Kentucky Cash Credit Corp. v. Quisenberry

Opinion of the Court by Judge Dietzman Affirming. Tke appellant is a corporation engaged in tke business of loaning money on real estate. On tke 16th of May, 1927, it loaned to tke appellee Mary M. Gr. Quisenberry tke sum of $1,200, for wkick ske executed ker note secured by a second mortgage on a residence ske owned in Shelby county. At tkat time tke Louisville Title Company held a first mortgage on tkis property. Tke mortgage as executed contained the customary clause tkat tke mortgagor should keep tke property insured for tke benefit of tke mortgagee, and that, if she failed to do so, tke mortgagee had tke privilege of procuring suck insurance at tke expense of tke mortgagor. At tke time tkis loan and mortgage were made, tke appellee had a policy on ker property in tke amount of $2,000 wkick had a period yet to run. It stands admitted tkat the property mortgaged was worth far in excess of tke amount of tkis policy and suck other insurance as was then on tke property or was upon tke property at tke time of its destruction. On tke 19th day of March, 1928, tke appellee’s residence was destroyed by fire. Mrs. Quisenberry having defaulted in tke payments on ker mortgage in favor of tke appellant, tkis suit was brought to foreclose tkat mortgage. By ker answer and counterclaim, Mrs. Quisenberry alleged tkat, at tke time the loan was made ker and tkis mortgage executed, it was agreed by and between ker and Mr. Walker, who was then tke president and general manager of the appellant, and who was conducting tke transactions on behalf of the appellant, tkat at tke expiration of tke policy of insurance then on tke property, to wkick we have referred, tke appellant would have it renewed at tke appellee’s cost, but tkat, through mutual mistake and oversight, tkis agreement, wkick was a part of tke contract covering tke loan and mortgage, was omitted from tke mortgage as executed, and tke provision about insurance to wkick we have referred was inserted *512 therein. Appellee further alleged that the appellant had failed to renew this insurance on its expiration, a fact of which she was ignorant until after her property had been destroyed by fire, and that, by reason of this failure on the part of the appellant to renew that insurance, she had lost the amount of the same. She prayed that the mortgage be reformed to express the true contract and agreement, that, when so reformed, it be enforced and she be given judgment against the appellant in the sum of $2,000, the amount of the insurance lost. A traverse of the appellant made up the issues. The court submitted the question to a jury whether or not the actual contract between the parties was as asserted by the appellee. The only proof introduced by either side was that produced by the appellee, and at its close both parties made a motion for a peremptory instruction. The court sustained that asked for by the appellee, so that, in effect, the case was really tried by the court as any other equitable action. The proof produced by the appellee consisted of the evidence of herself and that of Mr. Walker. They both unequivocally testify that the true contract was as claimed by Mrs. Quisenberry in her answer, and that the terms in the mortgage as executed did not truly express the true real agreement so far as this insurance matter is concerned. The court entered judgment in favor of Mrs. Quisenberry for the sum of $2,000 credited by the amount it is admitted she owed the appellant on its mortgage, and from that judgment this appeal is prosecuted. The main and indeed only ground urged for reversal is that it is not shown that Mr. Walker had any authority to make the agreement as claimed by Mrs. Quisenberry. There is no merit in this contention. The record without dispute shows that Mr. Walker was the president and general manager of the appellant in charge of these negotiations. There is no contention that he did not have the authority to lend this money and take the mortgage. The mortgage itself as written contained a provision about how the insurance on this property was to be maintained. The appellant does not argue that its then president had no authority to make such a provision about the insurance. Indeed, it is well known that in all mortgages on improved property, some arrangement about insurance is inserted, and, as Walker was intrusted by the appellant with the closing of this loan and the taking of the mortgage, it was at least within the apparent scope of *513 Ms authority to arrange about the insurance. Whether the mortgagor or the mortgagee should be the one to attend to the renewal of the insurance was simply a matter of detail, and plainly it was at least within the apparent scope of the authority of Mr. Walker, the president, to assume this duty for the mortgagee instead of placing it upon the mortgagor. Cf. Seat v. Louisville & Jefferson County Land Co., 219 Ky. 418, 293 S. W. 986. The judgment of the lower court is affirmed.