Montgomery v. Hart

• Decision Date: 27 October 1932
• Docket Number: 5 Div. 120.
• Citation: 144 So. 101,225 Ala. 471
• Parties: MONTGOMERY, SUPERINTENDENT OF BANKS, v. HART.
• Court: Alabama Supreme Court

144 So. 101

225 Ala. 471

MONTGOMERY, SUPERINTENDENT OF BANKS, v. HART.

5 Div. 120.

Supreme Court of Alabama

October 27, 1932

Appeal from Circuit Court, Tallapoosa County; W. B. Bowling, Judge.

Garnishment suit by H. H. Montgomery, as Superintendent of Banks liquidating the Bank of Camp Hill, against C. E. Wood and Marvin Wood, and claim by R. L. Hart. From a judgment for claimant, plaintiff appeals. Transferred from Court of Appeals.

Affirmed.

Albert Hooton, of Dadeville, for appellant.

James W. Strother, of Dadeville, for appellee.

THOMAS J.

The suit was upon a note with writ of garnishment in aid thereof to the United States Fire Insurance Company.

There was answer of said garnishee of the indebtedness or liability only for the amount of the policy insuring the building of one of the defendants that had been destroyed by fire suggesting a mortgagee as claimant of that sum by virtue of contract. That mortgagee, after notice, duly propounds his claim to the insurance moneys due under the policy.

There were many grounds of demurrer challenging the claim and the amended claim of said mortgagee. The important grounds were: That it is shown on the face of that pleading that claimant had no interest in or right to the funds that have been garnisheed; that said claim fails to show that the policy of insurance by which the funds involved in this suit were paid into court was assigned to claimant, or that it was made payable to him as mortgagee, as his interest appeared under such instrument.

The policy of fire insurance was and is a personal contract between the insurer and the insured, and not a contract in the sense that runs with the property [26 C.J. p. 17, § 1; p. 434, § 581]; and where different persons have different interests in the property, insurance taken by one in his own right and interest does not, in the absence of contract, express or implied, inure to the benefit of another of such persons. Shadgett v. Phillips & Crew Company, 131 Ala. 478, 483, 31 So. 20, 56 L. R. A. 461, 90 Am. St. Rep. 95; Miles v. Miles, 211 Ala. 26, 99 So. 187; Houston Canning Co. v. Virginia Can Co., 211 Ala. 232, 100 So. 104, 35 A. L. R. 912; Bell v. Barefield, 219 Ala. 319, 122 So. 318, 35 A. L. R. 40.

The evidence is without dispute that claimant Hart, as mortgagee, held the mortgage, note securing the same, and the policy of insurance for $500, ever since the same were executed and delivered to him as mortgagee and security of the loan; that it was all one contract, and that the note and mortgage have not been paid, and that a sum in excess of the amount of the insurance is still due and unpaid; that this transaction of loan and security and possession of the policy antedated the destruction of the property by fire and the issue of the garnishment.

There was an express contract between the mortgagor and the mortgagee that the former would support the security by the insurance in question. The delivery of the note and mortgage and the subsequent delivery of the insurance before the fire were an execution of that contract. There being no legal impediment to such contract, the delivery of the insurance invested the mortgagee with the equitable title thereto, though there was no written assignment accompanying the delivery. It is not controverted between Wood and Hart that such was the contract and the execution thereof. In the absence of contract provisions to the contrary, such assignment of insurance need not be in writing; a parol assignment of insurance is held sufficient by the general authorities. 26 C.J. p. 447, §§ 599, 600; p. 133, § 156. See Cosmopolitan Fire Ins. Co. v. Gingold, 3 Ala. App. 537, 544, 57 So. 266; Greene v. Republic Fire Ins. Co., 84 N.Y. 572; Vandegraaff v. Medlock, 3 Port. 389, 29 Am. Dec. 256. Though the policy of insurance and the note and mortgage are independent contracts, in a sense, both the witnesses testify that the agreement was for the insurance, in the first instance, to support the mortgage; thus this case is differentiated from Vandegraaff v. Medlock, supra.

The suit was brought and garnishment served on J. H. Rodgers on January 2, 1930, the date of the fire. The note and mortgage were of date of March 3, 1928, and the policy bore the date of January 18, 1929. According to the undisputed evidence the note, mortgage, and policy were respectively drawn and issued by J. H. Rodgers, the agent of the insurance company.

There is conflict in the evidence as to when the insurance was actually delivered to Hart; there is no conflict that in the original transaction entering into the loan and mortgage, the mortgagee required the mortgagor to "keep the property insured"; there is no conflict in the evidence that the agent of the insurance company took the acknowledgment of the mortgagor and subsequently issued the insurance policy in question, and that it was delivered to Hart before the fire; there is no conflict in the evidence that insurance required and agreed upon by the parties before the loan was consummated and as a part of that consideration. The evidence on these questions was a sufficient discharge of the burden of proof by the claimant, though the policy was executed (or bore date) and delivered at a subsequent date to that of the note and mortgage, and before the fire.

The original agreement and promise, or mutual assent of the parties, was a sufficient consideration to support the parol assignment [Moore v. Williamson, 213 Ala. 274, 104 So. 645 42 A. L. R. 981] that was shown to be made before the fire and before the garnishment. Central Bank & Trust Co. v. Alabama Broom & Mattress Co., 204 Ala. 410, 85 So. 738, and authorities. The promise was sufficient consideration on which to rest the delivery. Christie v. Dyer, 205 Ala. 572, 88 So. 668. Until that delivery of insurance the contract was executory in respects to the insurance and here pertinent. The true consideration may be shown by parol, except only the character thereof may not be changed. Moore v....