Edge v. St. Paul Fire & Marine Insurance

FULLER, P. J, On the 14th day of December, 1901, appellant company insured a barn for Fred P. Thomas, situated on premises then belonging to him, subject to a mortgage in favor of respondent Anna G. Edge, to whom the policy of insurance was [192] thereupon delivered, and to which was attached the following clause for her benefit: “Loss, if any, payable to Anna G. Edge, mortgagee, as her interest may appear. This slip is hereby attached to and made a part of policy No. 15,719, Aberdeen, S. D. Agency'of the St. Paul Fire & Marine Insurance Company of St. Paul, Minn.” In addition to the usual condition that the policy shall be void if any change, other than by the death of the insured, take place in the interest, title, or possession of the property without the consent of the insurer indorsed thereon, the policy contains the following provision: “If, with the consent of this company, an interest under this policy shall exist in favor of a mortgagee, * *■ * the conditions hereinbefore contained shall apply in the manner expressed in such provisions and conditions of insurance relating to such interests as shall be written upon, attached or appended hereto.” The partial loss here sought to be recovered was occasioned by a violent wind storm occurring shortly after Fred P. Thomas, the owner and mortgagor, had sold and transferred the premises to respondents Hogan, who thereupon paid him the unearned portion of the premium received by such company at the time it executed and delivered the policy. For a valuable consideration, and to avoid the hazard of excessive insurance made payable to a mortgagor in actual possession, the mortgagee was named as payee and given an interest in the policy, which, with the knowledge and consent of the company, was immediately delivered tO1 her and ever thereafter remained in her possession. That the company caused the loss to' be regularly adjusted, immediately upon receipt of the notice from the Hogans that their’ barn had been damaged, is further evidence of an original intention to give the mortgagee a contractual status enabling her to recover, though the mortgagor had forfeited every right under the policy. Now, with the consent of the company, an interest exists in favor of the respondent mortgagee, and we must therefore determine whether the violated condition as to alienation, made applicable to the owner, has been imposed upon such mortgagee by virtue of the following ambiguous recital of the policy: “* * * The conditions hereinbefore contained shall apply in the manner expressed in such provisions and conditions of insurance relating to' such interests as shall be written upon, attached or appended hereto.” [193] Construed in the light of significant circumstances and most strongly against the insurer, as required by' the prevailing rule applied by this court in the early case of McNamara v. Insurance Co., 1 S. D. 342, 47 N. W. 288, it is quite evident that the rights of the mortgagee are unaffected by the act of the owner in selling the premises, for the reason that such condition was not written upon, attached, or appended to the provision by which her interest in the policy was created. Identical language has received a like construction in the following cases: Oakland Home Ins. Co. v. Bank of Commerce, 47 Neb. 717, 66 N. W. 646; Senor and Muntz v. Fire Insurance Co., 181 Mo. 104, 79 S. W. 687; Queen Insurance Co. v. Dearborn Savings, Doan & Building Ass’n, 175 Ill. 115, 51 N. E. 717; Boyd v. Thuringia Insurance Co., 25 Wash. 447, 65 Pac. 785, 55 L. R. A. 165; East v. New Orleans Insurance Association, 26 South. 691; Christenson v. Fidelity Insurance Co., 117 Iowa 77, 90 N. W. 495. It seems logical that the omission to write upon, attach or append to the mortgagee slip any conditions of forfeiture excludes their consideration in this action, and justified the inference that it was the purpose of the company to insure the mortgagee, as her interest may appear, without regard to such conditions. Both reason and the greater weight of authority support the view we have taken, and the judgment appealed from is affirmed.