Pink v. Smith

• Decision Date: 01 September 1937
• Docket Number: No. 44.,44.
• Citation: 274 N.W. 727,281 Mich. 107
• Parties: PINK v. SMITH et al.
• Court: Michigan Supreme Court

281 Mich. 107

274 N.W. 727

PINK

v.SMITH et al.

No. 44.

Supreme Court of Michigan.

Sept. 1, 1937.

Suit by Louis H. Pink, as superintendent of insurance for the state of New York, as liquidator of the Lloyds Insurance Company of America, against Floyd L. Smith and Ella A. Smith, his wife, Mae Hess, the Reconstruction Finance Corporation, and others, wherein Mae Hess filed a cross-bill. From an adverse decree, Mae Hess appeals.

Decree affirmed. Appeal from Circuit Court, Wayne County, in Chancery; Harry J. Dingeman, Judge.

Argued before the Entire Bench.

David M. Miro, of Detroit, for appellant Mae Hess.

Bodman, Longley, Bogle, Middleton & Farley, of Detroit, for appellee Pink.

Butzel, Eaman, Long, Gust & Bills, of Detroit, for appellees Smith and others.

SHARPE Justice.

On May 14, 1923, Floyd L. Smith and Ella A. Smith, his wife, being the owners of an apartment building in the city of Highland Park, Mich., executed their promissory note for $90,000, secured by a real estate mortgage upon the above-mentioned property to the Detroit Fidelity & Surety Company. On November 4, 1932, the above surety company assigned and sold their interest in and to the promissory note and real estate mortgage to Lloyds Insurance Company of America; and on the 18th day of May, 1933, Lloyds assigned its interest in the note and mortgage to the Reconstruction Finance Corporation. Subsequent to this assignment, the superintendent of insurance for the state of New York was ordered to liquidate the business of Lloyds Insurance Company; and in compliance with said order Louis H. Pink, as superintendent of insurance of New York, became the lawful owner of the note and mortgage subject to the lien of the Reconstruction Finance Corporation.

July 12, 1933, Smith and wife by quitclaim deed conveyed their interest in and to the above property to John W. Brown and Eva May Brown; and they, in turn, on July 9, 1934, by quitclaim deed conveyed their interest in the property to Mae Hess.

January 30, 1933, the Fidelity & Guaranty Fire Corporation issued a policy of fire insurance No. 420,020 covering the said mortgaged premises to Lloyds Insurance Company of America and legal representatives, the premium on which was paid by Lloyds Insurance Company of America. On November 28, 1933, the Fidelity & Guaranty Fire Corporation issued a policy of fire insurance No. 71234 covering the same mortgaged premises to the commissioner of insurance, New York state, as liquidator of Lloyds Insurance Company of America and legal representatives. The premium on this policy was paid by the Browns, the owners of the mortgaged premises. On January 29, 1935, a portion of the mortgaged premises was damaged by fire and at the time of the fire both of said policies were in full force and effect.

Shortly after the fire Mae Hess caused the damage which resulted from the fire to be completely repaired and the premises to be restored to as good a condition as they were in before the fire. The cost of these repairs amounted to more than $800. The fire loss was adjusted at $523.40 on policy No. 420,020 and $261.70 on policy No. 71234, and each of said drafts was made payable to Mae Hess, Reconstruction Finance Corporation, and Louis H. Pink, as liquidator of Lloyds Insurance Company of America. Owing to the fact that the above-interested parties could not agree as to who should receive the money, the drafts were surrendered and the Fidelity & Guaranty Fire Corporation issued two further drafts in payment of the fire loss, each of these two drafts was made payable to the Reconstruction Finance Corporation, which applied the proceeds upon the indebtedness secured by the mortgage.

The above mortgage being in default, Louis H. Pink, as liquidator of Lloyds Insurance Company of America, filed a bill in chancery to foreclose the same. On September 30, 1936, proofs were taken and the amount due on the said mortgage was the sum of $126,896.61 after crediting the amount received from the fire loss. Mae Hess filed a cross-bill to obtain payment of the money represented by the fire loss. A decree was entered granting plaintiff the relief prayed for in its bill of complaint and dismissing appellant's cross-bill.

Appellant appeals and contends: (1) That the court erred in disregarding the testimony that the premises in question were fully and properly repaired and placed in as good condition as existed prior to the fire loss in question, by Mae Hess, appellant herein; and that no loss having been incurred by the appellee, and there being no liability on the said mortgage indebtedness chargeable to Mae Hess, she became entitled to the fire loss funds; (2) that the court erred in disregarding the fact that the appellees' interest not having been impaired or otherwise changed by reason of the fire, said premises having been fully restored and repaired by the appellant herein, therefore in equity and good conscience, the fire insurance loss funds should have been paid to the appellant, Mae Hess.

Policy No. 420,020 was taken out in the name of Lloyds Insurance Company, mortgagee; the premiums were paid by the...