Mosby v. Aetna Insurance Company
| Decision Date | 02 December 1920 |
| Parties | MARGARET MOSBY and CHARLES V. MOSBY et al. v. AETNA INSURANCE COMPANY, AMERICAN INSURANCE COMPANY, and FREDERICK ESSEN, Trustee, Appellants |
| Court | Missouri Supreme Court |
Appeal from St. Louis Circuit Court. -- Hon G. A. Wurdeman, Judge.
Reversed (with directions).
Leahy & Saunders for appellants.
(1) Under mortgage clause providing that the policy shall not be invalidated as to the mortgagee by the acts of the mortgagor and providing for subrogation of the insurer to the right of the mortgagee, on payment of the loss, the insurer, where the policy has been invalidated as to the mortgagor, is entitled to subrogation to the extent of the mortgage debt, on payment of the loss to the mortgagee. Hackett v. Ash, 72 So. (Ala.), 54; Traders Ins. Co. v. Race, 142 Ill. 343; Insurance Co. v. Martin, 151 Ind. 209; Allen v Fire Ins. Co., 132 Mass. 483; Canton Co-op. Bank v Ins. Co., 219 Mass. 135; Aetna Life Ins. Co. v. Fire Ins. Co., 98 Neb. 449; Hare v. Headley, 54 N.J.Eq. 548, 558; Badger v. Platts, 68 N.H. 224; Ulster County Savings Inst. v. Leake, 73 N.Y. 165; Moulton v. Ins. Co., 36 S.D. 344; Fire Ins. Co. v. Davis, 25 Tex. Civ. App. 343; Gillespie v. Ins. Co., 61 W.Va. 177; 4 Cooley's Briefs on Insurance (1 Ed.), p. 3916; Fire Ins. Co. v. Beffrey, 48 Minn. 12. (2) Under the provisions of the policies, that they were void if the interest of the insured by other than unconditional and sole ownership, or if the subject of the insurance be upon land not owned by the insured in fee simple, said policies were rendered void by the failure of respondent Margaret Mosby to disclose the interest of her husband in said property, when the policies were applied for. American Ins. Co. v. Barnett, 73 Mo. 367; Mers v. Franklin Ins. Co., 68 Mo. 131; Lochner v. Home Mutual Ins. Co., 17 Mo. 255; Koontz v. Hannibal Savings & Ins. Co., 42 Mo. 131; Ice & Power Co. v. American Fire Ins. Co., 196 Mo.App. 247; Holmes v. Kansas City, 209 Mo. 525; Turner v. Home Ins. Co., 195 Mo.App. 141; Genessee Falls Assn. v. Fire Ins. Co., 44 N.Y.S. 980; Schroedel v. Humboldt Fire Ins. Co., 158 Penn. 461. (3) Equity will reform a policy, upon parol evidence, only when the agreement really made between the parties, has not, through accident, mistake or fraud, been correctly incorporated in the written instrument; both agreement and mistake must appear by the clearest evidence, and the court will not supply an agreement that was never made. Tesson v. Atlantic Ins. Co., 40 Mo. 36; Grand Lodge v. Sater, 44 Mo.App. 453; Mead v. Westchester Fire Ins. Co., 64 N.Y. 455. (4) Had the decree in favor of respondents on the issue of reformation of the policies, been correct under the evidence and principles of equity, the finding of the court nevertheless should have been in favor of appellants because, by the clear weight and preponderance of the testimony in the case, it was shown that prior to the fire respondents conveyed their interest in the property to the Thieleckes. Chambers v. Chambers, 227 Mo. 284; Trabne v. Ins. Co., 121 Mo. 81; Dreher v. Aetna Ins. Co., 18 Mo. 135; Eddy v. Ins. Co., 21 Mo. 589; Wishart v. Gerhart, 105 Mo.App. 116; Roe v. Ins. Co., 78 Mo.App. 455; Loan Co. v. Brown, 59 Mo.App. 469; Mackey v. Basil, 50 Mo.App. 193; Marcus v. Ins. Co., 187 Mo.App. 136; Barnard v. Ins. Co., 27 Mo.App. 33. (a) Even a preponderance of the evidence is insufficient to overcome the effect of a notary's certificate of acknowledgement; the evidence sufficient for this purpose must be clear, cogent and convincing. Springfield Co. v. Donovan, 147 Mo. 630; Fifer v. McCarty, 243 Mo. 47; Webb v. Webb, 87 Mo. 541; Barnett v. Davis, 104 Mo. 555; Rust v. Goff, 94 Mo. 518. (b) Respondents' evidence showing an agreement to convey gave rise to a presumption that they executed a deed in conformity to such sale as in the usual course of business. Fitzgerald v. Barker, 85 Mo. 21; Fox v. Windes, 127 Mo. 511. (c) Possession of the instrument by the Thieleckes was shown, and such possession is prima-facie evidence of delivery. Pitts v. Sheriff, 108 Mo. 115; Scott v. Scott, 95 Mo. 308; Fontaine v. Boatmen's Savings Inst., 57 Mo. 561. (d) The conveyance of the property back to the respondents, after the loss, did not work a revivor. Marcus v. Ins. Co., 187 Mo.App. 136.
Fredrick H. Bacon for respondents.
