Jeffreys v. Boston Insurance

CoNnoe, J. The only allegation of fact in the complaint in this action, which is denied in the answer of the defendant, Continental Gin Company, is that the premium for the policy sued on was paid by the plaintiffs, Jeffreys and Sons. This allegation is not essential to the cause of action alleged in the complaint. The right of the plaintiffs, Jeffreys and Sons, to recover on said cause of action is not dependent on this allegation; it is founded on the “loss-payable” clause in the *372 policy. The issue raised by the denial in the answer is immaterial, and for the purpose of determining the rights of the parties to this action on the facts admitted in the pleadings may be disregarded. Only issues of fact which arise on the pleadings, and are determinative of the rights of the parties to the action, must be submitted to the jury. C. S., 519. Miller v. Miller, 89 N. C., 209. It is well established as the law that a mortgagor and his mortgagee each has an insurable interest in the property conveyed by the mortgage. When a policy of insurance is procured by either a mortgagor or a mortgagee, insuring his own interest in the property, and in his own behalf alone, such insurance does not inure to the benefit of the other. When, however, the policy is procured by the mortgagor, for the benefit of the mortgagee, or the loss covered by the jxfiicy, if any, is expressly made payable to the mortgagee, as his interest may appear, the mortgagee is entitled to the proceeds of the policy to the extent of the amount of his debt secured by the mortgage. 26 C. J., 438. Thus in any event, on the admissions in the pleadings in the instant case, the plaintiffs, Jeffreys and Sons, are entitled to the sum of $2,750, now in the hands of the clerk of the Superior Court of Wayne County, as against the insured, Ransom Creech. It is also well established as the law that where a policy of insurance, procured by a mortgagor, provides on its face that the loss, if any, shall be payable to two or more mortgagees, as their respective interests may appear, the loss covered by the policy is payable to the mortgagees in proportion to their debts secured by their mortgages, unless one of the mortgagees has a priority over the others, by reason of the registration laws or otherwise, or unless it is expressly provided in the policy that the loss shall be payable only to one of the mortgagees named in the-policy. Where the policy provides that the loss shall be payable to one of several mortgagees, and there is no provision therein for the benefit of the other or others, the loss is payable only to the mortgagee provided for in the policy. 26 C. J., 442. In the absence of an express provision in the policy for the payment of the loss, or any part thereof, to a mortgagee, such mortgagee is not entitled to the loss or any part thereof, as against the mortgagor, or as against other mortgagees, unless there was an agreement on the part of the mortgagor to insure the mortgaged property for the benefit of the mortgagee who is not provided for in the policy. In the latter event, the loss is payable to the mortgagee, at least, as against the mortgagor. 26 C. J., 442. In Bank v. Bank, 197 N. C., 68, 147 S. E., 691, it is said: “We understand the principle to be that as a rule a mortgagee has no right to the benefit of a policy taken by the mortgagor in the absence of an agree *373 ment to that effect, unless the policy is assigned to him; but where the mortgagor is charged with the duty of taking out insurance for the benefit of the mortgagee, as between the parties to the contract, the mortgagee is entitled to an equitable lien on the proceeds of the policy obtained by the mortgagor.” See C. S., 6420. On the facts admitted in the pleadings in this action, the defendant, Continental Gin Company, has no right, title or interest in the sum of $2,750, now in the hands of the clerk of the Superior Court of Wayne County. There is no provision in the policy that the loss, if any, shall be payable to said defendant, nor is it alleged in the answer of said defendant, that the mortgagor, Ransom Creech, agreed to insure the gin machinery for the benefit of said defendant. The language contained in the notes cannot be construed as such an agreement. There is error in the judgment ordering and directing that the amount of its debt be paid to the defendant, Continental Gin Company, out of the sum of $2,750, prior to the payment of said sum to the plaintiffs, Jeffreys and Sons. For this reason the judgment is Modified and affirmed.