Obrázky stránek
PDF
ePub

Pac. 634; Phenix Ins. Co. v. Omaha Loan & T. Co. 41 Neb. 834, 25 L.R.A. 679, 60 N. W. 133; Hastings v. Westchester F. Ins. Co. 73 N. Y. 148; State Ins. Co. v. New Hampshire Trust Co. 47 Neb. 62, 66 N. W. 9, 1106; People's Sav. Bank v. Retail Merchants Mut. Fire Asso. 146 Iowa, 536, 31 L.R.A. (N.S.) 455, 123 N. W. 198.

Mr. E. Eugene Davis, for respondent:

Whatever view is taken of the violation of affirmative warranties or conditions prior to the execution of the insurance contract, there can be no question but that a violation of the direct terms of the policy subsequent to its issuance and delivery renders the policy void.

Gray v. Guardian Assur. Co. 82 Hun, 380, 31 N. Y. Supp. 237; Thorne v. Ætna Ins. Co. 102 Wis. 593, 78 N. W. 920; First Nat. Bank v. American Cent. Ins. Co. 58 Minn. 492, 60 N. W. 345; Crikelar v. Citizens' Ins. Co. 168 Ill. 309, 61 Am. St. Rep. 119, 48 N. E. 167; Brown v. Westchester F. Ins. Co. 9 Kan. App. 526, 58 Pac. 276; Home F. Ins. Co. v. Johansen, 59 Neb. 348, 80 N. W. 1047; Insurance Co. of N. A. v. Wicker, Tex. Civ. App. —, 54 S. W. 300, 93 Tex. 390, 55 S. W. 740; Baldwin v. German Ins. Co. 105 Iowa, 379, 75 N. W. 326; Fireman's Fund Ins. Co. v. Barker, 6 Colo. App. 535, 41 Pac. 513; Jump v. North British & M. Ins. Co. 44 Wash. 596, 87 Pac. 928, 12 Ann. Cas. 257; Moller v. Niagara F. Ins. Co. 54 Wash. 439, 24 L.R.A. (N.S.) 807, 132 Am. St. Rep. 1115, 103 Pac. 449; Woods v. Insurance Co. of Pa. 82 Wash. 563, 144 Pac. 650; Hill v. International Indemnity Co. 116 Kan. 109, 38 A.L.R. 362, 225 Pac. 1056.

Bridges, J., delivered the opinion of the court:

Suit on a fire insurance policy. A demurrer to the complaint was sustained. The plaintiff refused to plead further and a judgment was entered dismissing the action.

The complaint alleged that the Spokane Elgin Company sold an automobile to one Henry Walberg, who gave a mortgage back to the vendor on the machine to secure a part of the purchase price. This mortgage was duly filed, and within a few days after its execution was assigned by the Elgin Company to the appellant, Inland Finance Company.

The mortgage provided that the mortgagor should keep the property insured in favor of the mortgagee, collision, theft, etc. or its assigns, against loss by fire, Complying

with this provision of the mortgage, Walberg, the mortgagor, procured from the respondent a policy of insurance on the automobile in question for $1,100, protecting the property against loss by fire, theft, etc. The complaint further alleged that, during the term of the insurance, the mortgage mentioned was satisfied and Walberg gave to the appellant another mortgage covering the same property, but securing a less amount of the same debt. This mortgage contained the same provisions as those found in the first. After the giving of this mortgage, and also during the term of the insurance, Walberg gave a second mortgage on the automobile to a man by the name of Stone. The policy runs to Walberg, the mortgagor. It recognizes that the appellant holds a mortgage on the insured property, for it has the following clause: "The automobile described is fully paid for by the assured, and is not mortgaged or otherwise incumbered, except as follows: Inland Finance Co."

Another provision of the policy provides that it shall be void if the insured property be "incumbered by any lien or mortgage." During the term of the insurance, the automobile was totally destroyed by fire.

We will not discuss the first question raised, which is the fact that the insurance policy does not contain any clause providing that the loss, if any, shall be payable to the mortgagee as his interest may appear, nor any reference to the mortgagee other than merely reciting that it holds a mortgage on the property, nor will we decide how such facts might affect the appellant. Neither will we discuss the second question raised, which is the effect on the insurance policy because of the satisfaction of the mortgage that existed when the insurance was written and the giving

(134 Wash. 485, 236 Pac. 73.)

of another mortgage on the same property to appellant to secure a part of the same indebtedness.

We will assume for the purpose of this case that there is in the policy a provision to the effect that the loss, if any, shall be paid to the mortgagee as its interest may appear and that the appellant still holds the mortgage which was executed prior to the issuance of the insurance. Certainly, appellant's assumed position is fully as strong as that actually occupied by it.

Where a fire insurance policy runs to a mortgagor and provides that the loss, if any, shall be payable to the mortgagee as his interest may appear, the almost universal rule of the authorities is that the mortgagee is merely an appointee to receive the money in the event of loss, and that his rights are no greater than those of the assured,

Insurance-
loss payable to
mortgagee-

breach by mort

gagor-effect.

