17 Wash. 175 | Wash. | 1897
The opinion of the court was delivered by
Action at law to recover on a fire insurance policy. The plaintiff procured a policy of insurance from the defendant against loss by fire in the amount of $1,500, upon a store building in the town of Post Palls, Idaho. The policy ran directly to Celinda Hewsom, and the contract of insurance was for the term of one year from the 30th of August, 1893, at noon, to the 30th of August, 1894, against all direct loss or damage by. fire. The application for the insurance was made by the plaintiff as mortgagee of the property owned then by Celinda Hewsom and her husband. It contained the stipulation, “Loss, if any, payable to [the plaintiff named] as mortgagee or trustee per mortgage clause attached,” which mortgage clause contained, among other things, the following provisions :
“ It is hereby agreed that this insurance, as to the interests of the above named mortgagee or beneficiary in the trust deed only therein, shall not be invalidated by any act or neglect of the mortgagor or owner of the property insured, nor by the occupancy of the premises for purposes more hazardous than are permitted by the terms of this policy, nor by any change in title or possession, whether by legal process, voluntary transfer, or conveyance of the premises. Provided, that the mortgagee or beneficiary shall notify this company of any change of ownership, or increase of hazard which shall come to the knowledge of said mortgagee or beneficiary, and shall have permission for such change of ownership, or such increased hazard, duly endorsed on this policy.”
It will be observed that the question presented here is upon the sufficiency of the pleadings by the plaintiff. The complaint sets out the corporate capacity of the plaintiff and the defendant; and that Newsom and wife were the owners of the property covered by the policy of insurance, and as such owners executed and delivered a mortgage of $1,800 to the plaintiff for a valuable consideration; and that the mortgagors agreed to keep the premises insured against loss by fire, and the policy to have a mortgage clause attached, with the loss, if any, payable to plaintiff; and that in case of failure of the mortgagors to keep up the insurance, then the mortgagee to take out the insurance and pay the premiums, and the mortgage was to be security for the premiums paid; that for a breach of the conditions of the mortgage, plaintiff commenced a foreclosure suit about the 2d day of August, 1893, in the district court of Kootenai county, Idaho, and immediately served the defendant with summons; that during the pendency of the foreclosure suit, about August 28, 1893, Newsom and wife made, executed, acknowledged and delivered their deed, thereby
“ That said policy should be void if the interest of the insured be other than unconditional and sole ownership, ■or if the subject of the ownership of the insurance be a building on ground not owned by the insured in fee simple, or if any change other than by the death of the insured should take place in the interest, title or possession of the subject of the insurance whether by legal process or judgment, or by voluntary act of the insured ■or otherwise.”
Plaintiff replied, denying the absolute sale by BTewsom and wife to it on August 28th, and also alleging that plaintiff’s officers could not notify the defendant of the ■settlement of the foreclosure suit, and that notice was given of the pendency of the foreclosure; alleging that, by reason of the necessary lapse of time in procuring the abstract of title and in approving said title, and the time necessarily consumed by the transmission of the United ■States mails to and from the city of Minneapolis, plaintiff’s officers could not and did not have any notice or knowledge of the foreclosure suit at the time of making application for the policy of insurance, or at the time of the fire; and the plaintiff also alleges that it notified defendant of the pendency of the foreclosure suit and defendant issued the policy of insurance with full notice and knowledge of the suit.
Besides the covenant above mentioned in defendant’s ■answer relative to the ownership of the property, which was in the policy, there was also another stipulation as follows:
“ If with the consent of this company an interest under this policy shall exist in favor of a mortgagee or of any*180 person or corporation having an, interest in the subject of insurance other than the interest of the insured as described herein, the conditions hereinbefore contained shall apply in the manner expressed in such provisions and conditions of insurance relating to such insurance as shall be written upon, attached or appended hereto.”
