Girard Fire & Marine Ins. Co. v. Farmer

WILLSON, O. J. (after stating the case as above). The policies issued to Collins became void as to him when he conveyed the property they covered to Mrs. Farmer; but each of them contained a stipulation (in harmony with article 4931, R. S. 1925) that as to the mortgage it should not “be invalidated (quoting) by any act or neglect of the mortgagor or owner of the within described property * * * nor by any change in the interest, title or possession of the property,” and therefore remained valid and effective in favor of the Gaulding Mortgage Company. At the trial the Girard Fire & Marine Insurance Company, while denying that the policy it issued became effective as to the mortgage company, m open court admitted same was effective as to Mrs. Farmer, and that it was liable to her for the difference between the mortgage debt and the amount of the loss to her by the fire. There is no doubt, we think, if that policy never became effective in favor of the mortgage company, when the fire occurred the Girard Company became bound to pay the full amount of the policy to Mrs. Farmer, and the companies issuing the policies to Collins became bound to pay the full amount of the mortgage indebtedness to the mortgage company. It. would follow, in that event, that Mrs. Farmer alone would be entitled, on the showing in the record, to complain because part of the sum which should have t>een adjudged to her was, instead, adjudged to the trustee; What recourse, if any, the trustee of the companies issuing the policies to Collins, having paid the mortgage debt and taken a transfer thereof to himself, would have as against Mrs. Farmer, need not be determined, as it is not a matter that concerns the Girard Company. As we view the record, there is only one theory upon which it could be held that the Girard Fire & Marine Insurance Company has a right to complain of the judgment, and that one is that the policy it issued to Mrs.' Farmer was effective in favor of said mortgage company at the time the fire occurred. In that event, the Girard policy and 'the policies issued to Collins made the case one of double insurance so far as the mortgagee was concerned, and the doctrine of contribution applied as between the insurance companies, according to which the companies issuing the policies to Collins, and their trustee, would be entitled to recover of the Girard Company only a proportional part, to wit, $1,-635.46, of the mortgage debt. We do not think this view of the matter is affected by the fact that the trustee of the companies issuing the policies to Collins paid the mortgage debt and took a transfer thereof to himself. The only effect of such transfer, we think, was to confer upon' the trustee the right the mortgage company had to look to the Girard Company for a pro rata part of the mortgage debt. Each of the policies issued to Collins and the policy issued to Mrs. Farmer as well contained a stipulation that, if there was other insurance on the property, it should not be liable for a greater proportion of any loss “than' the sum (quoting) hereby insured bears to the whole amount of insurance on said property, payable to, held by or consented to by said mortgagee (trustee).” Contrary to the view which the Girard Company seems to entertain, we think the policy it issued did take effect in favor of the mortgage company, and therefore that the judgment as to it is erroneous, in that it [284] should have been in the trustee’s favor against it for a pro rata part of the mortgage debt, to wit, said sum of $1,635.46, instead of for the full amount of said debt, to wit, the sum of $.3,048.84. The judgment will be reformed accordingly in that respect, and, as reformed, will be affirmed.