Pennsylvania Co. for Insurance on Lives and Granting Annuities v. Aachen & Munich Fire Ins Co.
| Decision Date | 14 April 1919 |
| Docket Number | 5700. |
| Citation | 257 F. 189 |
| Parties | PENNSYLVANIA CO. FOR INSURANCE ON LIVES AND GRANTING ANNUITIES v. AACHEN & MUNICH FIRE INS. CO. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Stern & Wolf, of Philadelphia, Pa., for plaintiff.
Horace M. Schell, of Philadelphia, Pa., for defendant.
The plaintiff sues upon a policy of fire insurance issued by the defendant to Hortense L. Becker for $3,500. The plaintiff was the holder by assignment of a mortgage for $4,000 upon the premises, and the policy was transferred to it on September 19, 1917, at which date there was added to the policy what is known as the standard mortgagee clause, which provided that the loss be payable to the plaintiff 'as assignee of mortgagee, as interest may appear, and this insurance, as to the interest of the mortgagee only therein, shall not be invalidated by any act or neglect of the mortgagor or owner of the within described property.'
On October 17, 1917, the insured premises were damaged by fire to an amount admitted by the affidavit of defense to be $3,425. Proof of loss, as provided by the policy, was not filed by the insured within 60 days from the date of the fire, viz., by December 15, 1917, but proof of loss in proper form by the assured, Hortense L. Becker, was filed with the defendant on January 5, 1918.
The affidavit of defense sets up the following defenses:
(1) That the policy contains what is known as the '100 per cent.' insurance clause, by which it is 'made a condition of this contract that this company shall be liable for no greater proportion of any loss than the amount hereby insured bears to 100 per cent. of the actual cash value of the property described herein at the time when such loss shall happen.'
The defendant avers that the actual cash value of the property at the time of the fire was the sum of $12,000, that the loss did not exceed the sum of $3,425, and that therefore the total amount for which the defendant would be liable, if liable at all, would not exceed 7/24 of the actual loss, or $990.07.
(2) That the defendant is not liable, because Hortense L. Becker the insured, did not, in accordance with the terms of the policy, furnish a proof of loss within 60 days after the date of the fire; that as to the mortgagee the policy contained the following clause:
'Upon failure of the insured to render proof of loss, such mortgagee shall, as if named as insured hereunder, but within 60 days after such failure, render proof of loss, and shall be subject to the provisions hereof as to appraisal and time of payment and of bringing suit.'
The defendant denies that the notice required by the policy of insurance was given to defendant, and hence the defendant is not liable.
(3) In a supplemental affidavit of defense, the defendant avers that it is not liable because the plaintiff failed to comply with the clause of the policy which is as follows:
The defendant avers that it demanded an appraisement, and an appraisement agreement was duly entered into between Hortense L. Becker, the insured, and the defendant; that an appraiser was appointed on behalf of the defendant, and one on behalf of the assured; that the appraiser appointed by the assured declined to accept as umpire any persons suggested by the appraiser appointed by the defendant; that the defendant thereupon presented its petition to the court of common pleas of Philadelphia county for the appointment of an umpire, and that thereupon the court appointed an umpire in the said matter, whereupon the appraiser appointed by the assured withdrew from the appraisal, and no appraisal has ever been made, and, as a consequence thereof, this suit is prematurely brought, and the defendant is not liable.
As to the first defense, it is contended by the plaintiff that the failure to cause the property to be insured to its alleged full value of $12,000 is expressly excepted as a defense against the mortgagee by the provisions of the mortgagee clause that the insurance as to the interest of the mortgagee shall not be invalidated by any act or neglect of the mortgagor or owner.
The plaintiff relies upon a line of cases interpreting the standard mortgagee clause in fixing the liability of the insurer, as compared with 'the old indorsement which made the mortgagee a simple appointee of the mortgagor, and put his indemnity at the risk of every act or neglect of the mortgagor that would avoid the original policy in his hands. ' Syndicate Insurance Co. v. Bohn, 65 F. 165, 12 C.C.A. 531, 27 L.R.A. 614 (C.C.A. 8th Circuit). In that case Judge Sanborn, in delivering the opinion of the court, said:
'Our conclusion is that the effect of the union mortgage clause, when attached to a policy of insurance running to the mortgagor, is to make a new and separate contract between the mortgagee and the insurance company, and to effect a separate insurance of the interest of the mortgagee dependent for its validity solely upon the course of action of the insurance company and the mortgagee, and unaffected by any act or neglect of the mortgagor, of which the mortgagee is ignorant, whether such act or neglect was done or committed prior or subsequent to the issue of the mortgagee clause.'
In that case the mortgagee...
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