1. Plaintiff, under the terms of its mortgage, when the mortgagors had failed to procure insurance for the buildings on the mortgaged premises, applied to defendant, a Minnesota corporation in Minneapolis, for a fire insurance policy, as a mortgagee, and paid the premium at the time of $67.50. The policy was forwarded to be countersigned at the agency of defendant at Spokane, Washington. The allegation of the complaint is that this application was made and the premium paid on the-day of August, 1893. We think it may reasonably be inferred that the premium was paid upon the application made at Minneapolis at least three days before the policy was delivered at Spokane. At the time the application was made bTewsom and wife, the mortgagors, were the owners of the premises insured. If, as maintained by the defendant, the presumption exists that plaintiff made a representation of the title in its application for insurance to defendant, then such statement of title was at that time true. In contemplation of both parties the premises were mortgaged and a mortgage foreclosure might be made and a change of title occur, and in such change of title plaintiff, mortgagee, might become the owner. Indeed, the contract of insurance with the plaintiff, the mortgagee, provided that no change of title or possession, etc., should affect .the contract.
We believe the rule supported by the better authority is that the contract of insurance with a mortgagee by an insurance company is a separate, distinct contract from that of the owner of the property, and that it is in contemplation between the parties to the contract that a change of title
May on Insurance (vol. 1, § 276 c), discussing foreclosure, says:
,£ If, however, the policy expressly provides that the ■commencement of foreclosure proceedings shall avoid it, the condition will he enforced. But where an application truly stated that no foreclosure proceedings had been begun and the policy stipulated that the commencement of any foreclosure proceedings shall immediately render this policy void, and no such proceedings were begun after the policy was issued, but there were such begun between the date of the application and the date of the policy, it was held that the company was hound, and the policy was not forfeited. The insurer must stipulate for the intervening period if he would cover it.”
This question has also been directly before the supreme court of Iowa in a case in which the facts are very similar to those in the one now under consideration. In that case the application for insurance was made February 23d, and stated that no proceedings had been commenced to enforce a mortgage on the property, which statement was true at
“ Upon the 3d of March it relied upon what the insured said about the property on the 23d of February. The company knew that the condition” of the property was liable to change in the interval, and employed no means to inform itself. We think it took its own risk in regard to such change. When it issued its policy on the 3d day of March, it seems to us that it undertook to insure the property as it then was. We do not think the policy can be understood as meaning that foreclosure proceedings commenced before that time would render the policy void. No one can read the provision against the commencement of foreclosure proceedings without being impressed that it was designed to provide merely for the future.” Day v. Hawkeye Ins. Co., 72 Iowa, 597 (34 N. W. 435).
This court in the case of Dooly v. Hanover Fire Ins. Co., 16 Wash. 155 (47 Pac. 507), held that a policy of insurance, containing a stipulation similar to the one in the case at bar — that if the ownership was not sole, unconditional ownership in fee, it was void — and where at the time the policy was written and delivered the insured was not such owner and where the insurance company had no knowledge of the title and no false representations had been made by the insured, was not vitiated. In effect, it was decided that the insurance company must inquire or inform itself about the title or else it will not be material. In the policy before us, as usual in fire insurance policies, there are numerous
2. But another phase of the contention for a forfeiture of the contract by the defendant may here be examined. It is true that the execution and delivery of a deed by grantor to grantee estops the grantor from afterwards setting up a conditional delivery or qualifying it in any way. This rule has its reason, which is that in so important a matter as the conveyance of title to real estate the door for the introduction of parol testimony to contradict the delivery of a deed, when once made, will not be opened. But this estoppel upon the grantor does not always conclude the grantee. The plaintiff here was the mortgagee. It did not agree to and did not in fact dismiss the foreclosure proceeding or satisfy the mortgage until after the loss occurred by fire. The rule is that a mortgagee taking a conveyance of the fee by a deed does not always and
In conformity to the views heretofore expressed, the judgment of the superior court is reversed and the cause remanded for a new trial.
Scott, C. J., and Dunbar, Gordon and Anders, JJ., concur.