.

No. 196.

Supreme Court of North Carolina

January 10, 1934

Appeal from Superior Court, Johnston County; Frizzelle, Judge.

Action by Alice R. Mahler against the Milwaukee Mechanics' Insurance Company and the Metropolitan Life Insurance Company. From an adverse judgment, defendant first named appeals.

Affirmed.

Cause of action on fire policy held chose in action which was subject of equitable transfer and assignment.

The agreed statement of facts is as follows:

"This action is now pending in the Superior Court of Johnston County, and the parties hereto desiring to waive a jury trial, agree upon the following facts and submit the same to the Judge holding the Courts of Johnston County for a judgment as may be just and proper:

"1. That on and prior to October 22, 1930, R. P. Holding was the owner of a tract of land containing about 119.86 acres lying and being in Selma Township, Johnston County and said lands were encumbered as follows:

"(a) A deed of trust securing the Metropolitan Life Insurance Company in the sum of $2,250.00, and said deed of trust is recorded in Book 167, page 69, of the Johnston County Registry.

"(b) A mortgage deed to Alice R. Mahler in the sum of $6,750.00, and this mortgage is recorded in Book 195 at page 202 of the Johnston County Registry.

"2. That Harvey Atkinson and wife on or about October 22, 1930, and prior thereto were owners of a tract of land of about 72 acres lying and being in Selma Township, Johnston County and said lands were encumbered, besides other mortgages and deeds of trust, by a mortgage from the said Harvey Atkinson and wife to Roger A. Smith, Jr., in the sum of $150.15 and was of record in Book 243, at page 137, Johnston County Registry.

"3. That on the 22nd day of October, 1930, said R. P. Holding and wife Maggie B. Holding conveyed to Harvey Atkinson and wife, Minnie S. Atkinson, the said 119.86 acres of land by deed, and the said Harvey Atkinson and wife Minnie S. Atkinson conveyed to R. P. Holding and wife Maggie B. Holding, a tract of land containing 72 acres, said tracts being the ones described in the paragraphs above. That the said 119.86 acres conveyed by Holding to Atkinson were encumbered by a deed of trust to Metropolitan Life Insurance Company, and by a second mortgage to Alice R. Mahler.

"4. That Roger A. Smith, Jr., on October 22, 1930, and prior thereto, as well as a long time thereafter, was a resident of Smithfield, Johnston County, State of North Carolina, and was duly authorized local agent of the Milwaukee Mechanics Insurance Company, which company was engaged during the times mentioned in writing fire insurance in the said County of Johnston.

"5. It is admitted that Roger A. Smith, Jr., duly authorized local agent of Milwaukee Mechanics Insurance Company had knowledge of the deed of trust to Metropolitan Life Insurance Company on the 119.86 acres and it is also admitted that Roger A. Smith, Jr., had knowledge that said property was encumbered by a second mortgage to Alice R. Mahler. That at the time of the trade of the lands between Harvey Atkinson and R. P. Holding as set out above, the said Roger A. Smith, Jr., was duly notified of the intention of the parties to make said trade and he knew the day on which the trade between the parties was finally consummated, to-wit, on October 22, 1930, this fact being admitted by said Roger A. Smith, Jr.

"6. That on the 22nd day of October, 1930, said R. P. Holding was insured for the benefit of the said Metropolitan Life Insurance Company upon the buildings situate on the 119.86 acres, and after the trade was made by the said assured and Harvey Atkinson and wife, the said Roger A. Smith, Jr., was notified as agent to change the assured on his policy then in force from R. P. Holding to Harvey Atkinson and wife, Minnie S. Atkinson, but the said agent failed to make said change. That said policy expired on November 8th, 1930. That some time between the 10th day of October, 1930, and the 3rd day of November, 1930, Roger A. Smith, Jr., agent for the Milwaukee Mechanics Insurance Company wrote policy No. 13 of said company insuring said buildings in the name of R. P. Holding, although said R. P. Holding was not the owner of said property after October 22nd, 1930, as the said Roger A. Smith, Jr., knew and he knew that the said Harvey Atkinson and wife, Minnie S. Atkinson were the owners of said property after October 22nd, 1930, subject to the encumbrances against said property as set out in paragraph 5 hereof. That said policy is attached hereto and made a part of the agreed statement of facts. That said policy insured the buildings on said property from November 8th, 1930, at noon, to November 8th, 1931, at noon. That said policy was forwarded to the Metropolitan Life Insurance Company at Raleigh, N. C.; that the premium on said policy was not paid to Roger A. Smith, Jr., by anyone.

