Russell v. Home Insurance Company

• Decision Date: 12 May 1924
• Citation: 262 S.W. 385,216 Mo.App. 244
• Parties: J. A. RUSSELL, Respondent, v. THE HOME INSURANCE COMPANY, Appellant
• Court: Missouri Court of Appeals

262 S.W. 385

216 Mo.App. 244

J. A. RUSSELL, Respondent, v. THE HOME INSURANCE COMPANY, Appellant

Court of Appeals of Missouri, Springfield

May 12, 1924

Appeal from the Circuit Court of Wright County.--Hon. C. H. Skinker Judge.

AFFIRMED.

Judgment affirmed.

Kirby Lamar, Curtis & Vandeventer and E. L. Snider for appellant.

(1) Plaintiff had ceased to occupy the property as owner long before the fire. He therefore did not have an insurable interest in the building at the time of the loss and did not sustain any loss. Lafont v. Ins. Co., 193 Mo.App 543; Wisecupp v. Ins. Co., 186 Mo.App. 310; Raney v. Ins. Co., 246 S.W. 57. (2) When the contract shown was made, the property was transferred to and stood at the risk of grantee, the bank. If the land increased in value, it got the benefit of the advance. Snyder v Murdock, 51 Mo. 175. (3) Defendant ought not to be held to protect a risk contrary to the terms of its contract and under new conditions not contemplated when the policy was written, against hazards to which it would not have been subjected had conditions remained as they were when the policy was written. Barnard v. Ins. Co., 27 Mo.App. 26; Dolin v. Ins. Co., 88 Mo.App. 666.

J. W. Jackson and Harry D. Durst for respondent.

(1) Plaintiff still retained the title to, and the possession of the farm. The contract of sale was executory and performed by either party. The Bank of Hartville still held the notes against plaintiff and the deed executed by plaintiff was never delivered. Plaintiff, therefore, had an insurable interest in said dwelling house, and the judgment should be affirmed. Hubbard v. Ins. Co., 222 S.W. 886, 205 Mo.App. 316; Terminal Co. v. Ins. Co., 194 S.W. 722; Ogden v. Ins. Co., 199 Mo.App. 611, 204 S.W. 46; Walton v. Ins. Co., 162 Mo.App. 316, 26 C. J., p. 232 and notes. (2) The effect of the agreement between plaintiff and the bank was no more than a postponement, for a period of one year, of the foreclosure of the deed of trust held by the bank securing the notes, then in default, executed by plaintiff. Plaintiff's title or interest was not changed, and defendant's risk was not increased thereby and a forfeiture by plaintiff ought not to be held therefor. Tebeau v. Ins. Co., 197 S.W. 130; Johnson v. Ins. Co., 205 S.W. 226; Walton v. Ins. Co., 162 Mo.App. 316; Goff v. Roberts, 72 Mo. 570.

FARRINGTON, J. Cox, P. J., and Bradley, J., concur.

OPINION

FARRINGTON, J.

The plaintiff recovered a judgment below and defendant appeals bringing but one question for decision here, and that purely one of law. We will mainly adopt appellant's statement for this opinion.

"This is an action on a fire insurance policy, issued by appellant to respondent, to which was attached what is known as a short-form mortgage or loss payable clause, making loss, if any thereunder, payable to the Bank of Hartville, as its interest might appear, but subject to all terms and conditions of the policy. It covered $ 1500 on a farm dwelling, located on a tract of 427 acres, and $ 500 on household furniture, etc., therein."

"The dwelling and part of the furniture then therein was destroyed by a fire during the term for which the policy was issued, and appellant declined to pay the claim made giving as a reason that after the policy was issued, and before the fire, plaintiff disposed of the property by contract and deed and ceased to occupy it as owner as he had previously done."

"The alleged transfer was for the consideration that certain indebtedness due from plaintiff to grantee should be satisfied."

"Appellant contends that because of, and by the contract and deed mentioned, and by each of them, a change took place in the interest, title and possession of respondent in, and his title to said property, by which, according to its terms said policy was rendered null and void; that the judgment was improperly rendered and should be reversed."

The contract for a deed to be delivered by the plaintiff to the Bank grew out of an indebtedness payable by the plaintiff to the Bank of Hartville, which was the interest said Bank had in the property that was recognized in the policy under the loss payable clause of same.

A deed was made to the defendant by the plaintiff and deposited with a custodian in escrow to be delivered when the notes were to be delivered provided that plaintiff would keep possession of the premises over the time that the fire occurred. The evidence shows that when the fire occurred the plaintiff was in possession, the deed had not been delivered to the Bank and notes had not been delivered. The notes, under the contract, were to bear no interest from the date of the contract of sale, and the contract provided that $ 200 was to be paid, and was paid for the possession from the time of the making of the contract of sale to the date set when the deed was to be delivered and the notes of plaintiff were to be turned over to him. Under this state of facts we have no hesitancy in saying that had this contract been made with an outside party, one whom the insurance company had not recognized in the policy of insurance, such transaction under Missouri authorities would have rendered the policy void. [See Hubbard v. Home Insurance Co., 205 Mo.App. 316, 321, 222 S.W. 886; Manning v. Insurance Co., 123 Mo.App. 456, 99 S.W. 1095; Snyder v. Murdock, 51 Mo. 175; Springfield Steam Laundry v. Traders' Insurance Co. of Chicago, 151 Mo. 90, 52 S.W. 238; American Fire Ins. Co. v. Ellison, 269 Mo. 410, 190 S.W. 879.]

In none of these cases, however, did the facts disclose that the purchaser of the thing insured had been already recognized by the policy as one having an interest in the policy and a contract to pay to such interested party the loss, should one occur.

Here we have a policy providing that in case of loss by fire the defendant will pay to the Bank of Hartville the amount of such loss as its interest may appear. We have an insurer agreeing that for a certain premium paid it will pay to an owner of property and to one having an interest therein the amount of the losses if fire occurs. There is no intimation that the fire originated in a wrongful way; no claim that the same interest, so far as actual facts are concerned, was not in the property owned by the bank and the plaintiff before and after the contract to transfer was made.

The defendant in this policy recognized that the bank had an interest in the property, and had there not been the agreement entered into between the parties that at the end of the year the notes would be cancelled and deed delivered, the point now relied upon would not have been made. The defendant expressly recognizes by the loss clause in the policy that the plaintiff and the Bank of Hartville had an insurable interest in this property, and because perchance the technical form prescribed in the policy was not literally complied with the insurance company appeals to the court to relieve it of liability.

The interest of the bank, that is, the notes of plaintiff which it held, far exceeded the amount of the policy, therefore if the plaintiff and the bank had let the matter stand as it was when the policy was written, and a fire occurred, the defendant would have been required to pay the loss to the bank under its contract of insurance and the plaintiff would have actually had no more interest than now in the amount recovered other than to see that it was paid to the bank to be applied on his notes. Now when the physical control and possession of the property were exactly the...