Amory v. Reliance Insurance

Knowlton, C. J. Each of the two plaintiffs is a mortgagee, who claims under a policy of insurance for a loss payable to him, which resulted from the burning of a building on the mortgaged property. There were two separate estates, and each plaintiff has brought an action against four different insurance companies, each of three of which issued a policy upon the building on the first of these estates. One of these three issued another policy on the building on the second estate, and the fourth also issued a policy on this building. Because of the foreclosure of a later mortgage covering both estates, which worked a change in the title, all the policies became void in the hands of the original insurer, and the claim of the plaintiffs, as mortgagees under their earlier mortgages, rests upon the clause in each policy, under our — 382 — Massachusetts standard form, which protects the rights of the mortgagee in such cases. We have before us four classes of questions: first, whether the respective plaintiffs had the rights of a mortgagee in their several policies at the time of the fire; secondly, whether they severally rendered a sworn statement of the facts concerning their claim seasonably after the fire ; thirdly, if they are entitled to recover, in what proportions should claims be charged upon the different defendants; fourth, from what time shall interest be computed. The plaintiff Amory holds a first mortgage upon each of the two estates, and the plaintiff Watchmaker holds a second mortgage covering both of them. Upon the building on the first estate — that upon Arlington Street — there were three policies of insurance, one for $3,000 in the Aachen and Munich Company, one for $1,000 in the German Company and one for $1,000 in the Farmers’ Company. These policies were all taken out by Gotlieb Ancelovitz, the owner of the property, and the first two were made payable in case of loss to M. Dana and L. Levin, mortgagees. On September 25, 1905, these mortgagees indorsed upon each policy a release of all their interest as mortgages, and on the same day Ancelovitz, the insured, signed this indorsement upon each policy: “ In case of loss pay this policy to Francis I. Amory, first mortgagee, as his interest may appear, under present or any future mortgages on the insured property. Balance, if any, to Isaac Watchmaker, second mortgagee, as his interest may appear.” This was assented to by an authorized agent of each of these two defendants. On the same day the two mortgages upon this property under which the plaintiffs claim to recover insurance were made, one to each of the plaintiffs, although that to Watchmaker was not delivered and recorded until October 6, 1905. We see no ground for questioning the right of Amory as a mortgagee under these two policies of insurance. . The right of Watchmaker is questioned on the ground that his mortgage was not delivered until eleven days afterwards. It does not appear that the insurance companies had any knowledge of the facts, except that which may be inferred from the papers. There was no fraud nor concealment, and the writings must therefore be construed in connection with the facts as they exist, in reference — 383 — to which the parties must be presumed to have contracted. It is agreed that, on September 25, Watchmaker paid the sum of $10,300, which represented this second mortgage of the same date, as well as the principal of Amory’s two first mortgages, which were used to pay up prior mortgages upon the property. It is plain, under the indorsement, that the payment to Amory was to be made according to his interest under any future mortgage, as well as under a present one. It appearing that the first mortgage to Amory and the second mortgage to Watchmaker both bore the same date, and that this indorsement on the policy was also on that date, and that Watchmaker is referred to as the second mortgagee in the indorsement, and that he paid the consideration for the mortgage on that day, we are of opinion that the direction to pay and the assent of the company should be construed as having reference to his holding under a mortgage already arranged for, and made that day, although it did not take effect by delivery until a few days later. The case of Attleborough Savings Bank v. Security Ins. Co. 168 Mass. 147, relied upon by the defendants, was decided upon very different facts. The release of all interest of Dana and Levin under the policies previously held as security for their mortgage, and the direction by the insured, in the nature of an assignment, assented to by the companies, furnished a good consideration, and the policies were as effectual for the protection of the plaintiffs as if they had then been first issued, payable in this form. Bor is there any valid defense on the ground of a failure to assign the notes and mortgages to the defendants, as required by the statute if the defendants elect to pay the mortgagee the full amount secured by it. In the first place, the defendants have not so elected. See Eliot Five Cents Savings Bank v. Commercial Union Assurance Co. 142 Mass. 142. Secondly, the release by the plaintiffs of certain other mortgages which they held as collateral security for this mortgage debt does not affect their right to recover. All that in any event they are required to assign and transfer is the mortgage, “ together with the note and debt thereby secured. ” R. L. c. 118, § 60. The policy of the Farmers’ Fire Insurance Company was issued