Lowry v. Insurance Co. of North America

| Miss. | Mar 15, 1897

Whitfield, J.,

delivered the opinion of the court.

The precise question presented by this record is this: When the owner of real and personal property mortgages it to a lender of money for a loan, and then insures the said property in his own name, the contract of insurance providing that the loss shall be payable to such mortgagee as his interest may appear, and the amount of the mortgage debt exceeds both the whole amount of such insurance and the whole value of said property, can the mortgagee, in such case, the property being destroyed by fire, maintain an action at law, in his own name alone, on such policy ? That he can is clear on principle, and thoroughly established by the decided weight of authority. See, as putting the matter at rest, the authorities cited in the exhaustive note to Chipman v. Carroll, 25 Law. Rep. Ann., 305; Motley v. Manufacturers’ Ins. Co., 50 Am. Dec., 591; Maxey v. New Hampshire Fire Ins. Co., 54 Minn., 272" court="Minn." date_filed="1893-07-21" href="https://app.midpage.ai/document/maxcy-v-new-hampshire-fire-ins-7968010?utm_source=webapp" opinion_id="7968010">54 Minn., 272; Wood on Fire Ins., vol. 2, p. 112; May on Ins. (3d ed.), vol. 2, sec. 449, p. 1014; Ostrander’s Fire Ins., sec. 282, p. 602; Pitney v. Glens Falls Ins. Co., 65 N.Y., 6" court="NY" date_filed="1875-01-05" href="https://app.midpage.ai/document/pitney-v--glens-falls-insurance-co-3604103?utm_source=webapp" opinion_id="3604103">65 N. Y., 6; and compare Ins. Co. v. Stein, 72 Miss., 950" court="Miss." date_filed="1895-03-15" href="https://app.midpage.ai/document/lum-v-city-of-vicksburg-7987744?utm_source=webapp" opinion_id="7987744">72 Miss., 950.

Cases cited by learned counsel for appellee are not in point, except Williamson v. The Michigan Fire, etc., Ins. Co., 86 Wis., 393" court="Wis." date_filed="1893-11-28" href="https://app.midpage.ai/document/williamson-v-michigan-fire--marine-insurance-8184406?utm_source=webapp" opinion_id="8184406">86 Wis., 393. This case cites Hodgman v. German Ins. Co., same volume, 323, but in that case the mortgage debt “was considerably less than the amount of insurance.” It also cites Chandos v. American Fire Ins. Co., 84 Wis., 184" court="Wis." date_filed="1893-01-31" href="https://app.midpage.ai/document/chandos-v-american-fire-insurance-8184160?utm_source=webapp" opinion_id="8184160">84 Wis., 184, the unsoundness of which case is demonstrated in the note to it in 19 Law. Rep. Ann., 321, where “the peculiar mistakes ” of the opinion in that case are severely criticised. It also cites 2 Wood on Ins., p. 1122, where that author, on p. 1124, expressly says: “But where the interest of the payee covers the whole loss, he may sue in his own name.” It also cites Martin v. Franklin Fire Ins. Co., 38 N. J. Law, 140. But, as is shown in note, supra, 25 Law. Rep. Ann., 308, that case holds that either mortgagor or mortgagee may sue. Fire Ins. Co. v. Felrath, 77 Ala., 194" court="Ala." date_filed="1884-12-15" href="https://app.midpage.ai/document/fire-insurance-companies-v-felrath-6512096?utm_source=webapp" opinion_id="6512096">77 Ala., 194, is a case where the insurance was for $1,550, and the mortgage for $1,080, and the opinion goes on the ground that to allow the mortgagee to sue in such cases alone would be to ‘ ‘ split one contract into two causes of action, ’ ’ and that the provision, in such case, is a mere appointment of a payee of part of the money.

But this very case is cited in May on Insurance, vol. 2, sec. 449, p. 1014, n. 7, where it is shown that the holding was because the mortgage debt was less than the amount of the insurance. It is also distinguished in the note, supra, 25 L. R., Ann., p. 308, though it should be there stated, not that “the mortgage did not cover all the property insured,” but that the mortgage debt was less than the amount of the insurance. But, finally, the court, in Felrath’s case, itself, says (77 Ala., 199): ‘ ‘ In some of these cases ’ ’ (holding that the mortgagee can sue alone) “the appointee’s claim equaled or exceeded the whole sum insured, which, of course, involved no splitting up of the cause of action. This distinguishes such cases from this.”

Another case cited by learned counsel for appellee, is Grosvenor v. The Atlantic Fire Ins. Co., 17 N.Y., 391" court="NY" date_filed="1858-06-05" href="https://app.midpage.ai/document/grosvenor-v--the-atlantic-fire-insurance-co-of-brooklyn-3624830?utm_source=webapp" opinion_id="3624830">17 N. Y., 391, decided in 1858. This case overrules two earlier cases, and three judges dissented, and, besides, it is distinguished in Pitney v. Glens Falls Ins. Co., 65 N. Y., supra, on the ground that in Grosvenor’s case the policy did not have the clause, “as the mortgagee’s interest may appear. ” It is in clear conflict with this last case.

Indeed, some courts hold that in a case like the one before us, the mortgagee cannot maintain an action when it does not appear that the mortgage debt is still unpaid. Westchester Fire Ins. Co. v. Coverdale, 48 Kan., 446" court="Kan." date_filed="1892-01-15" href="https://app.midpage.ai/document/westchester-fire-insurance-v-coverdale-7888846?utm_source=webapp" opinion_id="7888846">48 Kan., 446. And Mr. May’so lays down the law (May on Insurance (3d ed), vol. 2, sec. 449, p. 1014), as does the supreme court of Minnesota, Maxey’s case, supra, at p. 276. See, also, Phœnix Ins. Co. v. Omaha Loan & Trust Co., 25 Law. Rep. Ann., 679. As to this we decide nothing now.

A large part of the argument of counsel for appellee in this brief is a mere adoption of the opinion of Judge Orton in Hammel v. Queen Ins. Co., 50 Wis., 240" court="Wis." date_filed="1880-10-12" href="https://app.midpage.ai/document/hammel-v-queen-insurance-co-of-london--liverpool-6603250?utm_source=webapp" opinion_id="6603250">50 Wis., 240 (cited in Ostrander’s Fire Insurance, pp. 597, 598), but, unfortunately for counsel, it is the dissenting opinion.

The judgment is reversed, the demurrer overruled, and the cause remanded.