Sun Fire Office of London v. Clark

• Citation: 53 Ohio St. 414,42 N.E. 248
• Parties: SUN FIRE OFFICE OF LONDON v. CLARK et al.
• Decision Date: 29 October 1895
• Court: United States State Supreme Court of Ohio

42 N.E. 248

53 Ohio St. 414

SUN FIRE OFFICE OF LONDON v. CLARK et al.

Supreme Court of Ohio.

October 29, 1895

Error to circuit court, Cuyahoga county.

The action below was upon a policy of insurance in the sum of $2,000 made and delivered by the Sun Fire Office of London to Ida A. Clark, to indemnify her against loss by fire on her dwelling house, and payable to George W. Pringle as his interest might appear, his interest being that of a mortgagee. The first defense of the answer admitted certain allegations, and then denied all the other averments of the petition. The questions, however, arise upon the second and third defenses in the answer, and the issues made thereon. These defenses are as follows: Second defense: ‘ Further answering said petition, defendant, for a second defense, says that it is one of the express conditions and provisions of the policy of insurance so made by it, and a part thereof, that the same should become void unless consent in writing was indorsed thereon by or on behalf of the defendant, if any change took place in the title, interest location, or possession of the property insured (except in case of succession by reason of the death of the insured) whether by sale, transfer, or conveyance, in whole or in part, or by legal process or judicial decree; and defendant alleges that after the making of said policy, and by deed dated November 7, 1889, the plaintiff, Ida A. Clark, conveyed the premises upon which stood the house by said policy insured to one Clark A. Rhodes,-her husband, F. W. Clark joined in said conveyance (which is recorded in volume 460 page 326, of Cuyahoga County Records),-without notice to or consent of this defendant, which was ignorant of the same until after the destruction of said house by fire, by which conveyance said policy became void, and of no force and effect.’ Third defense: ‘ Further answering said petition, defendant, for a third defense, says that it is one of the conditions of the policy of insurance so made by it, and a part thereof, that the same should become void unless consent in writing was indorsed thereon, by or on behalf of the defendant, if the insured had, or should after the making of the same obtain, any other policy or agreement for insurance, whether valid or not, on the property in said policy mentioned, or any part thereof; and it alleges that on or about the 1st day of December, 1888, the plaintiff, Ida A. Clark, obtained a policy of insurance of the Springfield Fire & Marine Insurance Company on the same house insured by the said policy of defendant, to the amount of $2,000, and on the piano, household furniture, and family wearing apparel while therein contained, to the amount of $500, without any notice to this defendant or its consent thereto, and the loss on said buildings was paid by said insurance company in pursuance of said policy, whereby said policy sued upon herein became, and has been ever since, utterly void, and of no effect whatever.’ To these defenses the plaintiff replied as follows: First, denying the averments of the second defense, she averred: ‘ That at the time mentioned she and her husband mortgaged said property to said Clark A. Rhodes, the instrument being in form only a deed, and that at the time of said fire said mortgage had not become absolute, nor was the debt secured thereby due and payable. She further avers that she immediately gave notice of such mortgage to said company, both to the agent through whom said policy was issued, to the general agent of said defendant in Cleveland, Ohio, and to the company itself, and received from none of these persons or from said defendant any intimation that said policy would be forfeited on account of said mortgage; and on account thereof she did not, as she might and would otherwise have done, procure other insurance in place of the policy referred to in said petition. Replying to the third defense contained in said answer, this plaintiff says that, immediately upon obtaining the policy of insurance mentioned in said third defense, she notified said defendant of said insurance, who consented thereto.’ The case was trial to a jury. Evidence was offered by both parties upon the issues joined, as appears from a bill of exceptions taken, and made a part of the record. At the close of the evidence the court instructed the jury as follows: ‘ Under the construction which I have placed upon section 3643 of the Revised Statutes of Ohio, and the pleadings and proof in the case, I deem it my duty to direct the jury to return a verdict for plaintiff for the amount of the policy and interest from March 12, 1890.’ Exception was taken to the ruling of the court. A motion was made for a new trial, and overruled, and judgment entered on the verdict, which was affirmed by the circuit court. The ruling of the court is assigned for error here. Reversed.

Syllabus by the Court

1. A deed absolute on its face, but shown by a separate written agreement to be a security for the performance of a personal obligation of the grantor to the grantee, is a mortgage.

2. A policy of insurance containing a provision that if any change take place in the title, interest, or possession of the property insured, by sale, transfer, or conveyance, without the consent of the insurer, the policy shall become void, is not invalidated by the making of a mortgage. The words ‘ title’ or ‘ possession,’ as here used, mean an actual change in law and equity, and the word ‘ interest’ means a change in the insurable interest of the owner of the property, neither of which is affected by the execution of a mortgage.

3. Where a policy of insurance stipulates that it shall become void by the taking of additional insurance without the consent of the insurer, such stipulation is not within the provisions of section 3643, Rev. St., for the reason that additional insurance does, as a matter of law, increase the risk, and, if taken without the consent of the insurer, invalidates the policy.

H. C. Ranney and C. W. Fuller, for plaintiff in error.

White, Johnson & McCaslin, for defendants in error.

MINSHALL, C. J. (after stating the facts).

1. The first question presented arises on the second defense. The evidence sustained the reply of the plaintiff, to the effect that the instrument was simply a mortgage. A separate written instrument was given by Rhodes, stating that the conveyance was given to secure the payment of a promissory note to him by Clark and wife, for $2,000, and his liability for them on an injunction bond, and expressly stipulated that the conveyance ‘ was in the nature of a security’ to him for the above purposes. Hence it was simply a mortgage. It seems well settled in this state and elsewhere that the making of a mortgage does not violate a provision in a policy of insurance that any change in the title, interest, or possession of the assured in the property, without the assent of the insurer, shall avoid the policy. The mortgage, being simply a security for the debt, is extinguished by its payment, without any reconveyance. The mortgage of itself does not make the mortgagee a freeholder, and a judgment recovered against him does not become a lien on the land, nor is it liable to the dower rights of his wife. It has none of the incidents of a legal or equitable title. True, upon foreclosure and sale, the mortgagee may by purchase at the sale become the owner of the land, but this is a right he enjoys in common with all others. It is also true that, as between the mortgagor and mortgagee, the latter, on condition broken, is regarded as the legal, but not as the equitable, owner. The mortgagor remains the equitable owner until the property is sold under the order of the court. Until then he may, by paying the debt, redeem the land. So that his insurable interest in the property remains the same, which is the ‘ interest’ meant by the use of the word in the language...