184 Iowa 290 | Iowa | 1918
It is conceded that these mortgages were on the land at the time the policy was issued, and were held by the plaintiff bank at that time, and at the time the fire occurred, and were unsatisfied. We think the record shows a right in the plaintiff to recover, unless defeated by the matters urged by the defendant to which we call attention.
It is provided in the policy that, unless otherwise provided by agreement, this policy shall be void:
“If any change other than by -death of the insured, whether by legal proceedings, judgment, voluntary act of the insured or otherwise, takes place in the interest, title, possession or use of the subject of insurance, if such change in possession or use makes the risk more hazardous; or
“If the subject of insurance or a part thereof (as to the part so encumbered) be or become encumbered by lien, mortgage or otherwise created by voluntary act of the insured, or within Ms control.-”
The contention of the defendant is that these conditions of the policy were violated, and by such violation all rights under the policy became forfeited. The violation charged is this: That, on the 30th day of December, 1913, without the knowledge or consent of the company, the insured, A. S. Strickler, conveyed the insured property, by warranty deed, to one D. H. Sage; that said sale and transfer were Without the knowledge or consent of this defendant; further, that, on
Defendant further says that, when the mortgage clause under which plaintiff claims was attached to the policy, and the plaintiff accepted the same, the plaintiff became bound by all the terms, conditions, and provisions of the policy, the same as if the said policy had been issued to the plaintiff as the original insured; that it was provided in said policy as follows:
“If, with the consent of this company, an interest under this policy shall exist in favor of a miortgagee or of any person or corporation having an interest in the subject of insurance, other than the interest of the assured as described herein, the provisions and conditions herein contained shall apply in the manner expressed in such provisions and conditions of insurance relating to such interest as shall be agreed upon by the company.”
It is further provided in the policy that, unless otherwise provided by agreement of this company, this policy shall be void if the policy be assigned before loss.
The defendant states the fact to be that D. Hi. Sage, who pretended to have an interest in saidi policy, made a pretended assignment of the policy to W. D. Henkle on the 18th day of September, 1914. The defendant denies that
The plaintiff, replying to these matters alleged by the defendant, says: That the mortgage from Henkle to Sage, the $6,000 mortgage referred to by the defendant in its answer, dated September 18, 1914, did not constitute a mortgage or incumbrance upon the property until it passed into the hands of the plaintiff; that the mortgage was executed by Henkle to Sage, and placed in the hands of Sage, as agent, to negotiate, and for the sole purpose of carrying out an agreement and understanding between Henkle and Sage that Sage would procure a loan for $6,000 on the property, which loan, when obtained, should be applied in the discharge of the incumbrance already on the property then held by the plaintiff; that Sage took the mortgage as a nominal mortgagee, and as agent and trustee for Henkle, for the purpose of negotiating the loan and taking up the then existing incumbrance upon the land held by the plaintiff; that, in pursuance of said agreement and understanding, Sage did negotiate said mortgage to the plaintiff; that, prior to the negotiation to the plaintiff, it did not constitute a lien upon the land, nor was it an incumbrance, nor a valid and subsisting mortgage upon the premises, and was not such until received by the plaintiff; and that the delivery to Sage was in pursuance of the understanding and an intention on the part of Henkle and Sage that it should not constitute a mortgage until negotiated; and that, pursuant to said intention, Sage transferred it to the plaintiff; and that the same was received by the plaintiff only conditionally; that the condition upon which said mortgage was received by the plaintiff was that it should be taken in lieu of and as a substitute for the mortgages already existing upon said land,
Upon the issues thus presented, the cause was tried to a jury, and a verdict returned for the plaintiff. Judgment being entered upon the verdict, defendant appeals.
It appears that A. S. Strickler was the owner of this property at the time the policy was issued; that the property was incumbered by the two mortgages hereinbefore referred to; that subsequently, Strickler conveyed the property to one Augustine; that Augustine conveyed to one Henderson, and Henderson conveyed' to Sage, and Sage to Henkle.
The complaint of the defendant is that Strickler conveyed this property to Sage and transferred the title without the knowledge and consent of the defendant, and that Sage conveyed the property to one Henkle, and that both conveyances were without the knowledge and consent of the defendant; that this constituted such a change in the interest and title of the property as voided the policy, under the provision of the policy hereinbefore set out.
We may concede this, and that the effect of these conveyances would be to defeat recovery on the policy, if it were not for the facts pleaded by the plaintiff in its reply, to wit: that, after Henkle had obtained the property by
The evidence here is not strong, but is sufficient to justify the jury in saying that the defendant, when it received the payment, had full knowledge of the fact that the title had passed from Strickler, through Sage, to Henkle. The legal effect of receiving this payment, with knowledge of the change of ownership, was to waive its claim of added moral hazard, and was, in legal effect, an agreement to continue the policy in force under the changed conditions. It would be profitless for us to set out the evidence that was offered on this point. It is sufficient to say that it made a jury question, and the jury found for the plaintiff upon the issues.
Some question is made that the court, in its instructions to the jury, did not touch upon the fact of the conveyance from Strickler to Sage as invalidating the policy. In our view of the case, this was not necessary. There was a change in ownership, a change to which the defendant had a right to object, under the terms of its policy; and it had a right to withdraw from any further obligation to maintain the insurance on the property, upon knowledge of that fact. But, with knowledge of the fact that title had changed, and passed out to Strickler, the original owner, they elected to take the premium, and have ever since retained it; and, by so taking the premium, they must be held to have elected to continue the insurance as originally written. See, upon this point, Padrnos v. Century Fire Ins. Co., 142 Iowa 199.
In Cone v. Century Fire Ins. Co., 139 Iowa 205, it was held that, if the mortgage did not affect any interest, in the property, and could not have been enforced, the mioral hazard was not increased.
“The incumbrance to avoid a policy must be valid, not merely nominal, and such as would have a tendency to create or increase temptation or motive for the destruction of the property, or decrease the owner’s interest in guarding and preserving it.”
See, also, Russell v. Cedar Rapids Ins. Co., 71 Iowa 69; Weigen v. Council Bluffs Ins. Co., 104 Iowa 410.
“The object of the insurance company, by this clause, is that the interest shall not change so that the assured shall have a greater temptation or motive to burn the property,*300 or less interest and watchfulness in guarding and preserving it from destruction by fire. Any change in or transfer of the interest of the assured in the property of a nature calculated to have this effect, is in violation of the policy. But if the real ownership remains the same, if there is no change in the fact of ■ title, but only in the evidence of it, and if this latter change is merely nominal, and not of a nature calculated to increase the motive to burn, or diminish the motive to guard the property from loss by fire, the policy is not violated.”
We think that, under the record made here, there was no such incumbrance of the property as violated the spirit and purpose against which the forfeiture clause was intended to operate.
Upon the whole record, we think the verdict of the jury does substantial justice between the parties; and, upon the whole record, the defendant has had a fair and impartial trial.
The defendant assigned twenty-five errors alleged to have been committed by the trial court during the progress of the trial. We have examined these with care; and, without entering upon a detailed discussion of them, we have to say that we find no error prejudicial to the rights of the defendant upon the issues tendered, under the record made.
Since we find no ground for interfering with the action of the district court, the cause is — Affirmed.