Ramsey v. Farmers' Mut. Ins. Co. of Macon

• Decision Date: 29 April 1940
• Citation: 139 S.W.2d 1027,234 Mo.App. 1102
• Parties: RALPH RAMSEY, EXECUTOR OF THE ESTATE OF ALICE ANDERSON, DECEASED, APPELLANT, v. THE FARMERS MUTUAL INSURANCE COMPANY OF MACON, MISSOURI, A CORPORATION, RESPONDENT
• Court: Kansas Court of Appeals

139 S.W.2d 1027

234 Mo.App. 1102

RALPH RAMSEY, EXECUTOR OF THE ESTATE OF ALICE ANDERSON, DECEASED, APPELLANT, v. THE FARMERS MUTUAL INSURANCE COMPANY OF MACON, MISSOURI, A CORPORATION, RESPONDENT

Court of Appeals of Missouri, Kansas City

April 29, 1940

Appeal from Macon Circuit Court.--Hon. Harry J. Libby, Judge.

Judgment affirmed.

Owen & Thurlo for appellant.

(1) The court erred in refusing plaintiff's request for Declaration of Law No. 1, in the nature of a directed finding for plaintiff at the close of all the evidence because: (a) The provisions of the policy and the loss payable clause which have to be read together made the loss payable clause a "union" loss payable clause or a separate and independent contract of insurance in favor of plaintiff that was not affected by the foreclosure proceedings. 26 C. J 239-240, sec. 300; 14 R. C. L., p. 1038; 18 L.R.A. (N. S.) pp. 204-5-6; 25 L.R.A. (N. S.), pp. 226, 227; 14 R. C. L., p 1086; Baley v. Am. Central Ins. Co., 13 F. 250; Rostelle v. American Ins. Co., 184 Ill.App. 157; Jones v. Phoenix Ins. Co., 94 Kans. 235, 164 P. 354; Citizens State Bank v. Shawnee Fire Ins. Co., 91 Kans. 18, 137 P. 78, 94 L.R.A. (N. S.) 972; Eddy v. London Assurance Corp., 143 N.Y. 311, 38 N.E. 307, 25 L.R.A. 686; Eddy v. Williamsburg Ins. Co., 143 N.Y. 656, 38 N.E. 307; Billings v. German Ins. Co., 34 Neb. 502, 52 N.W. 397; Pioneer Savings & Loan Co. v. St. Paul Fire & Marine Ins. Co., 68 Minn. 170, 70 N.W. 679; Washburn Milling Co. v. Fire Assn. of Philadelphia, 60 Minn. 68, 61 N.W. 825; Kimberly & Carpenter v. National Liberty Ins. Co. (Del.), 157 A. 730; Prudential Ins. Co. v. German Mut. Fire Ins. Assn., 231 Mo.App. 631, 105 S.W.2d l. c. 1008; People's Savings Bank v. Retail Merchants Mut. Fire Ins. Co. (Iowa), 123 N.W. 198, 31 L.R.A. (N. S.) 455; Senor v. Western Millers Ins. Co., 181 Mo. 104, 79 S.W. 687; Wisman v. Hazel Dell Farmers' Ins. Co., 94 S.W.2d 909. (b) The terms of the policy with reference to the rights of cancellation by defendant as against a mortgagee, as was appellant's deceased testatrix, required written notice to be given to appellant to invalidate the policy for any reason, and no such notice having been given before the loss, the policy was in full force and effect at the time of the fire. 14 R. C. L., p. 1086; People's Savings Bank v. Retail Merchants Mut. Fire Ins. Co. (Iowa), 123 N.W. 198, 31 L.R.A. (N. S.) 455; Senor v. Western Millers' Mut. Ins. Co., 181 Mo. 104, 79 S.W. 687; Kimberly & Carpenter v. National Liberty Fire Ins. Co. (Del. Sup.), 157 A. 730; Prudential Ins. Co. v. German Mut. Fire Ins. Co., 231 Mo.App. 631, 105 S.W.2d l. c. 1008. (c) The only defense pleaded and upon which defendant solely relied was that the policy was void because of the foreclosure proceedings is not a defense to this action as no effective tender of the unearned charges and premiums was ever made. Cox v. Home Ins. Co. of N. Y., 19 S.W.2d 297; Cox v. Home Ins. Co., of N. Y., 331 Mo. 10, 52 S.W.2d 872; Luthy v. Northwestern Nat. Ins. Co., 224 Mo.App. 371, 20 S.W.2d 299; Williams v. Connecticut Fire Ins. Co., 47 S.W.2d 207; Morrison v. Fidelity-Phoenix Fire Ins. Co., 71 S.W.2d 816; Drake Hardware Co. v. Wall Bros., 5 S.W.2d 1109, l. c. 1110. (2) The court erred