Bryan v. Old Colony Insurance

Devin, J. Tbe record before us is voluminous, consisting of 394 pages, and there are four appeals and eight briefs. However, tbe determinative questions presented by tbe appeals are not many, and their consideration may be confined within comparatively narrow limits. The cases, three in number, all concern policies of fire insurance issued by three different insurance companies on the same building, loss in each instance payable to persons who claim separate interests therein. The insured named in the policies, or those claiming under them, constitute the plaintiffs in the three suits. The three actions were properly consolidated and tried by a referee. Upon exceptions to the referee’s report the cases were heard in the Superior Court, separate judgments entered, and, by appeals duly entered, the cases were brought to this Court. They will be considered in order. 1. In the case of “J. E. A. Bryan v. Old Colony Insurance Company” the only question raised by the appeal is the validity of the judgment decreeing recovery for the plaintiff in an agreed amount unaffected by lien thereon claimed by the intervening children of Hettie Whitehurst on account of a charge imposed in the devise of the property under the will of Harriett L. Bryan to J. E. A. Bryan. It appears, however, that J. E. A. Bryan was the owner of the property, subject to a charge thereon in favor of the interveners; that he had an insurable interest therein, and that he procured and paid for insurance for his own protection alone. It is a well recognized principle of law that a mortgagor or owner of property subject to a lien has an interest separately insurable, and that when insurance is effected at his own request and cost and for his own benefit, he is not accountable to the lien-holder for the amount collected from the insurance company in case of loss. Ins. Co. v. Reid, 171 N. C., 513, 88 S. E., 779; Batts v. Sullivan, 182 N. C., 129, 108 S. E., 511; Stockton v. Maney, 212 N. C., 231. The judgment of the court below in this case was in accord with the decisions of this Court and must be affirmed. *397 2. In the case of “W. C. Whitehurst, Executor of the Estate of Harriett L. Bryan, and others v. American Eagle Insurance Company” the referee concluded, upon the facts found by him, that the insurance policy issued by this defendant to the estate of Harriett L. Bryan was not an enforceable contract, and was invalid for the reason that the estate was solvent, there were no creditors, that the executor representing the estate had no interest in the real property devised to J. E. A. Bryan, had no duty to perform nor risk to protect with respect to it, and suffered no loss when it burned. The return of the premium was tendered. The ruling of the referee was approved and concurred in by the judge, and judgment of nonsuit was entered dismissing the action as to the American Eagle Insurance Company. In this we find no error. Batts v. Sullivan, supra; Bank v. Assurance Co., 188 N. C., 747, 125 S. E., 631. 3. In the case of “G. R. Whitehurst, Guardian of the Whitehurst Children, v. United States Eire Ins. Company,” where a jury trial was had, the appeal of the defendant insurance company presents two questions for decision: (1) Did the verdict of the jury on the third and fourth issues entitle the defendant insurance company to judgment in its favor, and (2) did the judgment signed correctly apportion this defendant’s share of the loss? While the third issue in form appears to determine that, after the delivery of the policy of the United States Eire Insurance Company sued on, the plaintiff G. R. Whitehurst entered into an agreement with W. 0. Whitehurst, executor of estate of Harriett L. Bryan, to secure another policy of insurance on the same building for the protection of the Whitehurst children, and that as a result of such agreement the policy of the American Eagle Insurance Company was issued, and that this was without notice to the agent of the United States Eire Insurance Company, an examination of the evidence and findings of fact reported by the referee, to which no exceptions were filed, and which were approved by the judge and incorporated in his judgment, shows that there was no evidence to support this issue nor any finding of fact upon which judgment for the defendant could properly be based. The facts were to the contrary. The uncontroverted evidence and the approved findings of the referee were to the effect that W. 0. Whitehurst, as executor of Harriett L. Bryan, had insured the property in the American Eagle Insurance Company by policy payable to the estate of Harriett L. Bryan in Eebruary, 1934, some time before this defendant’s policy was issued. It was further found by the referee that when G. R. White-hurst, guardian, had the policy in the United States Eire Insurance Company issued for the benefit of the Whitehurst children in October, 1934, he did not know the insurance in the American Eagle Insurance *398 Company was in force. Hence tbe findings of fact by tbe referee upon competent evidence, approved and concurred in by tbe judge, must be regarded as conclusive, and tbe finding by tbe jury, upon an issue improperly and inadvertently submitted, disregarded. Tbe