Merchants’ Ins. Co. v. Shults

• Decision Date: 17 May 1899
• Citation: 8 Kan.App. 798,57 P. 306
• Parties: MERCHANTS’ INS. CO. v. SHULTS.
• Court: Kansas Court of Appeals

57 P. 306

8 Kan.App. 798

MERCHANTS’ INS. CO. v. SHULTS.

Court of Appeals of Kansas, Southern Department, Eastern Division

May 17, 1899

Syllabus

An agency created by the applicant for a real-estate loan, in a written application and contract with the agents of the prospective mortgagee, whereby such agents were to procure fire insurance on the buildings upon the premises to be mortgaged, is held to have been revoked by the subsequent execution and delivery to such agents of a mortgage conforming to the application and contract, where the mortgage contained a provision binding the mortgagor to procure and maintain insurance for the protection of the mortgagee in the amount stated in the loan contract, and where such provision was fully complied with before the execution and the delivery of the mortgage. And where notice of the cancellation of an insurance policy subsequently written, to take the place of a portion of the original insurance, was given to such agents and to their subagent who procured the application and contract for the loan, and who, as the agent of the insurance company, had written the policy attempted to be canceled, held, that such notice was ineffectual to relieve the company from its liability under the policy for a total destruction by fire of the insured property.

Error from district court, Anderson county; A. W. Benson, Judge.

Action by Jefferson Shults against the Merchants’ Insurance Company. Judgment for plaintiff. Defendant brings error. Affirmed.

Cates & Shinn, for plaintiff in error.

L. H Johnson and T. J. Hudson, for defendant in error.

OPINION

MILTON, J.

In this action the defendant in error obtained a judgment against the plaintiff in error in the sum of $1,133.83, the face value of an insurance policy, the interest thereon, and a further judgment for $90 as an attorney’s fee. The case was tried in Anderson county on a change of venue. It appears that in March, 1893, Johnson Bros. & Browning were engaged in a mortgage-loan business at Yates Center, where Browning was also the local agent for a number of insurance companies including the plaintiff in error. The firm acted as soliciting agents to procure applications and contracts for mortgage loans for Angell Mathewson & Co., of Parsons, who were the state agents of the Mutual Benefit Life Insurance Company. In March, 1893, Jefferson Shults, through the agency of Browning, made application to Mathewson & Co., for a loan of $4,500, and executed a written contract, in part as follows: "To Angell Mathewson & Co., Parsons, Kansas: I hereby appoint you my agent and my attorney to negotiate for me a loan of $4,500 for 5 years, with $3,300 insurance, and with interest at 7½ per cent. per annum, payable semiannually, to be secured by mortgage or mortgages, of form required by you, upon the following real estate, situate in Woodson county, Kansas." The contract and application were forwarded by Browning to Mathewson & Co., who accepted the same, and prepared a mortgage accordingly, which was on the 18th day of April thereafter executed and acknowledged by Shults and wife before Browning, as a notary public. The mortgage was for $4,500, and the Mutual Benefit Life Insurance Company was the grantee therein. The instrument was filed for record on the day of its execution, and on June 16th thereafter the grantee therein duly executed a release thereof, which release was filed for record on the 4th day of the following August. The mortgage contained a clause whereby the mortgagors agreed to procure and maintain insurance on the buildings upon the mortgaged premises to the extent of $3,300, with the loss, if any, payable to the mortgagee. On the day the contract for the loan was executed by Shults, he was informed by Browning that the latter could write the insurance...