on September 27, 1905, and was, by its terms, “ payable — 384 — in case of loss to Francis I. Amory, first mortgagee, and balance, if any, to Isaac Watchmaker, second mortgagee.” For the reasons already given, we are of opinion that this means “ second mortgagee ” under the mortgage bearing date September 25, which was delivered soon afterward. The two policies on the building upon the second estate — that on West Third Street — were made “payable in case of loss to M. Dana and L. Levin mortgagees, as interest may appear.” On September 25, 1905, the mortgage referred to in the policies was assigned to the plaintiffs, who took and held it as collateral security for the indebtedness secured by the mortgages made to them directly on that day. On December 4, 1905, Dana and Levin executed, by indorsement upon each of the two policies referred to, that issued by the Reliance Insurance Company and that issued by the Aachen and Munich Fire Insurance Company, the following assignment: “ For value received, we hereby assign to Francis I. Amory and Isaac Watchmaker, all our interest as mortgagees in this policy.” This was assented to in an indorsement upon each policy by a duly authorized agent of the company. This mortgage was discharged by the plaintiffs on February 2, 1906. If we assume, without deciding, that after the assignment of the mortgage to the plaintiffs on September 25, 1905, Dana and Levin held rights under these two policies as trustees for the assignees of the mortgage, and that the assignment of the policies on December 4, 1905, was as effectual in favor of the plaintiffs as if it had been made on September 25, it still transferred to them only the rights held by the mortgagees under that mortgage. They had no other rights, and they could not give the plaintiffs’ rights to a payment under these policies for the protection of their interests under another mortgage. Attleborough Savings Bank v. Security Ins. Co. 168 Mass. 147. Palmer Savings Bank v. Ins. Co. of North America, 166 Mass. 189. By the discharge of this mortgage the plaintiffs lost any rights they had to a payment under these policies. As they never have had any rights to insurance upon the property on West Third Street, other than those assigned to them by Dana and Levin as mortgagees, they cannot maintain the actions for insurance upon this property. — 385 — The next question is whether the plaintiffs furnished to the defendants such information in regard to the fire as it was their duty to furnish under the contract, if the insured failed to render to the company forthwith a statement under oath as required by the policy. The rights and obligations of the parties, under such circumstances, were considered in Union Institution for Savings v. Phoenix Ins. Co. 196 Mass. 280,235. It was there held that the mortgagee is not required to make his statement forthwith after the fire, but that he must “ furnish to the company in writing, within a reasonable time, proper information in regard to the loss, as to such matters as a mortgagee reasonably may be expected to know.” We are of opinion that the plaintiffs in this case, in view of all the circumstances and conditions attending the fire, did all that the law réquired of them. See Parker v. Middlesex Mutual Assur. Co. 179 Mass. 528; Hamden v. Milwaukee Mechanics' Ins. Co. 164 Mass. 382; Cook v. North British Mercantile Ins. Co. 183 Mass. 50; Bennett v. Ætna Ins. Co. 201 Mass. 554; Grreenough v. Phoenix Ins. Co. 206 Mass. 247. Inasmuch as the claims of the plaintiffs that can be sustained are all for a loss on the property upon Arlington Street, Amory, the first mortgagee, is entitled to the whole amount of his debt and interest; under the mortgage, due at the time of the fire, to be assessed upon the three companies that issued policies on this property, in proportion to the amounts of their respective policies. The whole amount of his debt and interest on April 12, 1908, was $3,711.10, and he is entitled to receive on account thereof $2,226.66 from the Aachen and Munich Fire Insurance Company, $742.22 from the German Fire Insurance Company and $742.22 from the Farmers’ Fire Insurance Company, with interest in each case from August 8, 1908, sixty days from the time when notice in writing of the fire was furnished to the company under the policy. The amount of the loss was payable at that time, and if the parties had not then agreed upon it, or had it determined, so that an action could be maintained for it, interest should be allowed on it from that date, when it is ascertained. The amount of the loss on this property, as found by the referees, was $5,000. The balance of $1,288.90, after paying Amory, is to go to Watchmaker in part payment of his indebtedness se — 386 — cured by this mortgage. The amount of his indebtedness at the time of the fire was $1,750 and interest from March 25, 1908. Assessing this balance of $1,288.90 upon the three companies, in proportion to the amounts of their respective policies, he is entitled to recover from the Aachen and Munich Company $773.34, from the German Company $257.78 and from the Farmers’ Company $257.78, with interest in each case from August 8, 1908. The judgments are set aside, and judgments for the defendants are ordered in the actions upon the policies covering the property on West Third Street. In the actions on the policies covering the property on Arlington Street, judgments for the plaintiffs are to be entered for the amounts stated in this opinion. So ordered.