(1) Subrogation is a doctrine of equity intended to enable fire insurance companies which have paid a loss caused by the wrongful act of a third party and for which the insured would have an action, to be substituted for the insured and recover the damages which might have been recovered by the insured. Being an equitable doctrine, courts will not enforce a claim for subrogation unless to do so would be equitable under the circumstances. Loewenstein v. Ins. Co., 227 Mo. 100; Traders' Ins. Co. v. Race, 142 Ill. 338; 5 Joyce on Insurance, sec. 3537; Pomeroy, Eq. Jur. (2 Ed.) sec. 1419, note. (2) The payment in this case of the insurance to the mortgagee was a payment in satisfaction of the debt, which was thereby extinguished. Loewenstein v. Ins. Co., 227 Mo. 124; Ins. Co. v. Ramsey, 76 Ore. 570, 149 P. 542, Ann. Cases, 1917B, 1132, L. R. A. 1916A. 556; Carpenter v. Ins. Co., 16 Pet. 495, 10 U. S. (L. Ed.) 1044; Cone v. Niagara F. Ins. Co., 60 N.Y. 619; Havens v. Germania Ins. Co., 135 Mo. 649; Home Ins. Co. v. Marshall, 48 Kan. 235, 29 P. 161; Graves v. Hampden Ins. Co., 10 Allen (Mass.) 281; Burton-Lingo Co. v. Patton, 15 N. M. 304, 107 P. 679, 27 L. R. A. (N. S.) 420. (3) In this case to enforce subrogation, and hold that the right of the mortgagors to have the insurance paid in satisfaction of the debt was lost, would be to enforce an unconscionable agreement. (4) The policies in question were issued payable to Margaret Mosby, instead of to her and her husband, because of a mutual mistake. It was the intention of the companies to make the policies payable to the owners of the property. The president of the Yeckel Agency Co. held a deed of trust on the property and also a certificate of title showing that the title to the property was in the name of Mosby and her husband jointly. Equity will correct a mistake whenever it is necessary to do so in the interests of justice. Hearne v. Marine Ins. Co., 20 Wall. 488; 1 Cooley's Briefs on Insurance, 855; Clem v. German Ins. Co., 29 Mo.App. 673; Balen v. Fire Ins. Co., 67 Mich. 179; Leitensdorfer v. Delphy, 151 Mo. 160; Smith v. Canning Co., 14 Mo.App. 522; Williamson v. Brown, 195 Mo. 313; Meek v. Hurst, 223 Mo. 688; Mfg. Co. v. Car Co., 210 Mo. 715. (5) There is nothing in this case to show that the plaintiffs are guilty of any laches. Bucher v. Hohl, 199 Mo. 330; Meriwether v. Overly, 228 Mo. 242; Spurlock v. Sproule, 72 Mo. 511. (6) There was no change of title which would violate the conditions of the policy. Terry v. Glover, 235 Mo. 544; Wimpey v. Ledford, 177 S.W. 302; Ulbrigh v. Stevenson, 237 Mo. 233; 2 Cooley's Briefs, 1742; Whitney v. American Ins. Co., 127 Cal. 464; Schaeffer v. Fire Ins. Co., 113 Iowa 652; Hogadone v. Fire Ins. Co., 133 Mich. 339; Humphrey v. Fire Ins. Co., 12 Fed. Cas. 883; Dean v. Equitable Fire Ins. Co., 7 Fed. Cas. 301; Brown v. Manufacturers' Ins. Co., 156 Mass. 587; Baldwin v. Phoenix Ins. Co., 60 N.H. 164; Home Fire Ins. Co. v. Collins, 61 Neb. 198; Walton v. Phoenix Ins. Co., 162 Mo.App. 316.
This is an appeal from a judgment of the St. Louis County Circuit Court (1) reforming two policies of fire insurance, and (2) canceling a deed of trust, and notes secured thereby, which had been executed by respondents.
Respondents are husband and wife, and in 1910 took title to a lot in Webster Groves as tenants by the entireties. In May, 1913, they executed a deed of trust upon this lot to secure a note for $ 2,300, payable to Henry Wood. Respondents secured from each of these appellants a policy of fire insurance for $ 1,500, each of which policies by its terms insured Margaret Mosby, alone, against loss by fire on the dwelling house on the lot in question. Each policy contained a clause making it payable to the mortgagee as his interest might appear. A part of the "standard mortgage clause" will be particularly referred to later in this opinion. The dwelling burned in February, 1915. Thereafter respondents brought this suit to reform the policies so that they would stipulate to insure both respondents as owners of the burned building and for judgment on the policies as reformed. Payment of the policies had also been refused by appellants, in so far as respondents were concerned, because of a claim that respondents had, without notice to appellants, conveyed the title to the property to third parties before the loss occurred. This, if true, was in violation of the policy contract and invalidated it as to the insured. Appellants paid Wood the amount of his notes and took an assignment of them.
The two questions of fact tried were (1) whether the issuance of the policies to Margaret Mosby as sole owner was the result of a mistake justifying reformation, and (2) whether a deed to Henry E. and Amy V. Thielecke, admittedly bearing the signatures of respondents, had actually been executed and delivered, as a conveyance, by respondents. The principal question of law briefed concerns the effect of the mortgage clause to which reference has been made. Appellants contend the evidence did not show a mistake entitling respondents to reformation of the policies; that the policy was void as to respondents under its provisions (1) because Margaret Mosby the insured named, was not the sole owner, and (2) was rendered void as to respondents because of the deed to the Thieleckes; and that since it was void as to respondents, they, appellants, are entitled to be subrogated to the...
To continue reading
Request your trial