Pioneer Sav. & Loan Co. v. Providence Washington Ins. Co.

• Citation: 17 Wash. 175,49 P. 231
• Court: Washington Supreme Court
• Decision Date: 18 June 1897
• Parties: PIONEER SAVINGS & LOAN CO. v. PROVIDENCE WASHINGTON INS. CO.

49 P. 231

17 Wash. 175

PIONEER SAVINGS & LOAN CO. v. PROVIDENCE WASHINGTON INS. CO.

Supreme Court of Washington

June 18, 1897

Appeal from superior court, Spokane county; Norman Buck, Judge.

Action by the Pioneer Savings & Loan Company, formerly named the National Building, Loan & Protective Union, against the Providence Washington Insurance Company. From a judgment for defendant entered on a directed verdict, plaintiff appeals. Reversed.

Mark F. Mendenhall, for appellant.

Graves Wolf & Graves, for respondent.

REAVIS J.

Action at law to recover on a fire insurance policy. The plaintiff procured a policy of insurance from the defendant against loss by fire, in the amount of $1,500, upon a store building in the town of Post Falls, Idaho. The policy ran directly to Celinda Newsom, and the contract of insurance was for the term of one year from the 30th of August, 1893, at noon, to the 30th of August, 1894, against all direct loss or damage by fire. The application for the insurance was made by the plaintiff as mortgagee of the property owned then by Celinda Newsom and her husband. It contained the stipulation "Loss, if any, payable to the plaintiff named as mortgagee or trustee, per mortgage clause attached," which mortgage clause contained, among other things, the following provisions: "It is hereby agreed that this insurance, as to the interests of the above-named mortgagee or beneficiary in the trust deed only therein, shall not be invalidated by any act or neglect of the mortgagor or owner of the property insured, nor by the occupancy of the premises for purposes more hazardous than are permitted by the terms of this policy, nor by any change in title or possession whether by legal process, voluntary transfer, or conveyance of the premises: provided, that the mortgagee or beneficiary shall notify this company of any change of ownership or increase of hazard which shall come to the knowledge of said mortgagee or beneficiary, and shall have permission for such change of ownership or such increased hazard duly indorsed on this policy." On October 1, 1893, the buildings were totally destroyed by fire. Notice was given and tender of proof of loss made by the plaintiff to the defendant within seasonable time thereafter, and claim for payment of loss. Defendant denied all liability under its contract of insurance, and plaintiff began this action. At the trial of the cause, objection was interposed by defendant to the introduction of testimony because the complaint did not state facts sufficient to constitute a cause of action. The court sustained this objection, and, upon motion of defendant, directed the jury to return a verdict in favor of the defendant, and entered judgment thereon. Previous to the trial a general demurrer had been interposed by defendant to the complaint, and overruled by the court.

It will be observed that the question presented here is upon the sufficiency of the pleadings by the plaintiff. The complaint sets out the corporate capacity of the plaintiff and the defendant, and that Newsom and wife were the owners of the property covered by the policy of insurance, and as such owners executed and delivered a mortgage of $1,800 to the plaintiff, for a valuable consideration, and that the mortgagors agreed to keep the premises insured against loss by fire, and the policy to have a mortgage clause attached, with the loss, if any, payable to plaintiff, and that, in case of failure of the mortgagors to keep up the insurance, then the mortgagee to take out the insurance and pay the premiums, and the mortgage was to be security for the premiums paid; that for a breach of the conditions of the mortgage, plaintiff commenced a foreclosure suit about the 2d day of August, 1893, in the district court of Kootenai county, Idaho, and immediately served the defendant with summons; that during the pendency of the foreclosure suit, about August 28, 1893, Newsom and wife made, executed, acknowledged, and delivered their deed, thereby intending to convey the mortgaged premises to plaintiff, and at the same time it was expressly understood between defendants Newsom and plaintiff that title should pass to plaintiff only on the condition that said title be approved by plaintiff's attorneys, and upon the further condition that the foreclosure suit be dismissed and the mortgage debt satisfied and discharged by plaintiff as against Newsom and wife; that about the 21st of September, 1893, plaintiff's attorneys, on behalf of the plaintiff, filed a motion in the Idaho court to dismiss the foreclosure suit, and the motion to dismiss the suit was heard and order of dismissal thereon entered by the court on the 6th of November, 1893; that, during the pendency of the foreclosure suit in accordance with the provisions of the mortgage, plaintiff, upon the _____ day of August, 1893, at Minneapolis, Minn., applied for and procured from defendant insurance on the premises, and paid the premium of $67.50 therefor; and that defendant, by its agents duly authorized thereto, on August 30, 1893, at Spokane, Wash., made the policy of insurance in writing and insured the premises as the property of Celinda Newsom in the sum of $1,500 against loss by fire. After the demurrer was overruled, defendant answered, in substance, denying information sufficient to form a belief as to the formal matters alleged in the complaint, and affirmatively alleging that at no time prior to the date of the fire did the plaintiff, or Newsom or wife, or any other party, notify defendant of any change of ownership which had come to the knowledge of either of the parties, nor did plaintiff obtain permission for such change of ownership, or obtain permission for the execution of the deed from Newsom and wife to plaintiff, or concerning the approval of the title of the mortgaged premises, or concerning the pendency or dismissal of the foreclosure suit, and that at the time of the fire, and when the policy of insurance was made, plaintiff was the owner in fee simple of the mortgaged premises. The answer further alleges that the policy described in the complaint contained the following covenant: "That said policy should be void if the interest of the insured be other than unconditional and sole ownership, or if the subject of the ownership of the insurance be a building on ground not owned by the insured in fee simple, or if any...