The

and that a breach by the latter of the terms of the policy will void it as to the mortgagee. In other words, the "pay to the mortgagee" clause is but little, if anything, more than an order by the mortgagor on the insurance company to pay the loss, if any, to the mortgagee as its interest may appear, which order has been accepted by the insurance company. rule is thus stated in 14 R. C. L. 1084: "A clause in a policy merely making the loss payable to the mortgagee as his interest may appear makes the mortgagee the simple appointee of the mortgagor to receive the proceeds of the amount of his interest, and to place his indemnity at the risk of every act and omission of the mortgagor that would avoid, terminate, or affect the insurance of the latter's interest under the terms of the policy. But, as has heretofore been stated in considering affirmative warranties, policies issued at the present time, protecting the interest of a mortgagee, usually contain what is known as the union or standard mortgage clause, by which it is stip

ulated that, in case the loss is directed to be payable to a mortgagee, the interest of the mortgagee in the proceeds of the policy shall not be invalidated by the act or neglect of the mortgagor or owner of the insured property, or, less frequently, that no act or default of any person other than the mortgagee or those claiming under him shall affect his right to recover in case of loss."

In 26 C. J. 273, the rule is stated thus: "Under a policy making the loss payable to a third person as his interest may appear, the payee is not a party to the contract, but only an appointee whose rights are dependent upon the rights of the insured, and a violation by the latter of the conditions of the policy will forfeit the rights of such appointee.”

Again, at page 84 of the same volume, speaking of the same question, it is said: "Since there is no contract between the mortgagee and insurer under such a policy, the mortgagee can recover only when the mortgagor could have done so had the money been payable to himself instead of being payable for his benefit to the mortgagee, and any breach of the mortgagor of conditions precedent subsequent

which would avoid or forfeit the

policy as to him will also invalidate it as to the mortgagee."

Each of the texts which we have

quoted cites many cases in support

of the rule.

In Hill v. International Indemnity Co. 116 Kan. 109, 38 A.L.R. 362, 225 Pac. 1056, it is said: "It is a well-settled principle of insurance law which has been long established and apparently universally followed that, where the policy simply designates the mortgagee as the person to whom the loss, if any, is payable to the extent of his interest, the balance, if any, to be payable to the assured, that the mortgagee is bound by the conditions of the policy to the same extent the assured is bound, and, if the conditions be broken in such a way that the as

[ocr errors]
[merged small][ocr errors][merged small]

This

It will be remembered that there was a clause in the insurance policy which annulled it in the event the property insured was "incumbered by any lien or mortgage." clause, of course, is very broad and, read alone, would include the mortgage held by the appellant, but, in the light of a previous clause in the policy which recognizes that the appellant holds a mortgage the clause just quoted could, of course, have reference only to mortgages other than that held by the appellant. The complainant, it will be remembered, recites that the mortgagor violated this provision of the policy

by giving a second mortgage to Mr. Stone. It would therefore clearly appear that the assured (Walberg) had violated the terms of the insurance policy and that because thereof he could not collect any insurance, and, under the authorities we have quoted, if he -execution of cannot enforce the second mortgage-effect. policy, neither can

No

his mortgagee, the appellant. "union or standard" clause, as mentioned by one of the quotations we have made, providing that the mortgagee shall not be responsible for any acts of the mortgagor which might avoid the policy, has been called to our attention, nor have we been able to find any such provision in the policy in suit.

For the reasons given, it would appear that the complaint failed to state a cause of action.

The judgment is affirmed.

Tolman, Ch. J., and Main, Askren, Parker, JJ., concur.

ANNOTATION.

Breach of policy by mortgagor as affecting mortgagee under a loss payable clause which does not provide for that event. [Insurance, §§ 1861-189.]

This annotation supplements the annotation in 38 A.L.R. 367.

The rule laid down in 38 A.L.R. 368, that, under a simple loss-payable or open-mortgage clause in an insurance policy issued to a mortgagor, payable to the mortgagee as interest may appear, the mortgagee is simply an appointee of the insurance fund, whose right of recovery is no greater than the right of the mortgagor, so that a breach of the conditions of the policy by the mortgagor, which would prevent a recovery by him, precludes recovery from the insurer by the mortgagee, is supported by the later decisions. Orenstein v. Star Ins. Co. (1926; C. C. A. 4th) 10 F. (2d) 754; INLAND FINANCE Co. v.

[blocks in formation]

In the INLAND FINANCE CO. CASE, the court says that such a clause is "but little, if anything, more than an order by the mortgagor on the insurance company to pay the loss, if any, to the mortgagee as its interest may appear, which order has been accepted by the insurance company."

In the Wyley Case (Wash.) supra, it was held that the fact that the indorsement clause referred to the mortgagee as "payee" did not take the case out of the general rule.

G. S. G.

(139 Wash. 559, 247 Pac. 925.)

F. A. SMALL, Respt.,

V.

CITY OF SEATTLE et al., Appts.

Washington Supreme Court (Dept. No. 2) - July 15, 1926.

(139 Wash. 559, 247 Pac. 925.)

Negligence, § 23-injury by sluicing effect of other operations.

