Springfield Steam Laundry Co. v. Traders' Ins. Co.

• Decision Date: 26 June 1899
• Citation: 151 Mo. 90,52 S.W. 238
• Parties: SPRINGFIELD STEAM LAUNDRY CO. et al. v. TRADERS' INS. CO.
• Court: Missouri Supreme Court

52 S.W. 238

151 Mo. 90

SPRINGFIELD STEAM LAUNDRY CO. et al. v. TRADERS' INS. CO.

Supreme Court of Missouri, Division No. 2.

June 26, 1899.

INSURANCE — CONDITIONS IN POLICY — FORECLOSURE PROCEEDINGS — GENERAL AGENTS — WAIVER OF CONDITION.

1. Where a policy of insurance on mortgaged premises provides that the policy shall become void upon the commencement of proceedings for foreclosure or sale under the mortgage, an advertisement for sale by the trustee invalidates the policy, although the broken condition of the mortgage was complied with, and the foreclosure proceedings stopped, before going further.

2. Where an insurance policy on mortgaged premises provides that the policy shall become void upon commencement of foreclosure proceedings, a general agent of the company, having full power to issue policies and receive premiums, has authority to waive this condition, notwithstanding a provision in the policy that the agent shall have no power to waive any of the conditions.

Case certified from St. Louis court of appeals.

Action by the Springfield Steam Laundry Company and another against the Traders' Insurance Company. There was a judgment for defendant, and plaintiffs appealed to the court of appeals, where the judgment was affirmed, but, on the dissent of one of the judges on the ground of conflict with former decisions of the supreme court, the case was certified to the supreme court. Reversed.

Heffernan & Buckley, for appellants. Fyke, Yates & Fyke, for respondent.

BURGESS, J.

This is an action upon a policy of fire insurance. At the time the policy was issued the property was mortgaged, and the policy provided that any loss should be paid to the mortgagee. The defense was that prior to the destruction of the property the conditions of the mortgage were violated, and the property advertised for sale thereunder, and that by reason thereof the policy was invalidated and void at the time it was consumed by fire. The cause was submitted to the court on an agreed statement of facts. The trial resulted in a judgment for defendant. From this judgment plaintiffs appealed to the St. Louis court of appeals, where the judgment was affirmed, but, because of the dissent by one of the judges of that court from the opinion therein rendered upon the ground of the opinion being in conflict with former decisions of this court, the case was certified to the supreme court.

The facts agreed upon are substantially as follows: The property was owned by the Springfield Steam Laundry Company. The insurance was taken out by it, and by the terms of the policy the loss, in case of the destruction of the property, was to be paid to the mortgagee as his interest might appear. After the loss, the claim was assigned by the mortgagee to the plaintiff Heffernan. The mortgage, by its terms, was subject to foreclosure if the taxes on the mortgaged property were permitted to become delinquent. This condition of the mortgage was broken, and by reason of it the trustee advertised the property for sale, as provided by the terms of the mortgage. The sale was enjoined. Subsequently the taxes were paid, and the injunction proceedings dismissed. A short time thereafter the fire occurred. The policy contained this provision, to wit: "If the property be sold, transferred, or is or become incumbered by mortgage or trust deed, or by judgment, tax, or mechanic's lien, or upon the commencement of proceedings for its foreclosure or sale, or levy thereon by law officer, or upon its passing into the hands of receiver or trustee, or if this policy be assigned before a loss, then, and in every such case, this policy shall, without the written consent of this company thereto be indorsed hereon, become absolutely void." Another condition of the policy is as follows: "It is further understood and agreed, and made a part of this contract, that neither the agent who issued this policy, nor any other person except its secretary in the city of Chicago, has authority to waive, modify, or strike from the policy any of its terms and conditions, * * * nor, in the event that this policy shall become void by reason of noncompliance with any of its terms or conditions thereof, shall the agent have power to waive, modify, or revive the same, and any policy so made void shall remain void and of no effect, any contract by parol or otherwise or understanding with the agent to the contrary notwithstanding." It was further agreed that the local agent of the defendant who issued the policy had notice of the advertisement of the property for sale, and the subsequent proceedings in reference thereto. The court, of its own motion, declared the law to be that under the law and agreed statement of facts the plaintiff is not entitled to recover.

The first question for consideration is as to whether or not the advertisement of the property for sale under the deed of trust was the commencement of foreclosure proceedings within the meaning of the terms of the policy. If so, by one of its express provisions the policy became void, and of no effect. The case of Insurance Co. v. Lewis 30 Mich. 41, was an action upon a policy of fire insurance in which it was provided that: "In case of any transfer or termination of the interest of the insured, or any part of his interest, in the property hereby insured, either by sale, contract, or otherwise, or in case any mortgage, lien, or incumbrance shall be executed thereon, or shall attach thereto, or if the title thereto shall be in any way changed or affected after the date of the policy, or if any proceedings for sale thereof shall be had, commenced, or taken, or if the title thereto shall be or become less than...