motion of defendant United States Eire Insurance Company for judgment on tbe verdict was properly denied. Tbe further contention of defendant United States Eire Insurance Company that tbe insurance was void for breach of tbe conditions contained in tbe policy as to other insurance cannot be sustained. The North Carolina statute (C. S., 6437), declaring a standard form of fire insurance policy, names as one of tbe conditions upon which liability may be avoided tbe issuance of a policy, “(a) While tbe insured has any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy.” This provision is also contained in defendant’s policy. But there is no evidence here that the Whitehurst children, who had an insurable interest in the property and who were the insured for whose protection this defendant issued its policy, had any other contract of insurance on this property. Neither by the language of the policy issued by the American Eagle Insurance Company to the estate of Harriett L. Bryan, nor by competent evidence, was it made to appear that any other contract of insurance was at any time issued to or for those insured under the policy of the United States Fire Insurance Company. The referee found that the policy of the American Eagle Insurance Comj)any was issued for the benefit of the estate of Harriett L. Bryan alone. (2) Was this defendant’s proportion of the loss proj)erly determined? The policy of the United States Eire Insurance Company contained this provision: “In ease of any other insurance upon the within described property this company shall not be liable, under this policy, for a greater proportion of any loss or damage sustained than the sum hereby insured bears to the whole amount of insurance on said property issued to or held by any party or parties having an insurable interest therein, whether as owner, mortgagee, or otherwise.” It follows, therefore, that the insurance policy issued by the American Eagle Insurance Company to the estate of Harriett L. Bryan, having been held invalid and unenforceable for the reason that the executor of said estate, under the facts found in this case, had no insurable interest in the property, the amount of this policy may be disregarded in determining “the whole amount of insurance on said property issued to or held by any other party or parties having an insurable interest therein,” and that the court below correctly held as found by the referee that the total amount of valid insurance on the property was $2,800, and that this defendant’s proportion thereof was 10/28ths of the loss fixed at $2,000, or $714.29. 14 R. C. L., 1310. *399 We have examined tbe other exceptions noted by this defendant at the trial and assigned as error upon appeal and find them without substantial merit. Upon the appeal of the United States Eire Insurance Company we find no error. In the plaintiffs’ appeal in “Whitehurst, Guardian, v. United States Eire Insurance Company” the exception to the judgment is based upon the ground that the plaintiffs were entitled to the full amount of the insurance stated in the policy, to wit, $1,000, without reduction on account of the other insurance on the property taken out by J. E. A. Bryan. Eor the reasons hereinbefore set out this exception cannot be sustained. The terms of the contract of insurance as well as the statute entitle the defendant to thus prorate its liability in proportion to the whole insurance covering the property. And this is determined by the total amount of insurance covering the property rather than by the amount subsequently agreed to be paid in settlement of the other insurance. The facts here were not such as to invoke the application of the principle stated in Bennett v. Ins. Co., 198 N. C., 114, 151 S. E., 98, and Taylor v. Ins. Co., 202 N. C., 659, 163 S. E., 749. Even if the relationship of J. E. A. Bryan, the owner of the property, to the children of Hettie Whitehurst, entitled to a charge thereon, be held to be similar to that of mortgagor and mortgagee, it appears that the plaintiffs accepted the policy of the defendant United States Eire Insurance Company containing the quoted stipulation limiting liability for loss proportionately to the whole amount of insurance covering the property, and there is no evidence that the owner subsequently effected additional insurance thereon without the knowledge and consent of the plaintiffs, or that he thereafter did any act to impair or affect plaintiffs’ rights under the policy accepted by them. Bank v. Ins. Co., 187 N. C., 97, 121 S. E., 37; Ins. Co. v. Varble, 103 Ky., 758. In conclusion it may not be improper to say that these cases, complicated by conflicting interests and contentions, seem to have been fairly tried by a careful referee and an able judge, and we find no sufficient reason to disturb the results which have been reached. In Bryan v. Old Colony Ins. Co. and others, judgment affirmed. In W. C. Whitehurst, Executor, and others v. American Eagle Insurance Co., judgment affirmed. In G. B. Whitehurst, Guardian, and others v. United States Fire Insurance Company and another — on plaintiffs’ appeal, no error; on defendant insurance company’s appeal, no error. BaeNHIll, J., took no part in the consideration or decision of this case.