-

1. A contractor engaged in making a fill by sluicing operations is not relieved from liability for injury done by water finding its way into the basement of a building, by the fact that other similar operations were in progress in the neighborhood, where no injury was done until his operations were begun.

[See annotation on this question beginning on page 129.]

[merged small][merged small][merged small][merged small][merged small][ocr errors][merged small][merged small][merged small][merged small]

fications, if he had an option to do the work by sluicing or delivering the required earth dry, and chose the sluicing method, which caused the injury.

[See 14 R. C. L. 106; 6 R. C. L. Supp. 795. See also annotation in 38 A.L.R. 441.]

Municipal corporations, § 262 - lia

bility for injury done by contractor. 5. A municipal corporation which sanctions a sluicing operation by a contractor to convey earth to a fill cannot avoid liability for injury to neighboring property, on the theory that the work was under the control of an independent contractor.

[See 19 R. C. L. 1140; 4 R. C. L. Supp. 1311.]

Municipal corporations, § 316 injury by sluicing sufficiency of claim.

6. A municipal corporation cannot avoid liability for injury to the basement of a dwelling by water seeping through the ground from a sluicing operation, because the claim filed with it stated that the water overflowed claimant's property, filling the basement.

APPEAL by defendants from a judgment of the Superior Court for King County (Griffiths, J.) in favor of plaintiff in an action brought to recover damages for injuries to his dwelling house alleged to have been caused by negligent sluicing operations carried on by defendants. Affirmed. The facts are stated in the opinion of the court. Messrs. Thomas J. L. Kennedy and Arthur Schramm, for appellant city:

Respondent is not entitled to a recovery against the defendant city for the reason that the claim filed with the city was fatally defective.

Willett v. Seattle, 96 Wash. 632, 165 Pac. 876.

The contractor having chosen the

hydraulic method, it was his duty, and not that of the city, to make adequate provision for the disposal of the surplus waters, and if he failed to do so, or if he was otherwise negligent in the performance of the work, he, and not the city, is liable.

39 C. J. 1315, 1317 et seq.; 28 Cyc. 1280; Engler v. Seattle, 40 Wash. 72,

82 Pac. 136, 19 Am. Neg. Rep. 49; Seattle Lighting Co. v. Hawley, 54 Wash. 137, 103 Pac. 6.

Messrs. Robert & Skeel, Shorett, McLaren, & Shorett, and Edward R. Taylor for respondent.

Parker, J., delivered the opinion of the court:

The

The plaintiff, Small, seeks recovery for damages to his dwelling house, which he claims resulted from negligent sluicing operations carried on by the defendant dredging company, and sanctioned by the defendant city in the construction of city local improvements. case proceeded to trial upon the merits in the superior court for King county sitting without a jury, resulting in findings and judgment awarding recovery to Small as against both the city and the dredging company, from which they have both separately appealed to this court.

On March 30, 1923, the dredging company contracted with the city to improve approximately a mile of Ninth Avenue South and small portions of other adjacent streets, by grading and paving. This portion of the avenue lies along the easterly edge of the tide flats to the south of the city. The natural surface of the avenue being below the grade of that which the city established for its improvement, its grading under the contract was filling up to the city's established grade. On the same day the dredging company contracted with the city to improve certain city property lying upon the hill above the portion of Ninth avenue to be so improved. This hill improvement called for the removal and wasting of a large quantity of earth. While these two contracts were entirely separate as to the rights and obligations of the contracting parties, it is plain that they were awarded by the city to one concern, the dredging company, with a view of the efficient and economical carrying on of the work of both at the same time, in that the wasted earth from the hill improvement could be used in the filling of

the Ninth avenue avenue improvement. The specifications for the Ninth avenue improvement provided, among other things, that "the fill shall be made by hydraulic methods or by sluicing into place if delivered as dry earth," thus giving to the dredging company the choice of methods of bringing the earth to the Ninth avenue fill, the city sanctioning either method. The extreme southern end of the Ninth avenue improvement is at Spokane avenue, which runs east and west. Small's house is situated near Seventh avenue, four blocks farther south. It has a basement with concrete walls which has always been dry and free from water, though the floor of the basement is about on a level with high tide. The ground on which the dwelling sets appears to be filled-in ground of a sandy porous nature in which water readily maintains a common level.

The Oregon & Washington Railway tracks, entering the city from the south, run along Fifth avenue; that is, four blocks west of and parallel with Ninth avenue. These tracks are on a grade which prevents the free flow of water from east to the west out to the bay, other than through an opening in the railway grade nearly directly west of Small's house in the course of what is apparently a natural slough which carries the water flowing from east to west across the railway, and has apparently always been sufficient to take care of all the waters accumulating on the east side of the railway up until about April 24, 1923. In addition to the natural accumulation of water on the east side of the railway, there was a period of some three months' extra sluicing water used in the improvement of Sixth avenue and also certain waste water from a city reservoir upon the hill, all of which was able to escape through the opening in the railway grade without damage to Small's house.

Such were the conditions in the neighborhood on about April 24, 1923, up to which time Small's base

« PředchozíPokračovat »