The Lancashire Insurance Co. v. Boardman

• Decision Date: 05 June 1897
• Docket Number: 10054
• Citation: 49 P. 92,58 Kan. 339
• Parties: THE LANCASHIRE INSURANCE CO. v. W. F. BOARDMAN
• Court: Kansas Supreme Court

49 P. 92

58 Kan. 339

THE LANCASHIRE INSURANCE CO. v. W. F. BOARDMAN

No. 10054

Supreme Court of Kansas

June 5, 1897

Decided January, 1897.

Error from Sedgwick District Court. Hon. C. Reed, Judge.

Judgment affirmed.

Thomas C. Wilson, for plaintiff in error. Myron H. Beach, of counsel.

Holmes & Haymaker, for defendant in error.

OPINION

ALLEN, J.

Boardman brought suit on a policy of insurance for twenty-five hundred dollars, issued by the plaintiff in error to Flora Cowley on the fifth day of December, 1889, alleging in his petition the execution of the policy, payment of the premium, and the destruction by fire of the property insured. It was also alleged that the Sedgwick Loan and Investment Company loaned Flora Cowley the sum of twenty-five hundred dollars, for which she executed her bond secured by mortgage covering the property insured; that, as additional security for the loan, the said Flora Cowley, with the consent of the duly authorized agent of the defendant, assigned the policy of insurance to the Sedgwick Loan and Investment Company that said investment company duly assigned to the plaintiff the mortgage and the debt secured thereby, and that the defendant's agent attached to the policy what is denominated as a mortgage clause, which bears date the day on which the policy was issued and the essential parts of which read as follows:

"Policy No. 1,510,005, in name of Flora Cowley. Agency at Wichita Kan. Loss, if any, payable to the Sedgwick Loan and Investment Company, mortgagee or trustee, or its assigns, as its interest may appear, as herein provided. It being hereby understood and agreed that this insurance, as to the interest of the mortgagee or trustee, only, therein, shall not be invalidated by any act or neglect of the mortgagor or owner of the property insured, nor by the occupation of the premises for purposes more hazardous than are permitted by the terms of this policy. Provided, that the mortgagee or trustee or assigns shall notify this company of any change of ownership or increase of hazard which shall come to his or their knowledge, and shall have permission for such change of ownership or increase of hazard duly indorsed on this policy. And provided further, that every increase of hazard not permitted by the policy to the mortgagor or owner, shall be paid for by the mortgagee or trustee or assigns, on reasonable demand and after demand made by this company upon, and refusal by the mortgagor or owner to pay, according to the established schedule of rates.

"It is also agreed that whenever this company shall pay the mortgagee or trustee or assigns any sum for loss under this policy, and shall claim that as to the mortgagor or owner no liability therefor exists, it shall at once and to the extent of such payment be legally subrogated to all the rights of the party to whom such payments shall be made, under any and all securities held by such party for the payment of such debt; but such subrogation shall be in subordination to the claim of said party for the balance of the debt so secured; or said company may, at its option, pay the mortgagee, or trustee or assigns, the whole debt so secured, with all the interest which may have accrued thereon to the date of such payment, and shall thereupon receive from the party to whom such payment shall be made, an assignment and transfer of said debt, with all securities held by said parties for the payment thereof.

"The foregoing provisions and agreements shall take precedence over any provision or condition conflicting therewith contained in said policy. This clause is attached to, and is made a part of, the said policy from the fifth day of December, 1889."

For a seventh defense, the defendant set up in its answer:

"That the said policy of insurance issued by it, bearing date December 5, 1889, and numbered 1,510,005, contains the following provision, condition and agreement, constituting a part thereof and one of the considerations therefor, to wit:

"'1 . . . Upon the commencement of proceedings of foreclosure, or upon a sale under a deed of trust, . . . or if any...