"7. That on the 31st day of October, 1930, the Metropolitan Life Insurance Company for the first time was informed by R. P. Holding that he did not own said lands and was informed that the said Harvey Atkinson and wife, Minnie S. Atkinson, were the owners of same and were informed by the said R. P. Holding that he had notified Roger A. Smith, Jr., agent for the Milwaukee Mechanics Insurance Company of said change of ownership by letters as follows:

"'Smithfield, N.C. October 31, 1930. Mr. A. T. Dixon, Manager, Carolina Branch Office, 131 South Salisbury Street, Metropolitan Life Insurance Co., Raleigh, N. C.-- Dear Mr. Dixon: Loan BO-226. You will please find enclosed herewith check for $135.00 to cover interest on the Alice and J. E. Mahler mortgage loan to November 1st, 1930. Several days ago I received a letter from your office with reference to the insurance on the buildings of this farm expiring November 8th, 1930, I wish to advise that I have traded my equity in this farm to Mr. Harvey Atkinson, Smithfield, N. C., RFD#2, and I have so advised Mr. Roger A. Smith, Jr., who issued the policy in this connection. Please send future notices of interest payment to Mr. Atkinson, as I have no further interest in the farm. Yours very truly, R. P. Holding. Copy to Mr. J. E. Mahler, Smithfield, N. C.'

"8. That said policy was received by Metropolitan Life Insurance Company some time between October 10th and November 3rd 1930. That said Metropolitan Life Insurance Company did not notify Roger A. Smith, Jr., or the Milwaukee Mechanics Insurance Company of the contents of the letter which it had received from said R. P. Holding as set out above. That said policy had attached to it a New York Standard Mortgagee's clause in favor of the Metropolitan Life Insurance Company, with loss payable to it as mortgagee, a copy of said loss payable clause being hereto attached and made a part of the agreed statement of facts.

"9. That on the 24th day of December, 1930, while said policy was in force the building described in said policy as a barn was totally destroyed by fire and on or about January 5th, 1931, the building described as dwelling #1 was totally destroyed by fire, and that the loss had been appraised at $400.00 for the barn and $1278.22 for the dwelling and all parties agree that this is a fair appraisal of said loss and if liability exists under this policy that the loss be fixed at this amount, with interest from November 15, 1931.

"10. That Alice R. Mahler has been assigned all right, title and interest in said policy and in any right of action upon the same for the loss of said property by R. P. Holding, Harvey Atkinson and wife, Minnie S. Atkinson.

"From the foregoing statement of facts the plaintiff Alice R. Mahler contends that she is entitled to receive from the Milwaukee Mechanics Insurance Company the sum of $1678.22 with interest from November 15, 1931, the said sum to be impressed with the trust in favor of the Metropolitan Life Insurance Company, and the defendant Metropolitan Life Insurance Company contends it is entitled to said amount by virtue of a New York Standard Mortgagee's clause in its favor attached to said policy, and the Milwaukee Mechanics Insurance Company contends that it is not liable to the plaintiff or the Metropolitan Life Insurance Company for that the plaintiff claims only as assignee of R. P. Holding and Harvey Atkinson and wife (see assignment attached to complaint); and as the assignors cannot recover, the assignee cannot recover; that the Metropolitan Life Insurance Company cannot recover for that under the New York Standard Mortgagee Clause attached to the policy (see provision set out in answer of Insurance Company) it was the duty of the said Life Insurance Company to notify the Fire Insurance Company of the change of ownership."

The judgment of the court below is as follows: "This cause having been submitted to the undersigned Judge upon an agreed statement of facts and with written stipulations that judgment upon the said agreed statement of facts might be rendered out of term and out of the District, the said undersigned Judge having taken the said agreed statement of facts under advisement and given the same full and careful consideration the contentions of the parties to the action as set out in briefs filed by each of said parties and the Court being of the opinion that plaintiff is entitled to recover upon her cause of action: It Is Therefore Considered, Ordered and Adjudged that Alice R. Mahler, plaintiff, recover of the Milwaukee Mechanics Insurance Company one of the defendants the sum of $1678.22, with interest from November 15, 1931, until paid. It is further considered, ordered and adjudged that the said sum of money is impressed with a lien in favor of the Metropolitan Life Insurance...