Patten et al. v. Springfield F. & M. Ins. Co.
| Citation | 25 S.W.2d 1075 |
| Decision Date | 17 February 1930 |
| Docket Number | No. 4705.,4705. |
| Court | Court of Appeal of Missouri (US) |
| Parties | W.E. PATTEN AND R.T. POPLIN, RESPONDENTS, v. SPRINGFIELD FIRE & MARINE INSURANCE COMPANY, APPELLANT.<SMALL><SUP>*</SUP></SMALL> |
Appeal from Jasper County Circuit Court, Division 1. — Hon. R.H. Davis, Judge.
AFFIRMED.
McNatt & McPherson for appellant.
(1) Declaration of law number 3 requested by the defendant properly declared the law and should have been given. Under the form of loss payable clause attached to this policy, the mortgagee had no right not possessed by the insured, and if the policy was forfeited as to the insured, the mortgagee could have no claim against this defendant. Ford et al. v. Ins. Co., 298 S.W. 741; Berry v. Ins. Co., 298 S.W. l.c. 66-7-8-9; Kabrich v. Ins. Co., 48 Mo. App. 393; Kemph v. Ins. Co., 41 Mo. App. 27; Burns v. Ins. Co., 103 Kans. 803, 176 Pac. 985. (2) Declarations of law numbered 1 and 2 should have been given by the trial court. The law is that the insured must have an insurable interest in the subject-matter of the insurance at the time of the loss. This is a requirement that cannot be waived by the insurance company, and the insurance company is never estopped to assert such defense. Avery v. Ins. Co., 295 S.W. (Mo. App.) l.c. 512; White v. Ins. Co., 93 Mo. App. 282; Harness v. Ins. Co., 62 Mo. App. 243; Morrison's Admr. v. Ins. Co., 18 Mo. 262; 26 C.J., p. 66, note 33; 26 C.J., sec. 2, note 20; 1 Cooley's Briefs on the Law of Ins., p. 201. (3) The judicial foreclosure and sale of Poplin's equity of redemption divested him of all right, title and interest in the premises destroyed by fire. Therefore, having no further interest in the insured property, he could have no insurable interest therein. Under the provisions of secs. 2219-2232, R.S. 1919, Poplin had no right to redeem the foreclosed property at the time of the fire. While it is a rule of the law of insurance that an insurable interest in the mortgaged property exists in favor of the mortgagor so long as he has a right of redemption. 1 Colley's Brief on Ins., p. 186, to Joyce on Insurance (2 Ed.). Secs. 1038, 1039, it necessarily follows that upon expiration of the period of redemption from foreclosure sale, the title becomes absolutely in the purchaser and all interest in the mortgagor ceases. Essex Savings Bank v. Ins. Co., 4 L.R.A. 759; Reynolds v. Ins. Co., 60 Pac. 467. After foreclosure sale, but pending the enrollment of the decree and the execution of the deed, the mortgagor has no insurable interest in the subject of insurance which has been decreed foreclosed and ordered sold. McLaren v. Ins. Co., 5 N.Y. 151; Bacon v. Ins. Co., Rap. Jud. Jubeck 47 C.S. 74. (4) The appellant again insists that there was such a change in the interest and title of the insured as to forfeit the policy, by a conveyance under foreclosure from Poplin to Patten. On former appeal the court held otherwise, basing its opinion on the case of Russell v. Home Ins. Co., 262 S.W. 385, 45 A.L.R., p. 597.
A.G. Young and Howard Gray for respondents.
(1) The loss payable clause in the policy involved in this case made the fund "payable to the insured and W.E. Patten." The purchase of the property by W.E. Patten, the mortgagee, at a foreclosure sale, was not such a change in ownership as to invalidate the policy. Russell v. Home Ins. Co., 262 S.W. 385; Patten v. Springfield F. & M. Ins. Co., 11 S.W. (2d) l.c. 1106; 26 C.J. 236, sec. 290. (2) Granting for the purpose of argument, that a complete foreclosure proceeding would constitute such a change of title as to void the policy, the title did not pass from the insured to the mortgagee until March, 1928, while the fire occurred May 2, 1927, and at the time of the fire, the title was in Poplin. 41 C.J., p. 991, sec. 1443; Leach v. Koenig, 55 Mo. 451; Page v. Bettes, 17 Mo. App. 380; Blodgett v. Pearcy, 97 Mo. 263; Chaonia C.B. v. Sollars, 190 Mo. App. 284. (3) The knowledge of the agent Armstrong was the knowledge of the company, and appellant is estopped from claiming that it did not know that the foreclosure proceeding was pending. Sec. 6315, R.S. 1919; Parsons v. Ins. Co., 132 Mo. 583; James v. Ins. Co., 148 Mo. 12; Springfield v. Ins. Co., 151 Mo. 90; Ward v. Ins. Co., 244 S.W. 959; Ward v. Iowa State Ins. Co., 4 S.W. (2d) 895.
