Standard Leather Co. v. Mercantile Town Mut. Ins. Co.

• Decision Date: 26 May 1908
• Citation: 131 Mo. App. 701,111 S.W. 631
• Parties: STANDARD LEATHER CO. v. MERCANTILE TOWN MUT. INS. CO.
• Court: Missouri Court of Appeals

111 S.W. 631

131 Mo. App. 701

STANDARD LEATHER CO. v. MERCANTILE TOWN MUT. INS. CO.

St. Louis Court of Appeals. Missouri.

May 26, 1908.

1. INSURANCE — POLICY — WHAT LAW GOVERNS.

An insurance policy is controlled by the laws of the state where the insured property is situated and the owner resides.

2. EVIDENCE — PRESUMPTIONS — LAWS OF OTHER STATES.

In an action in this state on a policy governed by the laws of another state, where the law of such other state on a point arising on the policy is not proved, the question is to be determined according to the rules of the common law and equity, and these rules must be presumed to be the same in such other state as in this.

3. MORTGAGES — TITLE OF MORTGAGOR.

A mortgage, until entry by the mortgagee for condition broken, is a mere lien for the debt, substantial ownership remaining in the mortgagor.

4. VENDOR AND PURCHASER — CONTRACT — TITLE OF VENDEE.

Where a vendee merely holds a contract binding the vendor to execute a deed on payment of the purchase money, as long as the purchase money remains unpaid, the vendee owns neither the legal nor the equitable estate.

5. INSURANCE — COVENANT OF OWNERSHIP — EFFECT OF MORTGAGE.

The existence of a mortgage for part of the purchase price of insured property does not constitute a breach of the provision contained in the policy that the same shall be void if the interest to be insured is other than unconditional and sole ownership.

6. SAME — STIPULATION FOR OTHER INSURANCE.

A stipulation in a policy requiring the insured to take out other concurrent insurance on the same property was fulfilled where the property covered by both policies, though described differently, was the same, so that there could be an apportionment of the damages between the two companies in case of loss.

Appeal from St. Louis Circuit Court; Withrow, Judge.

Action by the Standard Leather Company against the Mercantile Town Mutual Insurance Company on a policy of insurance. From a judgment for defendant, plaintiff appeals. Reversed and remanded.

The property insured is described in the policy in suit as follows: "Standard Leather Company of Pittsburg, Pa. $500. On the following described property, occupied by the assured as a patent leather factory and finishing house situate on the line of West Penn. Railroad, near Cheswick, Allegheny County, Pa.: On all of their buildings, whether built in whole or in part of brick or wood, gravel or iron roofs, including all additions, foundations, pavements, furnaces, ovens and their contents, flues, stacks, machinery, machines and parts of same, dynamos, switch-board and connections, engines, boilers, tanks, leather-working machinery, shafting, belting, pulleys, hangers, vats, tables, elevators and connections, tools, hose, watchman's clock and all other machinery appertaining to or used in the manufacture of patent leather and on stock manufactured, unmanufactured or in process, including packages full and empty, and all other material and supplies their own or held by them in trust or sold, but not removed, and office furniture and fixtures, books, stationery and office supplies, all while contained in and on premises above described. Other insurance permitted. Privilege granted to make alterations, additions, and repairs, and to work at all hours. Permission to use natural gas for fuel and light and to generate and use electricity for light and power in the above mentioned premises, when the entire equipments are in full compliance with the standard of Board of Fire Underwriters of Allegheny County, Pa. This insurance does not cover and shall not be liable for loss to accounts, bills, currency, deeds, evidence of debt, money, notes or securities." In the Liverpool, London & Globe Insurance Company's policy, referred to in the policy in suit, the description is as follows:

"On all their brick, frame or other buildings and sheds, and all additions, extensions and attachments thereto, and permanent fittings and fixtures of all kinds therein or thereon, including engines, boilers, stacks and connections, machines and machinery, and parts and extra parts thereof, shafting, belting, pulleys, hangers, gearing, millwright work, electric light plant and equipment complete, tools, implements, apparatus, appliances, utensils, furniture and fixtures, catalogues and all other printed matter, stationery and office supplies, and all other equipment and furnishment of every kind, used or for use in the operation, maintenance and protection of their property; together with all stock of every nature, manufactured, unmanufactured, or in process, and all materials, supplies and packages for the production thereof, the property of the assured, or held in trust, or sold but not delivered or removed, all while contained in any or all of the above described buildings and sheds, and additions, extensions or attachments thereto, or on premises owned or leased by the assured, situate at or near Cheswick Station, on the line of the Western Pennsylvania Railroad, Allegheny county, Pa., and occupied solely by the assured for the manufacture of leather and other purposes, incidental to their line of business, and agreeable to a plan on file in the office of Negley & Clark Company, Insurance, Pittsburg, Pa.

