The Trust Company of St. Louis County v. The Phoenix Insurance Company of Hartford

• Decision Date: 04 March 1919
• Parties: THE TRUST COMPANY OF ST. LOUIS COUNTY, Appellant, v. THE PHOENIX INSURANCE COMPANY OF HARTFORD, CONNECTICUT, Respondent. THE TRUST COMPANY OF ST. LOUIS COUNTY, Respondent, v. GERMAN-AMERICAN INSURANCE COMPANY OF NEW YORK, Appellant
• Court: Missouri Court of Appeals

210 S.W. 98

201 Mo.App. 223

THE TRUST COMPANY OF ST. LOUIS COUNTY, Appellant, v. THE PHOENIX INSURANCE COMPANY OF HARTFORD, CONNECTICUT, Respondent.

THE TRUST COMPANY OF ST. LOUIS COUNTY, Respondent, v. GERMAN-AMERICAN INSURANCE COMPANY OF NEW YORK, Appellant

Court of Appeals of Missouri, St. Louis

March 4, 1919

Appeal from the Circuit Court of St. Louis County.--Hon. John W McElhinney and Hon. Gustave A. Wurdeman, Judges.

AFFIRMED (as to The Phoenix Insurance Company of Hartford Connecticut).

REVERSED AND REMANDED (with directions) as to The German-American Insurance Company of New York.

O'Niell Ryan and Guy A. Thompson, for Insurance Companies.

(1) The insured, George C. and Martha L. Shanks, having sold to J. R Kennon the property covered by the policies in question and no notice of such change of ownership having been given to the insurance companies, the insurance as to the said Shanks and Kennon is void. Marcus v. Insurance Co., 187 Mo.App. 134. (2) Had these policies been made payable merely to the Trust Company of St. Louis County, as its interest might appear, said company would have been merely an appointee to receive what, if anything, would be payable to the owner, and if for any reason the owner could not recover the appointee could not recover. Kansas City Paper Box Co. v. Insurance Co. , 100 App. 691; Roper v. Natl. Fire Ins. Co., 76 S.E. 869; Firemen's Fund Insurance Co. v. Palatine Ins. Co., 88 P. 907; Delaware Ins. Co. v. Greer, 120 F. 916, (C. C. A 8th Circuit, per Sanborn); Moore v. Hanover Ins. Co., 141 N.Y. 219; Agricultural Ins. Co. v. Hamilton, 82 Md. 88. (3) The Union (or Standard) Mortgage Clause that was attached to the policies constituted in each case an independent contract of insurance with The Trust Company of St. Louis County, trustee, for the benefit of the cestui que trust, ingrafted upon the main contract of insurance contained in the policy itself, and to be rendered certain and understood by reference to the policy, and the Trust Company of St. Louis County is firmly bound and its rights firmly fixed by the provisions of said mortgage clause. Syndicate Inc. Co. v. Bohn, 65 F. 165; Heilbrunn v. German Alliance Ins. Co., 140 App., Div. (N.Y.) Suppl. 374, Affd. 202, N.Y. 610; Reed v. Firemen's Ins. Co., 81 N.J.L. 523, 35 L. R. A. (N. S.) 343; (4) The proviso in said mortgage clause, that the Trust Company of St. Louis County should notify the insurance company of any change of ownership coming to its knowledge, created a condition. Simpson v. Tittrell, 1 Croke, Eliz. 242; Lord Cromwell's Case, 2 Coke, 69; Brennan v. Brennan, 185 Mass. 560; Brewer v. Rust, 20 Okl. 776, 781; Rich v. Atwater, 16 Conn. 419; Hill v. Decatur, 22 Ga. 206; Bennett v. Baltimore, etc., Soc., 91 Md. 20; Locke v. Farmers L. & T. Co., 140 N.Y. 135, Forscht v. Green, 53 Pa. 108, 140. Anderson's Law Dictionary: "No better word expresses a condition, and it is always so taken unless the context shows that the intention was to create a covenant." Bouvier: "A proviso always implies a condition unless subsequent words change it to a covenant." Webster: "On condition; by stipulation." Century: "On condition; or these terms." Oxford: "With the proviso or condition that." (5) The fact of the change of ownership did come to the knowledge of the plaintiff. Link v. Jackson, 164 Mo.App. 195. Brown v. Connecticut Fire Ins. Co., 195 S.W. (Mo. App.) 62, l. c. 65 (Per Becker, J.). (6) Accordingly, the plaintiff having violated said condition by failing to give notice to the insurance companies of the change of ownership, cannot recover. Ormsby v. Phoenix Company of Brooklyn, 58 S. Dak. 72; Balantshik v. Globe Fire Ins. Co., 10 Miscel. 369, 31 N.Y.S. 32; Continental Ins. Co. v. Anderson, 107 Ga. 541; Natl. Bank v. Insurance Company, 88 Cal. 497; Cole v. Germania Ins. Co., 99 N.Y. 36; Gasner v. Metropolitan Ins. Co., 13 Minn. 483;