Action upon a fire insurance policy. Jury waived and trial by court who found for plaintiff for $850, the amount of the policy. Defendant appealed.
This is the second appeal in this case. The first is reported in 11 S.W. (2d) 1101. On the former appeal the judgment was reversed for certain errors relative to questions not now involved in this case.
Plaintiff, W.E. Patten, was formerly the owner of the west half of the southwest quarter of section 21, Township 22, Range 31, in McDonald county, Missouri, on which was located a farm residence and other buildings. In April, 1925, Mr. Patten sold and conveyed this land to R.T. Poplin, the other plaintiff in this case, and took back a deed of trust for $3000 to secure the unpaid balance of the purchase price. On June 18, 1925, the defendant issued the policy sued on for the sum of $850 on the dwelling house located on the above-described land. This policy was issued to R.T. Poplin as owner and had attached to it the following loss payable clause: "Loss, if any, to be adjusted only with the insured named herein and payable to the insured and W.E. Patten, Webb City, Missouri, or assigns as their respective interest may appear subject nevertheless to all the terms and conditions of the policy." The policy contained certain provisions which, if found to exist, would render the policy void, among which we need only mention the following: "... If any false statements are made in said application or otherwise that shall deceive the company to its injury; ... or upon the commencement of foreclosure proceedings; or in case any change shall take place in title or interest or possession (except by succession by reason of the death of the insured) of the property herein named."
The alleged facts relied on by defendant to defeat the recovery are false swearing by Poplin in the proof of loss; the commencement of foreclosure proceedings and change in title to the premises.
In the proof of loss Poplin had stated that he was the sole, absolute and unconditional owner of the property described except that W.E. Patten of Webb City, Missouri, held a mortgage on the farm for $3000. That was the absolute fact when the policy was issued but defendant contends that by reason of the mortgage having been foreclosed before the fire a change in title had taken place and on account of that fact this statement in the proof of loss was false and voided the policy. This defense rests on the ability of defendant to establish the other defenses of commencement of foreclosure proceedings and change of interest and title and since these other defenses are also urged it will not be necessary to pass on the question of the truth or falsity of the statement as to title in the proof of loss for if the defense as to change of title fails the defense of false swearing in the proof of loss fails with it.
This brings us to the defense of commencement of foreclosure proceedings and change of title. The facts relative to these defenses are as follows: Poplin had defaulted in the payment of interest due on the mortgage to Patten and Patten had undertaken to foreclose under the terms of the deed of trust by advertisement and sale. Patten then discovered that a transcript of a judgment against Poplin had been filed in McDonald county which would create a lien on this land. He then decided to abandon foreclosure by advertisement and under the deed of trust and commenced foreclosure proceedings by suit in the circuit court and to have his mortgage decreed a prior lien to the lien of the transcript judgment. This suit was filed April 28, 1926. Judgment for plaintiff as prayed was rendered August 24, 1926, and execution ordered. Execution was issued and levied on this land December 23, 1926. Sale under this execution took place February 7, 1927, and Patten, the holder of the mortgage and plaintiff in the suit, bid in the property for $100. Deed to him by the sheriff was not executed until January 9, 1928. In the meantime, to-wit, on May 2, 1927, the house covered by the policy in suit burned. Defendant denied liability and on July 25, 1927, tendered back the premium that had been paid.
It will be observed that at the time of the fire on May 2, 1927, the foreclosure proceedings had proceeded to judgment and sale under the judgment but the deed to the purchaser had not been executed. On these facts, defendant insists that the two provisions of the policy providing that it should be voided if foreclosure proceedings were begun or a change in title should occur have been violated and for these reasons the policy became void and there can be no recovery upon it. The reply to this contention is a plea of waiver. When the case was here before we held there was sufficient evidence on the question of waiver to take that question to the jury and since the court sitting as a jury found for plaintiff, we could only hold that he must have found that a waiver had taken place. The facts relied upon to show waiver are substantially as follows: The defendant company is a non-resident company authorized to do business in Missouri, and J.S. Armstrong was its recording agent at Pineville, Missouri. Mr. Armstrong had countersigned this policy and had delivered it and collected the premium. About the first of November, 1925, when an installment of interest was due and unpaid, Mr. Patten learned that Mr. Armstrong had purchased the crop of corn on this farm from Mr. Poplin and he went to see Mr. Armstrong about it and protested against his buying the crop without the interest being paid. Mr. Patten testified that in that conversation with Mr. Armstrong about November 1, 1925, he said to...
To continue reading
Request your trial