"General Privileges. Privileged to make additions, alterations, improvements and repairs, and this insurance to cover thereon and therein, to work at all hours, to use natural gas for fuel and light, and necessary oils for lighting, lubricating and other purposes, and generally to do such work and to use such materials and supplies as may be necessary in the conduct of their business; and for other insurance without notice until required. This insurance does not cover loss to accounts, bills, evidences of debt, deeds, money, notes or securities.

"Electric Light & Dynamo Clause. Privileged to generate and use electric lights when the entire equipment is in full compliance with the Standard of the Board of Fire Underwriters of Allegheny County, Pa., and a certificate obtained from said board to that effect. It being understood that no alterations shall be made in the equipment after the certificate is issued without consent from said board."

Bland & Cave, for appellant. Barclay & Fountleroy, for respondent.

GOODE, J. (after stating the facts as above).

Plaintiff is a corporation organized under the laws of the state of Pennsylvania, and defendant is a town mutual insurance company organized under the laws of the state of Missouri. As such it is exempt from the general insurance laws of the state. Rev. St. 1899, § 8024 (Ann. St. 1906, p. 3815). Defendant issued a policy of insurance to plaintiff on certain property belonging to the latter, situate on the line of the Western Pennsylvania Railroad Company at Cheswick, Allegheny county, Pa. The policy ran from July 30, 1903, to July 30, 1904. It covered what appears to have been a factory belonging to plaintiff at the place mentioned, including all the buildings of the factory, the machinery, tools, stock, and other property which will be more particularly mentioned in considering one of the defenses. The property insured was consumed by fire on July 12, 1904, while the policy was in force, the destruction being total. As the indemnity provided in the policy was not paid, this action was instituted to recover the sum, to wit, $500. The property appears to have been of great value and was insured, the evidence tends to show, for upwards of $80,000. Several defenses were interposed based on supposed breaches of warranties contained in the policy, but only two have been insisted on in the briefs for defendant, and they only will be noticed. The policy contained a clause providing it should be void if the interest of the insured in the property covered was other than unconditional and sole ownership. At the date of the policy there was an outstanding mortgage on the real property originally given to secure a note of $7,000, for part of the purchase price of the realty, on which note there was an unpaid balance of $3,500. It is contended the existence of this mortgage was a breach of the clause recited, and rendered the policy void. No inquiries by the company or representations by plaintiff were shown to have been made about the title when the insurance was applied for, nor are mortgages or incumbrances mentioned in the policy. Another stipulation was that the entire policy should be null and void if there was not at the time it was issued, of if afterwards there should cease to be other fire insurance in the Liverpool, London & Globe Insurance Company of Liverpool for an amount not less than three times the amount of defendant's policy in form concurrent with said policy and on the identical property covered by it. Defendant pleads a breach of this condition in avoidance of the policy. The evidence tended to show plaintiff held insurance in the Liverpool, London & Globe Company for $2,000 at the date of the policy in suit and until the fire occurred. But defendant insists the policy of the Liverpool, London &amp Globe Company did not cover the identical property covered by the one in suit, and, therefore, the condition was broken. After the evidence had been received, the court, at defendant's instance, granted a declaration of law against recovery, and plaintiff appealed.

The property insured was in Pennsylvania, the domicile of the plaintiff company, and the contract was a Pennsylvania one. Thompson v. Ins. Co., 169 Mo. 12, 68 S. W. 889. What the law of Pennsylvania is regarding the effect of an outstanding mortgage on a covenant in an insurance policy that the contract shall be void if the interest of the insured is other than unconditional ownership, was not proved. Hence the point is to be determined according to the rules of the common law and equity, and these rules, there being no proof to the contrary, must be presumed to be the same in Pennsylvania as in Missouri....