National Fire Insurance Company v. Eastern Building & Loan Association

• Decision Date: 22 January 1902
• Docket Number: 10,992
• Citation: 88 N.W. 863,63 Neb. 698
• Parties: NATIONAL FIRE INSURANCE COMPANY v. EASTERN BUILDING & LOAN ASSOCIATION. [*]
• Court: Nebraska Supreme Court

88 N.W. 863

63 Neb. 698

NATIONAL FIRE INSURANCE COMPANY v. EASTERN BUILDING & LOAN ASSOCIATION. ^[*]

No. 10,992

Supreme Court of Nebraska

January 22, 1902

ERROR from the district court for Douglas county. Tried below before KEYSOR, J. Reversed.

REVERSED AND REMANDED.

Lodowick F. Crofoot and Thomas Creigh, for plaintiff in error.

E. G McGilton and James McCabe, contra.

ALBERT C. DUFFIE and AMES, CC. concur.

OPINION

ALBERT, C.

At the time of the loss by fire, hereinafter mentioned, the residence of A. A. McKim was insured against loss or damage by fire in the National Fire Insurance Company. The policy contained a clause whereby the loss, if any, should be payable to the Eastern Building & Loan Association, mortgagee, as its interest might appear. On the 8th day of February, 1895, the residence was destroyed by fire. Both the insurance company and the loan association were notified of the loss, and within a few days thereafter the adjuster of the insurance company and one W. J. Trotter, representing the loan association, and the assured, McKim, met and adjusted the loss at the agreed sum of $ 435. Thereupon the adjuster drew a sight draft on the general agent of the insurance company for that amount, in favor of McKim and the association, which is as follows:

"No. 2362. GOTHENBURG, NEB. Feb. 21, 1895.

"Pay to the order of A. A. McKim, and the Eastern Building & Loan Association, four hundred thirty-five and no-100 dollars ($ 435) in full satisfaction for all claims or demands for loss or damage by fire. Value received, and charge to the account of policy No. 223833 of the National Fire Ins. Co. THEO. GARDNER, Adjuster.

"To FRED. S. JAMES, General Agent,

"174 La Salle Street, Chicago, Ill."

When the draft was drawn, but before delivery, McKim objected to its delivery to Mr. Trotter until the loan association should furnish him with a statement of his account with such association and with a release of the mortgage. Thereupon, by agreement of parties, the draft was deposited with one Lloyd, cashier of the local bank, to be held by him until the association and McKim could agree upon the division of the proceeds. The negotiations which followed between McKim and the association, relative to the share they should be paid, respectively, from said proceeds, extend over a considerable period. Pending those negotiations, it was agreed between Trotter and McKim, that Lloyd should present the draft for payment, and hold the proceeds until the division should be agreed upon. In pursuance of this plan, McKim indorsed the draft in his own behalf, and Mr. Trotter in behalf of his client, the loan association, and instructed Lloyd to present it for payment. Whereupon the draft was forwarded to the insurance company, and paid by it, and the proceeds credited to McKim and the loan association on the books of the said local bank. Afterward a division was agreed upon and McKim's share was paid to him, and the share of the loan association was paid to its attorney, Mr. Trotter. It appears that Mr. Trotter at the time had an account against the loan association for services rendered, and retained this money to apply thereon. Within a reasonable time, after learning of the facts, the loan association repudiated the act of Mr. Trotter in the indorsement and collection of the draft, and brought this action against the insurance company to recover the amount represented by said draft. At the close of the testimony, the defendant moved the court to direct a verdict in its favor. The motion was overruled. Thereupon a like motion was made by the plaintiff, which was sustained, and a verdict was rendered in accordance therewith, in favor of the plaintiff, for the full amount represented by the draft, with interest. From the judgment rendered on this verdict, the defendant prosecutes error to this court.

It is first urged that the court erred in overruling defendant's demurrer ore tenus. This demurrer was interposed after both parties had rested. The petition is long, and, as the case must be reversed, we think, on other grounds, it would serve no useful purpose to set out the petition at length in this opinion. It will suffice, perhaps, to say that had the demu...