Crawford v. Aachen & Munich Fire Insurance

Mr. Presiding Justice Windes delivered the opinion of the court. It is apparent from the foregoing statement of the evidence, that while the policy sued upon purports to be and is in form, a contract of insurance by the appellee company of the property of the St. Joseph Hotel Co., loss, if any, payable to Graham and Crawford, as their interest may appear, it is in fact and in law a contract insuring the interests in the property of the hotel company of Graham and Crawford,as it may appear. The contract was made with Crawford by the agents of appellee and delivered to him. Under a similar state of facts to the case at bar, it was held in Queen Ins. Co, v. Dearborn S. L. & S. Ass’n, 175 Ill. 115, that such an insurance contract was an independent agreement with the mortgagees in that case, which might be enforced in their own names. The only difference between the contract in that case and the one here under consideration, is in the use of the word “ hereto” at the end of the second clause of the policy quoted in the statement, while in that case the word “ thereto” was used. We are unable to perceive why the use of the word “hereto” should make any difference with the principle announced in that case, viz., that the contract was in fact a contract of insurance with the mortgagee instead of being one with the mortgagor. It follows that the earlier cases in the Supreme Court and in other jurisdictions which seem to hold to the contrary, are not controlling. At the time the policy in question was taken out, both Mr. Crawford and Mr. Graham had insurable interests in the property of the hotel company, both because they Avere mortgagees of its property, and stockholders of all the stock of the hotel company except one share of $500. 1 Cook on Stockholders, Sec. 11, p. 18; 1 May on Ins., Sec. 76 (3d Ed.); 13 Am. & Eng. Ency. Law (2d Ed.), 176, and cases cited; Riggs v. C. M. Ins. Co., 125 N. Y. 7-11, and cases cited; Glover v. Wells, 40 Ill. App. 350; affirmed, 140 Ill. 102. Some of t*he authorities seem to hold that a stockholder, as such, has not an insurable .interest Avhere the corporation has already insured its property to its full value, but in this case the only evidence of other insurance than the policy here in question, is of two other policies aggregating $1,500. Counsel for appellee say in their brief that the corporation had insurance to the amount of $19,000, but they do not refer to the record, and neither the abstract nor the additional abstract shows any such amount of insurance. "Even if it did so show, it would still be for less than the value of the property of the hotel company, which appears from the evidence to have been more than $47,000. There is no evidence of any amount of indebtedness of the hotel company when the policy was issued. Before the fire occurred there is evidence to the effect that the mortgage to Crawford and Graham had been paid, and also that it was still a lien. Even if the mortgage was paid, there still remained, at the time of the fire, an interest in Mr. Crawford as stockholder in the hotel company, worth more than $20,000, which is sufficient as an insurable interest in him. As will be seen from the statement, on March 3, 1898, some four months prior to the fire, the hotel company and Graham, as mortgagee, canceled the policy in question, so far as their interests were concerned, and Graham, by signing Crawford’s name, attempted to cancel the policy for Crawford as mortgagee, but there is no sufficient evidence that he had any authority so to do, nor was his act in that regard ever approved or ratified by Crawford. It is, however, contended that because the hotel company paid to Crawford the unearned premium of $17.75, which was paid to it by the appellee at the time the policy was canceled as to the hotel company, he thereby ratified the cancellation. We think not. At the time Crawford received this unearned premium his rights under the policy had long before accrued, because of the loss, and such payment to him, without express agreement to that effect, would not be a waiver of his claim against appellee for the loss. E o such agreement is shown, but on the contrary he thereafter assigned his interest in the policy to Mr. Stone, which would tend to show that he still considered the policy in force. Even if the cancellation of the policy as to Crawford as mortgagee could be said to be binding upon him, still there remained his interest as stockholder, as to which interest there is no evidence whatever of any cancellation of the policy. The learned counsel for appellee make the further claim that because there is a provision in the policy that it should be void in case it should be assigned before a loss without the consent of the company indorsed thereon, there could be no recovery, for the reason that the agreement of settlement of May 4, 1893, referred to in the statement, is in effect an assignment. We can not so construe it. There is no language in the agreement to that effect, but only that in case of a loss the hotel company should pay to Stone any amount that it might receive upon the policy. It was suggested in oral argument, though it does not appear in the brief and argument for appellee, that in as-, much as Mr. Crawford had died pending the suit, and there had been no substitution of his personal representative as plaintiff, and because Graham had canceled his interest in the policy, there could be no recovery in his name. This suggestion can not avail appellee, for two reasons, viz.: First, there was no attempt, so far as appears from the record, by Mr. Graham to cancel any interest he had in the policy, except as mortgagee, thus leaving his interest as stockholder still in force and the policy uncanceled, and all his interest in the policy was assigned to Mr. Stone; second, even if his interest in the policy had all been canceled, leaving no right of action except in the representative of Mr. Crawford, the suit would not, under the statute, chapter 1, section 23, abate, but could properly be conducted in the name of Stone alone. The learned trial court, although it seems to have held the law, judging from the proposition marked “held,” with the appellant, still, as matter of fact, it found that the policy had been canceled. This we think was manifestly against the evidence. The fact that the name of Stone was not substituted as plaintiff in the Circuit Court, is not cause for reversal under the statute of amendments, chapter 7, section 6. The judgment of the Circuit Court is reversed and judgment entered here in favor of appellant and against appellee, for the amount of the policy, less $17.75, the unearned premium paid to Mr. Crawford, with interest at five per centum per annum from July 12, 1898 (when demand for payment was made), to this date, making a total of $1,749.50. He will also recover his costs in the Circuit Court. Reversed, and judgment in this court.