Phenix Insurance Company of Brooklyn v. Omaha Loan & Trust Company
| Decision Date | 19 September 1894 |
| Docket Number | 5459 |
| Citation | 60 N.W. 133,41 Neb. 834 |
| Parties | PHENIX INSURANCE COMPANY OF BROOKLYN v. OMAHA LOAN & TRUST COMPANY |
| Court | Nebraska Supreme Court |
ERROR from the district court of Douglas county. Tried below before WAKELEY, J.
AFFIRMED.
Jacob Fawcett and F. M. Sturdevant, for plaintiff in error:
The alienation of the property by Crew avoided the policy. (Hale v. Mechanics Mutual Fire Ins. Co., 6 Gray [Mass.], 169; Loring v. Manufacturers Ins. Co., 8 Gray [Mass.], 28; Grosvenor v. Atlantic Ins Co., 17 N.Y. 391; State Mutual Fire Ins. Co. v Roberts, 31 Pa. St., 438; Buffalo Steam Engine Works v. Sun Mutual Ins. Co., 17 N.Y. 401; Pupke v Resolute Fire Ins. Co., 17 Wis. 389; Lawrence v. Holyoke Ins. Co., 11 Allen [Mass.], 387; Gasner v. Metropolitan Ins. Co., 13 Minn. 447; Chishom v. Provincial Ins. Co., 20 U. C. C. P., 11; Illinois Mutual Fire Ins. Co. v. Fix, 53 Ill. 151; Carpenter v. Providence Washington Ins. Co., 16 Pet. [U. S.], 495.)
Howard B. Smith, contra:
The relations between the defendant in error and the plaintiff in error are determined by virtue of the mortgage slip. A contractual relation exists between the insurer and the mortgagee separate and distinct from the contractual relation between the insurer and the mortgagor. (Hartford Fire Ins. Co. v. Olcott, 97 Ill. 449; City Five Cents Savings Bank v. Pennsylvania Fire Ins. Co., 122 Mass. 165; Hastings v. Westchester Fire Ins. Co., 73 N.Y. 141.)
The defendant in errer had an insurable interest at the time of the fire.
The action was properly brought by the defendant in error. (Waring v. Indemnity Fire Ins. Co., 45 N.Y. 606*; New York Life Ins. Co. v. Bonner, 11 Neb. 169; Hunt v. Mercantile Ins. Co., 22 F. 503; Gardinier v. Kellogg, 14 Wis. 605; Scantlin v. Allison, 12 Kan. 85; Stoll v. Sheldon, 13 Neb. 207; Roberts v. Snow, 27 Neb. 425.)
The facts are stated by the commissioner.
The Omaha Loan & Trust Company (hereinafter called the "Trust Company") sued the Phenix Insurance Company of Brooklyn, New York (hereinafter called the "Insurance Company"), in the district court of Douglas county to recover the value of certain property destroyed by fire and insured by the Insurance Company. The Trust Company had judgment and the Insurance Company brings the case here for review. The material facts in the case are: In February 1886, One Nathaniel S. Crew was the owner of a tract of land in Buffalo county, Nebraska, on which were situate a barn and some other buildings. In said month of February, Crew and his wife borrowed of the Trust Company $ 4,000, and as an evidence thereof executed and delivered to the Trust Company their coupon bond, payable to the order of the Trust Company five years after February 1, with interest payable semi-annually, and secured the same by a first mortgage on their said real estate. By the terms of this mortgage Crew and his wife agreed to insure, and keep insured for five years, the buildings on their real estate for the benefit of the Trust Company. On the 3d day of March, 1886, the Insurance Company issued the policy sued on, insuring the buildings of Crew on his real estate against loss or damage by fire for a period of five years. The policy contained the following clauses: (a.) "If the property be sold or transferred in whole or in part without written permission in this policy, then, and in every such case, this policy is void." (b.) "When the property shall be sold or incumbered or otherwise disposed of, written notice shall be given the company of such sale or incumbrance or disposal; otherwise this insurance on said property shall immediately terminate." Attached to this policy and made a part thereof was also what is known and called among insurance men a "mortgage slip," which contained the following:
The policy with the "mortgage slip" attached, upon its issuance, was delivered to the Trust Company, and has ever since been owned and held by it. The bond and mortgage executed by Crew to the Trust Company was in April, 1886, by it sold and assigned to one Huey, the Trust Company guarantying the collection of the principal and the prompt payment of the coupons of said mortgage loan. On the first day of April, 1886, Crew and wife sold and conveyed their real estate to one Platter. For the purposes of this case we take it as established by the evidence that no notice, written or otherwise, of this conveyance was given to the Insurance Company, either by Crew or Platter or the Trust Company, though the latter knew thereof soon after it occurred, until after the property insured had been destroyed, which occurred on the 27th day of April, 1889. On the 12th day of October, 1889, the Insurance Company having refused to pay the loss, the Trust Company brought this suit, and on the 1st day of February, 1891, in pursuance of its contract of guaranty with Huey, the mortgage loan being due on that date, paid off and took up the mortgage loan, and owned and held it at the date of the trial of this case, December 30, 1891. The amount at that date due and unpaid on the loan being about $ 3,000, such amount being largely in excess of the value of the insured property destroyed by fire.
To reverse the judgment rendered in this case counsel for the Insurance Company make three arguments in this court:
1. It is contended that as Crew sold and conveyed the premises on which was the insured property without the written consent of the Insurance Company to such sale being indorsed on the policy, and as neither Crew nor Platter furnished the Insurance Company any written notice of such conveyance, the policy had become void and was not in force even as to the Trust Company at the time of the loss sued for. This argument is based upon the theory that the right of the Trust Company depends upon the observance of the stipulations of the policy by Crew; that the Trust Company cannot enforce the policy if Crew could not. We do not agree with this contention. The Trust Company is not here as the mere assignee of the insurance policy issued to Crew, nor is it here simply as the person appointed to collect the loss for Crew. We are not concerned in this case with the question as to whether Crew has forfeited his rights to enforce the policy. It may be that by reason of his sale of the property without the written permission of the Insurance Company thereto indorsed on the policy, so far as he is concerned, the policy from that moment ceased to be of any effect. It may be by reason of the failure of Crew and Platter to give written notice to the Insurance Company of the conveyance of the property to Platter, that neither of them can enforce the policy. However this may be, it does not follow that because Crew, by his conduct, has precluded himself from enforcing the policy, that therefore the Trust Company has. As we view it, the Insurance Company, by its policy, agreed with Crew to insure his property on certain terms and conditions, and in case it was destroyed by fire, to make good the loss and damage. This is not all the Insurance Company agreed to do in this policy. It also in this policy contracted and agreed with the Trust Company that it would pay to it, or its assigns, whatever loss or damage the insured property might suffer from fire within the life of the policy. This contract with the Trust Company was a separate and independent contract from the one entered into between Crew and the Insurance Company; and the right of the Trust Company to enforce it does not depend upon whether Crew has kept his engagements with the Insurance Company.
In Hastings v. Westchester Fire Ins. Co., 73 N.Y. 141 the...
To continue reading
Request your trial