T. K. Skinker for the plaintiff in both cases.

(1) There is no such evidence that any change of ownership came to the knowledge of the plaintiff before the fire, as will warrant the court in inflicting upon the plaintiff forfeiture of its rights under these policies. (a) Kennon's letter does not necessarily mean that there was a change of ownership. (b) Neither did it impart knowledge to the plaintiff; it only gave information of a claim of ownership. Van Raalte v. Harrington, 101 Mo. 602; Utley v. Hill, 155 Mo. 232, 264; Brown v. Insurance Co., 195 S.W. 62. (2) In neither of these policies is there any provision which entitles the company to claim a forfeiture in case the mortgagee or trustee fails to give the company notice of any change of title which may come to his knowledge. (a) The German-American policy contains no provision for forfeiture. There can therefore be none. Keeton v. National Union, 182 S.W. 798; Pioneer Loan Co. v. Insurance Co., 17 Wash. 175; Phoenix Insurance Co. v. Omaha L. & T. Co., 41 Neb. 834, 846; Hanover F. Insurance Co. v. Bohn, 48 Neb. 743, 747; Haas v. Insurance Company, 84 Neb. 682. (b.) In the absence of words of forfeiture none will be enforced. Dezell v. Fidelity, etc. Co., 176 Mo. 253, 280, 281. (c) The provision in the body of the policy that if any change shall take place in the title the policy shall be void does not affect the plaintiffs' rights. 1. Because the mortgage clause stipulates that as against the mortgagee the acts of the mortgagor shall have no effect. Adams v. Insurance Co., 115 Mo.App. 21, 25; Breeyear v. Insurance Co., 71 N.H. 445. 2. Because the body of the policy stipulates that as against a mortgagee no such provision shall be effective unless repeated in the mortgage clause. Hastings v. Insurance Co., 73 N.Y. 141; Senor v. Insurance Co., 181 Mo. 104, 115; Key v. Insurance Co., 101 Mo.App. 344, 350; Lombard Investment Co. v. Insurance Co., 62 Mo.App. 315; Welch v. Insurance Co., 148 Cal. 223; Boyd v. Insurance Co., 25 Wash. 447; Oakland Home Ins. Co. v. Bank, 47 Neb. 717; East v. Insurance Company, 76 Miss. 697; Queen Ins. Co. v. Saving Ass'n. 175 Ill. 115; Christensen v. Insurance Co., 117 Iowa 77; Edge v. Insurance Co., 20 So. Dakota, 190; Whitney v. Burkhardt, 178 Mass. 535; Smith v. Insurance Co., 25 R. I. 260; Union Institution v. Ins. Co., 196 Mass. 230; Eliot, etc., Bank v. Assurance Co., 142 Mass. 142; Savings Bank v. Insurance Co., 166 Mass. 189; Magoun v. Insurance Co., 86 Minn. 486; Moore v. Insurance Co., 100 Minn. 374. (d) The Phoenix policy does contain words of forfeiture, but they only apply in case of failure to pay premium for increased hazard not for failure to give notice of change of ownership. The rule of strict construction against forfeitures applies. Matthews v. Modern Woodmen, 236 Mo. 326, 342; Settle v. Insurance Co., 150 Mo.App. 527; Roseberry v. Association, 142 Mo.App. 552; Burchard v. Association, 139 Mo.App. 621; Mining Co. v. Casualty Co., 143 Mo.App. 555; La Force v. Insurance Co., 43 Mo.App. 518, 530; Belch v. Schott, 171 Mo.App. 357; Still v. Insurance Co., 185 Mo.App. 550; Terminal Ice, etc., Co. v. Insurance Co., 194 S.W. 722; Hale v. Insurance Co., 46 Mo.App. 508; Hoffman v. Accident Co., 56 Mo.App. 301; Canning Co. v. Guaranty Co., 154 Mo.App. 327; Walton v. Insurance Co., 162 Mo.App. 316; Renn v. Supreme Lodge, 83 Mo.App. 442; Foglesong v. Modern Brotherhood, 121 Mo.App. 548; 553; Leech v. Order of Railroad Telegraphers, 130 Mo.App. 5, 17; James v. Casualty Co., 113 Mo.App. 622, 630; Keeton v. National Union, 178 Mo.App. 301; Levine v. Supreme Lodge, 122 Mo.App. 547; Northey v. Insurance Co., 110 Cal. 547. 3. At the time of the receipt of Kennon's letter and from that time forward until after the fire, the plaintiff was not the owner of the policies, but was a mere naked trustee in the deed of trust, and as such was not bound to give notice of a change of ownership even if one came to his knowledge.

BECKER, J. Reynolds, P. J., and Allen, J., concurs.

OPINION

BECKER, J.--

Plaintiff below instituted two suits upon policies of fire insurance, one against the Phoenix Insurance Company, in which judgment resulted for defendant; the other against the German-American Insurance Company, in which judgment resulted in favor of plaintiff. In due course appeals were brought here by the losing party in each case below.

While plaintiff filed both suits in the circuit court of St. Louis County, the case against the Phoenix Insurance Company was assigned to Division No. 1, and the case against the German-American Insurance Company was assigned to Division No. 2. Inasmuch as a trial to a jury had been waived and the facts in each case being identical, excepting only the wording of the mortgage clause in each of the policies of insurance sued on, the judge of Division No. 1 and the judge of Division No. 2 of said circuit court, sat and heard the cases together. In light of this fact both appeals are brought here upon a joint abstract of the record.

Each policy of insurance, as originally written, insured George C. and Martha L. Shanks against direct loss or damage by fire to a house numbered 6232 Chatham avenue in St. Louis County, Missouri. The Phoenix policy was in the sum of $ 500 and was issued July 6, 1909, and the German-American policy was in the sum of $ 600 and was issued August 30, 1909; each policy insuring for a period of three years from date of issue.

The said Shanks borrowed from the plaintiff, The Trust Company of St. Louis County, the sum of $ 1100, for which they executed their principal note in said sum, payable three years from date, and their six semi-annual interest notes each in the sum of $ 33. All of the notes were made payable to the order of F. J. Hollocher, who was the Assistant Secretary of the plaintiff company. To secure the payment of these said notes the Shanks executed a deed of trust...