Pearman v. Gould

• Citation: 42 N.J.E. 4,5 A. 811
• Parties: PEARMAN v. GOULD and others.
• Decision Date: 23 September 1886
• Court: New Jersey Court of Chancery

5 A. 811

42 N.J.E. 4

PEARMAN

v. GOULD and others.

Court of Chancery of New Jersey.

September 23, 1886.

Bill to quiet title. On final hearing on pleadings and proofs.

J. F. Cahill, for complainant.

J. S. Barkalow, for defendants.

RUNYON, Ch. This suit is brought under the act "to compel the determination of claims to real estate in certain cases, and to quiet the title to the same." The complainant purchased from Richard Van Ess a lot of land upon which were a dwelling-house and barn. The property was conveyed to him by warranty deed dated April 26, 1882. Van Ess got his title from Mary Beebe, who, with her husband, conveyed to him by deed dated March 1, 1882. She got her title from Albert A. Van Voorhies, late sheriff, by deed dated February 21, 1882, under foreclosure proceedings upon a second mortgage held by her upon the property. The premises were owned in 1872 by John Koman, who, on the fourth of April in that year, gave a mortgage thereon (the first mortgage) for $1,000, and interest, to Thomas Gould. The complainant's title, it will be seen, is derived from the sale under foreclosure of the second mortgage. In 1880 (before the foreclosure) Harriet Pearsall owned the property. She conveyed it by deed dated March 3d, in that year, to Catherine Coleman, who was the owner of it when the foreclosure took place. On the twelfth of August, 1881, (the foreclosure sale did not take place until February 7, 1882,) the German-American Insurance Company of New York issued a policy of insurance to Catherine Coleman against loss or damage by fire upon the dwelling-house and barn and chattels, for one year, for $2,000. By the terms of the policy the loss, if any, was to be payable, first, to Thomas Gould, and, second, to Mary Beebe, (the two mortgagees,) as their mortgage interests might appear. The policy was delivered to Mr. Gould, the holder of the first mortgage, and was held by him until and after February 10, 1882, the day on which the foreclosure sale took place. In the morning of that day (the sale took place in the afternoon) the house was destroyed by fire. The complainant, as before stated, bought the property April 26, 1882, about two months after the fire. Mrs. Coleman made proof of loss on or about the eighteenth of February, 1882, about eight days after the fire. On the eighteenth of July, 1882, the company, through Elias Osborne, its agent and trustee in the matter, obtained from Mr. Gould an assignment of his mortgage in consideration of the payment by it to him of the whole amount then due thereon for principal and interest, and received the mortgage and the bond and policy from him accordingly. Mr. Osborne took the assignment in his name, but in trust for the company.

The bill, alleging that the Gould mortgage was paid off by the company with the money due under the policy, prays a decree against Gould and Osborne and the company, declaring that they and each of them have no estate, interest, or right in or to the property. In fact, the suit is brought to compel the company to cancel the mortgage upon the ground that it ought to have paid the insurance money, in which case part of it would have gone to the satisfaction of the Gould mortgage. The company insists that the complainant, who bought the property after the fire subject to the Gould mortgage, would have no claim to the application of the insurance money, if any were due; and it also insists that no money is recoverable upon the policy on the ground that in 1880, before the policy was issued, the property was sold and conveyed, under a judgment against Catherine Coleman, to one Bridget Ann Coleman, who thenceforward, until the sale, was the owner thereof, (so that the company insists Catherine Coleman did not own the property when the policy was issued;) and that on February 10, 1882, after the policy was issued, the property was again sold under the foreclosure proceedings to Mrs. Beebe; whereas, the policy provides that immediately upon the passing or entry of a decree of foreclosure, or upon a sale under a deed of trust, or levy under execution, or if the insured shall be adjudged a bankrupt, or if the property insured shall be assigned under any bankrupt or insolvent laws, or if any change shall take place in the title or possession of the property, whether by sale, transfer, conveyance, legal process, or judicial decree, or if the policy before loss shall be assigned without the consent of the company indorsed thereon, or if the assured shall not be the sole, absolute, and unconditional owner of the property, then, and in every such case, the policy shall be void. The company defends upon the further ground that the policy provides that, in any case, there shall be no liability on the part of the company unless suit be brought within one year from the time of making proof of loss, and the company alleges that no suit was in fact brought upon the policy within one year from February 18, 1882, when the proof of loss was made. There is proof that, by a recent decree of this court, made September 7, 1885, the deed to Bridget Ann Coleman was, with the judgments, execution, and levy on which it was founded, set aside, annulled, and declared void; and it appears by the foregoing statement of facts that the house was destroyed by fire before the sale under the foreclosure. The complainant also offers evidence that an agent (now deceased) of the company in Paterson, after the proof of loss, promised to pay the loss. He insists that he is entitled to a decree declaring the mortgage satisfied. The company denies that the agent referred to had any authority to bind it to pay the loss.

The company obtained the Gould mortgage by purchase thereof from Gould for the amount of the principal and interest due...