in refusing to permit the witness Cannon, the agent of defendant, to testify that he knew of the mortgage on the premises in question and knew that it was being foreclosed, and erred in striking out such testimony as such showed a waiver of the provisions of the policy with reference to foreclosures on behalf of defendant in the absence of a written ten (10) days notice of cancellation. Everett v. Patrons' & Farmers' Mut. Fire Ins. Co., 222 Mo.App. 1010, 7 S.W.2d 463, l. c. 468; State ex rel. Williams v. Daues (Mo.), 292 S.W. 58; Cersia v. St. Guiseppe Mutual Aid Ass'n (Mo. App.), 211 S.W. 81; Ormsby v. Laclede Farmers' Mutual Fire & Lightning Ins. Co., 98 Mo.App. 371, 72 S.W. 139; Rickey v. Mutual Fire Ins. Co., 79 Mo.App. 485; 26 C. J., p. 279; Gabriel v. Farmers' Mutual Fire Ins. Co., 108 S.W.2d 628, l. c. 630; Patten v. Springfield Fire & Marine Ins. Co. (Mo. App.), 25 S.W.2d 1075. (3) The court committed error in refusing appellant's request for Declaration of Law No. 2, and wherein it was stated that the provisions of the policy and the loss payable clause relating to mortgages and mortgagees, constituted a "union" mortgage clause and a separate and independent contract of insurance in favor of plaintiff's testate, and that plaintiff's rights were not affected in any manner by the foreclosure proceedings because: (a) The terms of the policy required a written notice to be given plaintiff of cancellation to render the policy ineffective as to him. Butler v. Equitable Life Assurance Soc., 93 S.W.2d 1019; Prudential Ins. Co. v. German Mut. Fire Ins. Co., 105 S.W.2d 1008; Kimberly & Carpenter v. National Liberty Ins. Co., 27 A. 730, l. c. 732; People's Savings Bank v. Retail Merchants Mut. Fire Ins. Co., 123 N.W. 198, 31 L.R.A. (N. S.) 455; Kimbrough v. National Protective Ins. Assn., 225 Mo.App. 913, 35 S.W.2d 654; Florea v. Iowa State Ins. Co., 25 Mo.App. 49, 32 S.W.2d 111; Spencer v. Farmers' Mut. Ins. Co. of Sullivan Co. (Mo.), 65 S.W.2d 665. (b) As the terms of the insurance contract are in conflict when applied to mortgage holders as avoiding liability, such terms should be construed in favor of appellant and a forfeiture of insurance denied. State ex rel. Winebrenner v. Detroit Fidelity & Surety Co., 326 Mo. 684, 32 S.W.2d 572; State ex rel. Mut. Benefit Health & Accident Assn. v. Trimble, 334 Mo. 920, 68 S.W.2d 685; Heald v. Aetna Life Ins. Co., 340 Mo. 1143, 104 S.W.2d 379; Spencer v. Farmers' Mut. Ins. Co. of Sullivan Co. (Mo.), 65 S.W.2d 665. (c) The defense that the policy was void as a result of foreclosure proceedings because no valid tender of the unearned premiums and charges was ever made, and as this was the sole defense of defendant, such defense should not have been taken into consideration. (4) The court erred in giving defendant's declarations of Law Nos. 1 and 2, as the defense of a void policy is not good as no tender of the unearned premiums and charges was ever made and the policy provisions are such that plaintiff's rights were not disturbed and the foreclosure proceedings did not prevent his recovery. Cox v. Home Ins. Co. of N. Y., 19 S.W.2d 297; Cox v. Home Ins. Co. of N. Y., 331 Mo. 10, 52 S.W.2d 872; Luthy v. Northwestern Nat. Ins. Co., 224 Mo.App. 371, 20 S.W.2d 299; Williams v. Connecticut Fire Ins. Co., 47 S.W.2d 207; Morrison v. Fidelity-Phoenix Fire Ins. Co., 71 S.W.2d 816; Drake Hardware Co. v. Wall Bros., 5 S.W.2d 1109, l. c. 1110. (5) The court erred in rendering judgment in favor of defendant as the defense of foreclosure proceedings, the sole defense, is no defense to this action.

