Washington Nat. Bank v. Smith

• Decision Date: 13 July 1896
• Citation: 15 Wash. 160,45 P. 736
• Parties: WASHINGTON NAT. BANK OF SEATTLE v. SMITH ET AL. (AMERICAN CENT. INS. CO. OF ST. LOUIS ET AL., GARNISHEES, THOMSON, INTERVENER.
• Court: Washington Supreme Court

45 P. 736

15 Wash. 160

WASHINGTON NAT. BANK OF SEATTLE v. SMITH ET AL. (AMERICAN CENT. INS. CO. OF ST. LOUIS ET AL., GARNISHEES, THOMSON, INTERVENER.

Supreme Court of Washington

July 13, 1896

Appeal from superior court, King county; Richard Osborn, Judge.

Action by the Washington National Bank of Seattle, against E. D Smith, defendant, the American Central Insurance Company of St. Louis and the Ph nix Insurance Company of Brooklyn as garnishees, and Jane Thomson, intervener. Judgment for plaintiff, and intervener appeals. Affirmed.

Smith &amp Cole, for appellant.

Boyer & Guie and Donworth & Howe, for respondent.

HOYT, C.J.

The intervener and appellant was the owner and holder of a certain mortgage made by the defendant E. D. Smith and Margaret B. Smith, his wife. This mortgage was in the usual form of a real estate mortgage, and the property covered thereby was not so described as to include anything not a part of the real estate. Default having been made in the conditions of the mortgage, appellant commenced proceedings to foreclose it, pending which she caused insurance policies to be issued upon the mill building situated on the land covered by the mortgage, and certain machinery situated therein. The property, including said machinery, was partially destroyed by fire, and the amount of the loss under such policies of insurance adjusted. Thereafter the plaintiff caused the defendant insurance companies to be summoned as garnishees of the mortgagors, and sought to secure the application of the money due therefrom to the payment of a judgment which it had against the mortgagors. The appellant was allowed to intervene in these garnishee proceedings, and thereafter such agreements and stipulations were entered into between all the parties that substantially the only question left for the determination of the court was as to whether the money to be paid for the partial destruction of certain machinery in the mill was the property of the mortgagors or of the mortgagee.

There was another question left open which appellant has suggested was so decided as to entitle her to a reversal of the judgment. This question grew out of the claim that it was not shown that a sufficient amount of the loss as adjusted was paid on account of the machinery (which, it was claimed, was personal property, and not a part of the real estate) to pay the amount adjudged to be due the plaintiff. But, under the stipulations of the parties and the circumstances surrounding the case at the time such stipulations were entered into, we are satisfied that there is nothing in this claim, and it requires no further consideration at our hands.

The intervener and appellant founds her right to the money to be paid by the insurance companies for the partial destruction of the machinery in question upon two propositions: One. That the contracts of insurance were solely between herself and the insurance companies, and the mortgagors in no sense parties thereto, nor interested therein; that, for that reason, any money to be paid upon such contracts would belong to her, and not to the mortgagors. The policies were taken out in the name of E. D Smith, one of the mortgagors; and, the other mortgagor being his wife, they must receive the same construction as they would if taken out in the names of both of the mortgagors. They were in the usual form of such contracts between an insurance company, on the one part, and the insured upon the other; and thereby such mortgagors were insured to a certain amount against damage by fire to the property in question. The only evidence of the interest of the mortgagee was a statement indorsed upon each of the policies, to the effect that the loss, if any, should be paid to the appellant mortgagee as her interest might appear. Under the terms of the mortgage, it was the duty of the mortgagors to keep the buildings situated upon the premises covered by the mortgage insured in the sum of $40,000; and thereunder it was the right of the mortgagee, if the mortgagors did not do this, to herself cause it to be done, at the expense of the mortgagors, the repayment of the premium paid by her for that purpose to be secured under the mortgage. Such being the conditions of the mortgage, the reasonable and ordinary interpretation of the action of the appellant in taking out the policies of insurance would be that she was acting thereunder, and that the premium which she might have paid in so doing was or might have been charged to the mortgagors and collected in addition to the amount due under the terms of the mortgage. If this was the effect of her taking out the policies of insurance, there would be no ground for the contention that she had any interest therein, excepting as mortgagee of the property covered by the mortgage; and it would follow that if she had no interest in the machinery which was damaged, as mortgagee, she would have no interest in the moneys to be paid by the insurance companies on account of such damage. The policies of insurance under these circumstances would have been for the sole benefit of the mortgagors, excepting in so far as they were qualified by the statements indorsed thereon that the loss, if any, should be payable to the appellant mortgagee as her interest should appear; and, if she had no interest as such mortgagee in the machinery damaged, she would have no interest in the moneys to be paid under said policies on account of such damages.

But it is contended on the part of the appellant, and proof tending to establish such contention was introduced at the trial that, as a matter of fact, the policies of insurance were not taken out under the conditions of the mortgage which authorized the mortgagee to keep the property insured if the...