126 Ind. 410 | Ind. | 1891
— The appellee recovered judgment upon a policy of insurance issued to him by the appellant, and from that judgment this appeal is prosecuted.
The first question for our decision is whether there was ■such an encumbrance upon the property insured as avoided the policy. The words of the policy are sufficiently comprehensive to include all liens that constitute encumbrances in a legal sense, and if such an encumbrance exists the action must fail, for it is unquestionably the law that a legal -encumbrance will defeat the assured, where it is created or .suffered in violation of the terms of the contract. Pfister v. Gerwig, 122 Ind. 567; Continental Ins. Co. v. Munns, 120 Ind. 30.
The only point open to debate is whether an encumbrance was created in violation of the provisions of the policy, and to determine this question it is necessary to refer to the facts which bear upon it. On the 17th day of July, 1877, a transcript of a judgment in favor of Armstrong, Nixon & Co., against William F. Giles, was filed in the office of the clerk ■of the oounty in which the property insured was situated. On this judgment William Vanlue, the appellee’s vendor and then the owner of the property, was replevin bail. After
We have assumed in our statement that the policy embraced prior as well as future encumbrances, as this is tacitly conceded by the appellee, and we do not touch upon the question of construction, decided in the case of Continental Ins. Co. v. Munns, supra. We have also assumed that the rents collected by Vaile under the agreement with the judgment creditors and their debtor were more than sufficient to satisfy the judgment, and this we have done because there is evidence of that fact, which we have no right, under a long settled rule, to disregard.
The judgment was originally an encumbrance upon the property of the replevin bail, as our statute creates a lien against the property of one who enters himself as replevin bail upon a judgment. But it does not follow that a lien continues although there is no satisfaction of record. It would be an inexcusable sacrifice of substance to shadow to hold that a lien continued after payment of the judgment because the formal entry of satisfaction on the record was not made. It is very clear that when the amount of the judgment was paid the lien ceased to exist. State, ex rel., v. Salyers, 19 Ind. 432; Myers v. Cochran, 29 Ind. 256; Shields v. Moore, 84 Ind. 440; Klippel v. Shields, 90 Ind. 81; Chapin v. McLaren, 105 Ind. 563.
The application of the principle that payment extinguishes
It is immaterial whether the amount collected by Vaile reached the judgment creditors prior to the time the policy was taken out or not, for as soon as Vaile received the amount the replevin bail was released. It is probably true that the bail was released as soon as the contract providing for a collection of rents by Vaile was entered into, inasmuch as the effect of that contract was to extend the time of payment, and if it did have this effect the replevin bail was released, because an extension of time releases one who occupies, as he did, the position of a surety. But, however this may be (we decide nothing upon this point), we think it clear that when Vaile, as the representative of the judgment creditors, received the amount of the judgment, it ceased to constitute an encumbrance within the meaning of the law.
There is, however, another phase of the question, whether there was or was not an encumbrance upon the property insured. On the day that the land was conveyed to the appellee he executed to the vendor a mortgage containing this condition : “ The condition of this mortgage is that the said Albert M. Vanlue has taken a conveyance of the above real estate upon the condition subsequent that he shall furnish to the said William Vanlue a maintenance and support during the life of the latter, which maintenance is agreed to be one-half of the net proceeds of said farm, which is to be delivered annually to William Vanlue. In case of a performance of the contract by the said Albert M. Vanlue, this mortgage shall be null and void, and at the death of William Vanlue the same shall be cancelled and said real estate shall vest absolutely in said Albert M. Vanlue free from this encumbrance. And the mortgagor expressly agrees to perform the contract above secured, and upon failure this
In almost any other case than that of an action upon an insurance policy the question would be entirely free from difficulty, for the mortgage would unquestionably be regarded as an encumbrance in ordinary cases, such as actions between vendor and vendee, and the like. Richter v. Richter, 111 Ind. 456; Copeland v. Copeland, 89 Ind. 29; Wilson v. Wilson, 86 Ind. 472; Prescott v. Trueman, 4 Mass. 627; Mitchell v. Warner, 5 Conn. 497; Spurr v. Andrew, 6 Allen, 420; Cathcart v. Bowman, 5 Pa. St. 317; Post v. Campau, 42 Mich. 90; 6 Am. & Eng. Encyc. of Law, 639.
