Swearengen v. Hartford Fire Ins. Co. 1

• Decision Date: 11 December 1899
• Citation: 56 S.C. 355,34 S.E. 449
• Parties: SWEARENGEN. v. HARTFORD FIRE INS. CO. et al.1
• Court: South Carolina Supreme Court

34 S.E. 449

56 S.C. 355

SWEARENGEN.

v.HARTFORD FIRE INS. CO. et al.¹

Supreme Court of South Carolina.

Dec. 11, 1899.

EQUITY — INSURANCE POLICY — PROCEEDS — EQUITABLE LIEN—JURY TRIAL—COMPLAINT — SUFFICIENCY — MORTGAGEE'S INTEREST-PRESUMPTION — ASSIGNMENT OF POLICY — PAYMENT TO ASSIGNEE.

1. An action by a mortgagee against an insurance company and the mortgagor, to enforce an equitable lien on the proceeds of a policy on the mortgaged premises, is an equitable action, the issues in which should be tried by the judge as chancellor.

2. A complaint to enforce an equitable lien on the proceeds of a policy, alleging an agreement by the mortgagor to insure for plaintiff's benefit, and the subsequent taking out of insurance by the mortgagor in his own name, and that after loss the mortgagee demanded the mortgagor to transfer the policy to him, which the mortgagor, contrary to the agreement, refused to do, sufficiently alleges that the policy was taken out by the mortgagor with intent to hold it for the mortgagee's benefit, to avoid a demurrer on the ground that the facts stated are not sufficient to constitute a cause of action.

3. The law will presume that insurance taken out by a mortgagor in his own name, after an agreement to insure for the mortgagee's benefit, was taken out, in pursuance of the agreement, for the mortgagee's benefit.

4. Where a policy of fire insurance was transferred after loss, for value, to one without notice that a mortgagee of the premises had an equitable lien on the proceeds thereof by reason of an agreement of the mortgagor to insure for the mortgagee's benefit, payment of the policy by the company to such assignee is a good defense to an action by the mortgagee to enforce his equitable lien, though the company made such payment with notice of the mortgagee's equity, since it was legally liable to pay such assignee, his claim being superior to that of the mortgagee's.

Appeal from common pleas circuit court of Edgefield county; R. C. Watts, Judge.

Action by Laura M. Swearengen against the Hartford Fire Insurance Company and Laura S. Hardy. From a judgment for plaintiff, defendants appeal. Reversed.

J. W. De Vore, for appellants.

Croft & Tillman, for respondent.

JONES, J. This is an action by a mortgagee against an insurer and the mortgagor to enforce an alleged equitable lien upon the proceeds of an insurance policy on the mortgaged premises taken out by the mortgagor in her own name. This appeal is from the judgment entered on the verdict of the jury in favor of plaintiff, and is the second appeal in this case. 52 S. C. 309, 29 S. E. 722.

On the call of the case for trial, defendants' attorney moved for a trial of the issues by the court without a jury as a cause in equity, but this was refused, and the case was submitted to a jury. This action of the court is excepted to as error. The right asserted by plaintiff was a mere equity, and the issues should have been tried by the judge as chancellor. The issues of fact not having been tried by the proper tribunal, the verdict and judgment thereon must be set aside.

The next question we notice is whether there was error in overruling the demurrers to the complaint interposed by defendants on the grounds (1) that the court was without jurisdiction, and (2) that the complaint did not state facts sufficient to constitute a. cause of action. There can be no doubt that the court had jurisdiction both of the parties and of the subject-matter, and this point need not be further noticed. As to the second ground, there are several specifications wherein it is alleged that the complaint failed, but we wall consider the one principally relied on, and common to the demurrers by both defendants, viz. that it is not alleged that the policy of insurance was taken out by the mortgagor with intent to perform the alleged agreement to insure for the benefit of the mortgagee. The complaint alleged an agreement to insure for the benefit of the mortgagee, and the subsequent taking out of insurance by the mortgagor in her own name; and the fifth paragraph of the complaint alleged, in effect, that after the loss by fire plaintiff demanded that the mortgagor turn over and transfer to plaintiff said policy of insurance, but that defendant, contrary to the...