State Sav. Bank v. Shible Mut. Fire Ins. Co.

• Decision Date: 08 July 1927
• Docket Number: No. 26055.,26055.
• Parties: STATE SAV. BANK v. SHIBLE MUT. FIRE INS. CO.
• Court: Minnesota Supreme Court

214 N.W. 926

172 Minn. 122

STATE SAV. BANK v. SHIBLE MUT. FIRE INS. CO.

No. 26055.

Supreme Court of Minnesota.

July 8, 1927.

Appeal from District Court, Swift County; G. E. Qvale, Judge.

Action by the State Savings Bank against the Shible Mutual Fire Insurance Company. From a judgment for defendant, plaintiff appeals. Affirmed.

John I. Davis, of Benson, and Oscar Hallam, of St. Paul, for appellant.

C. A. Fosnes and John C. Haave, both of Montevideo, and Frank E. Wright, of Appleton, for respondent.

LEES, C.

This action was brought to recover on a policy of fire insurance. The court made findings in defendant's favor. This appeal was taken from the judgment.

The policy covered the dwelling house on a farm in Swift county, once owned by William H. Doyle. In May, 1919, Doyle entered into a contract for the conveyance of the farm to the Lowell Investment Company. In July of the same year the contract was assigned to Albert L. Stone. In February, 1920, Doyle and Stone mortgaged the farm to a Swift county bank. The bank assigned the mortgage to the plaintiff. The mortgage provided that the mortgagors should keep the farm buildings unceasingly insured in a responsible insurance company, the amount of loss, if any, to be payable to the mortgagee. In March, 1920, Doyle conveyed the farm to Stone. In April, 1920, defendant, a township mutual fire insurance company, issued the policy in question to Stone. Incorporated therein was one of defendant's by-laws, providing that, if the property should be sold or transferred, or if any change took place in the title, use, or occupation by the act of the assured, without the consent of the defendant indorsed on the policy, the policy should become wholly void. In August, 1920, Stone assigned the policy to W. F. Couch, who had purchased the farm from him. Defendant gave its consent to this assignment and its secretary attached a rider to the policy reading:

"Mortgage Clause. — Subject to the stipulations, provisions and conditions contained in the policy, the loss, if any, is payable to State Savings Bank, mortgagee, or its assigns, as their interests may appear."

Plaintiff is the bank referred to in the rider. In February, 1923, Couch conveyed the farm to De Wolf and Howe. Neither the plaintiff nor the defendant had knowledge or notice of the conveyance until after a fire totally destroyed the dwelling house in October, 1923. Due notice and proof of loss was given, and, upon defendant's refusal to pay, this action was brought. The defense was that the conveyance of the property by Couch to De Wolf and Howe avoided the policy in toto. The trial court took that view of the case, and the sole question presented is whether it is erroneous.

Among the provisions of the statute applicable to township mutual fire insurance companies is section 3659, G. S. 1923, reading in part as follows:

"No law relating to insurance companies now in force in this state shall apply to township mutual fire insurance companies unless it shall be expressly designated in such law that it is applicable to such companies."

Section 3670, G. S. 1923, provides that township mutual fire insurance companies shall be governed by the act of the Legislature under which they are organized, and shall be exempt from all provisions of the insurance laws of this state, "not only in governmental relations with the state, but for every other purpose, and no law hereafter passed shall apply to such company unless it shall be expressly designated in such law that it is applicable to township mutual fire insurance companies."

Section 3512, G. S. 1923, provides:

"No fire company shall issue on property in this state any policy other than the standard form herein set forth, * * * and no condition, stipulation or term, other than those therein provided for, * * * shall be valid. * * *"

The standard form provides that, if the policy shall be made payable to a mortgagee of insured real estate, no act or default of any person other than the mortgagee or his agents, or those claiming under him, shall affect the mortgagee's right to recover in case of loss.

Counsel for plaintiff concede that, with practical unanimity, the authorities agree that an act of the owner of insured property which...