There is some diversity of opinion as to whether an instrument securing the performance of a contract for support and maintenance can be deemed a mortgage. We think it clear, however, that whatever name may be given the instrument, the effect is the same in all ordinary cases, for an encumbrance is created. Bryant v. Ershine, 55 Me. 153; Bethlehem v. Annis, 40 N. H. 34; Soper v. Guernsey, 71 Pa. St. 219; Austin v. Austin, 9 Wt. 420. But decisions in cases concerning deeds and mortgages do not fully control cases where the controversy concerns the right to forfeit a policy of insurance, and a close adherence to those decisions would lead to an erroneous conclusion in a case where the issue is whether there has been a forfeiture of a policy of insurance. The ground upon which rests the distinction between contracts of insurance and other contracts is a solid one, for the contract of insurance is, in many essential respects, a pecu
We are required by the rules to which we have referred, to give the policy before us a very strict construction against the appellant, and to avert a forfeiture if we can do so without doing violence to the language of the contract. But, liberal as the rule is in favor of the assured, it will not authorize a court to make a contract for the parties, nor to disregard one made by the parties themselves. Havens v. Home Ins. Co., 111 Ind. 90; Phenix Ins. Co. v. Lamar, 106 Ind. 513 (55 Am. Rep. 764); McGowan v. People’s M. F. Ins. Co., 54 Vt. 211; Supple v. Iowa St. Ins. Co., 58 Iowa, 29.
The decisions, as we have indicated, declare that the word “ encumbrance ” has a limited effect in contracts of insurance, and upon the general doctrine there is little, if any, diversity of opinion. The clash is upon the application of the approved general doctrine, not as to the doctrine itself. Whether the provision declaring that an encumbrance shall forfeit the policy before us is violated by the instrument executed by the assured to his vendor is the problem which we are required to solve, for we regard the general doctrine, of which we have spoken, as too firmly established and too strongly grounded on principle to be successfully challenged. In order to justly solve this problem it is necessary to analyze the instrument and the evidence respecting it. The instrument is a peculiar one. It does not secure the payment of money, nor does it provide for the performance of a general engagement to perform a designated contract; it provides for the performance of a specific act, namely, the delivery to the vendor of one-half of the net proceeds of the farm, and that the delivery of the net proceeds of the farm shall render the instrument “ null and void.” But while the instrument provides for the performance of a specific act and that performance shall defeat its enforcement, it also provides that in case of default “ this mortgage may be foreclosed accordingly.” There is, therefore, an engagement to perform a specific act, and a provision for enforcing performance by a decree of foreclosure. If the instrument has any force at all it creates a lien upon the land it describes, for it declares in express words that a lien is created, and provides for the foreclosure of the lien. It is not possible to escape the force of the provisions respecting the conveyance of the land and the mode of enforcing the lien created, for they clearly import that there is
We have given careful consideration to the cases referred to by the appellee, but we are unable, to regard them as sustaining the position that the mortgage executed by him was not an encumbrance. The ease of Mason v. Agricultural,
The appellee argues that the appellant waived its right to insist upon a forfeiture, and there might be plausibility, if not strength, in the argument, if facts constituting a waiver had been replied to the answer pleading the encumbrance. Phenix Ins. Co. v. Tomlinson, 125 Ind. 84; Schreiber v. German-American, etc., Ins. Co., 43 Minn. 367; McMartin
But where an answer pleads facts showing the existence of such an encumbrance as avoids the policy, it is incumbent upon the assured, if he seeks to avail himself of a waiver, to plead the facts constituting the waiver, for the general denial does not tender such an issue. A waiver arises out of new and affirmative matter, and such matter must be replied in order to avoid an answer which pleads an affirmative defence. A single paragraph of a reply can not be good as a denial and in confession and avoidance.
Judgment reversed.