People's Sav. Bank v. Retail Merchants' Mut. Fire Ins. Ass'n of Iowa

• Decision Date: 23 November 1909
• Citation: 123 N.W. 198,146 Iowa 536
• Parties: PEOPLE'S SAVINGS BANK v. RETAIL MERCHANTS MUTUAL FIRE ASSOCIATION OF IOWA, Appellant
• Court: Iowa Supreme Court

123 N.W. 198

146 Iowa 536

PEOPLE'S SAVINGS BANK v. RETAIL MERCHANTS MUTUAL FIRE ASSOCIATION OF IOWA, Appellant

Supreme Court of Iowa

November 23, 1909

REHEARING DENIED, WEDNESDAY, MARCH 16, 1910.

Appeal from Polk District Court.--HON. JESSE A. MILLER, Judge.

ACTION to recover for a loss under a fire insurance policy taken out by the mortgagor with a clause attached making the loss payable to plaintiff as mortgagee. There was a directed verdict for the plaintiff, and, from judgment on such verdict, defendant appeals.

Affirmed.

Dunshee & Haines, for appellant.

N. T Guernsey, for appellee.

OPINION

MCCLAIN, J.

The policy sued on insured one F. A. French, a member in the defendant association, against loss by fire to the extent of $ 3,000 on the property described. In the application which French made, and which was incorporated into the policy, it was stated that French was the sole and undisputed owner of the property, and it was stipulated that the policy should be void if the "interest of the insured be other than unconditional and sole ownership, or if the subject of the insurance be a building on ground not owned by the insured in fee simple, . . . or if any change other than the death of the insured take place in the interest, title, or possession of the subject of the insurance (except change of occupants without increase of hazard), whether by legal process or judgment or by voluntary act of the insured, or otherwise." A mortgage clause was attached to the policy when issued containing the following stipulations "Loss, if any, under this policy, payable to the People's Savings Bank, mortgagee, as their interest may appear. Fifteen days' notice of any delinquency on the part of the assured will be given to said mortgagee before any suspension or cancellation is made affecting the interests of the mortgagee." Defendant denied that French was at the time of issuance of the policy the sole and undisputed owner, and alleged other defenses not necessary here to notice. By way of reply plaintiff alleged waiver of breaches of condition in the contract.

If the mortgagee clause attached to the policy at the time it was issued created an independent contractual relation between the defendant and the plaintiff, and secured to the plaintiff as mortgagee a right to recover regardless of any previous or subsequent breaches of the contract on the part of the owner, then the plaintiff was entitled to recover notwithstanding the defenses alleged on the part of the company, for it is not contended that there have been any breaches of condition by the plaintiff, and to this question we first direct our attention.

Counsel for appellant rely upon the proposition that, if the policy was void in its inception by reason of the false statements of French as to ownership, then the mortgagee clause was without consideration, and plaintiff can not rely upon such clause as securing to it a right greater than that which French would have had to recover under the policy, and they rely upon the case of Baldwin v. German Ins. Co. 105 Iowa 379, 75 N.W. 326, which was again before the court on a second appeal; the opinion being found in 113 Iowa 314. But in that case the mortgagee clause was attached by way of indorsement long after the policy was issued, and therefore the contract with the mortgagee was not supported by the consideration which supported the original policy. But in the case before us the policy as originally issued had the mortgagee clause attached to it, and the plaintiff as mortgagee was a...