C. G. Buster and Ed. S. Jones for respondent.

(1) The loss-payable clause attached to the policy and offered in evidence is an open mortgage clause under the decisions in Missouri. Ford v. Ins. Co., 298 S.W. 741; Prudential Ins. Co. v. German-American Ins. Assn., 105 S.W. 1001; Prudential Ins. Co. v. German-American Mut. Fire Ins. Assn., 228 Mo.App. 139, 60 S.W.2d 1008; Note 18, L.R.A. (N. S.) 197, l. c. 199. (2) By its expressed terms the policy in suit became inoperative as to plaintiff and his mortgagor prior to the loss, as, with actual knowledge to the mortgagor and the mortgagee and without actual knowledge to the insurer, foreclosure proceedings were instituted by the mortgagee, the plaintiff in this case. Trust Co. v. Phoenix Ins. Co., 210 S.W. 98; Atlas Reduction Co. v. New Zealand Ins. Co., 138 F. 497. (3) Notice to him of the pendency of foreclosure proceedings is not notice to the company. Luthy v. Northwestern Natl. Ins. Co., 224 Mo.App. 374, 20 S.W.2d 299; Park v. Fidelity Ins. Co., 279 S.W. 246; Smith v. Ins. Co., 188 Mo.App. 297. (4) The policy was terminated by reason of non-compliance with the conditions thereof. 14 R. C. L., p. 119, par. 370.

SPERRY C. Campbell, C., not sitting.

OPINION

SPERRY, C.

This is a suit on a fire insurance policy. Plaintiff, Ralph Ramsey, is executor of the estate of Alice Anderson, deceased; defendant is the Farmers' Mutual Insurance Company of Macon, Missouri. Jury was waived and trial was by the court. Certain declarations of law were made and judgment was rendered for defendant. Plaintiff appeals. We will refer to the parties as plaintiff and defendant, in the order mentioned above.

Defendant was in the fire insurance business. George F. and Helen Gucker were the owners of a dwelling house located on a farm in Linn County, Missouri. The Guckers made application to defendant for an insurance policy on said dwelling house. The policy was issued for a term of five years, beginning August 1, 1936. At the time the policy was issued the Guckers owed a note, secured by deed of trust on the property, to E. L. Anderson, who, long prior to the fire loss herein mentioned, assigned same to Alice Anderson, now deceased. All premiums and assessments levied against the policy were fully paid.

The policy carried the following provision, which we will designate as Excerpt 1:

"Loss or damage, if any, on buildings insured under this policy shall be payable to E. L. Anderson, or Assigns, St. Catherine, Missouri, mortgagee, as his interest may appear at the time of loss, subject to all terms and conditions of this Policy. This slip attached to and made a part of Policy No. 2416 of the Farmers' Mutual Insurance Company of Macon, Missouri, August 1st, 1936." (Italics ours.)

It also carried the following paragraph, which we shall designate Excerpt 2:

"This entire policy shall be void, unless otherwise provided by agreement in writing added hereto, . . . or (c) if, with the...