Westchester Fire Insurance v. Coverdale

The opinion of the court was delivered by Horton, C. J.: Any error apparent in the final judgment of a district court may be corrected by proceedings in this court, although no exception was taken thereto by the party complaining, and no appearance by him at the trial and judgment, and no motion made to set aside the judgment. This [450] case is properly here for the decision of this court. (Woolley v. Van Volkenburgh, 16 Kas. 20; Zane v. Zane, 5 id. 134; Lender v. Caldwell, 4 id. 339; Koehler v. Ball, 2 id. 160.) Section 59 of the civil code provides: “That the summons shall be directed to the sheriff of the county, and command him to notify the defendant or defendants named therein that he or they have been sued, and must answer the petition filed by the plaintiff, giving his name, at a time stated therein, or the petition will be taken as true, and judgment rendered accordingly; and where the action is on contract for the recovery of money only, there shall be indorsed on the writ the amount, to be furnished in the prceeipe, for which, with interest, judgment will be taken, if the defendant fail to answer.” . . 1. Foreign in surSoiny summons. According to ¶ 3354, Gen. Stat. of 1889, where the insurance company of another state or foreign government is sued, the summons must he directed to the superintendent of insuranee, and shall require the defendant to answer by ; ^ 1 J a certain day, not less than 40 days from its date; form 0f the summons, except its direction to the superintendent of insurance, must be the same as that provided for in § 59 of the civil code. a áy-0i?gMspof’ mortgagee. Upon the face of the policy, attached to and made a part of the petition, is an express contract between the Southern Kansas Farm Loan and Investment Company, the mortgagee of W. T. Coverdale, and the Westchester Fire Insurance Company. This contract is certainly legal in all of its terms. It provides that if there is any loss under the terms of the policy issued on the 6th day of August, 1888, such loss is payable to the loan and investment company, the mortgagee, not to anyone else. Under the “mortgage clause” of the policy, if the premises described in the petition have been destroyed by fire, as alleged, the loan and investment company may maintain an -action for the loss in its x n , _ own name. Its interest is distinct from that of Coverdale, the owner of the premises. (Insurance Co. v. Olcott, 97 Ill. 439.) The loan and investment company is not a party plaintiff [451] or defendant in this action. There were no allegations in the petition that the mortgage referred to has been paid, or that the loan and investment company has transferred or assigned its claim for loss to the plaintiff below. As under the express language of the policy, or the “mortgage clause,” all loss is payable directly to the loan and investment company, Coverdale is not entitled to recover upon the allegations contained in this petition. He is not the payee, and, in order to recover, he must allege the payment of the mortgage held by the loan and investment company, or that the rights of such company have been transferred or assigned to him. Under the “mortgage clause,” the loan and investment company is entitled to receive the full amount of the insurance money, without any regard to Coverdale. If Coverdale were permitted to recover upon the allegations of his petition, construed in connection with the policy of insurance, which is a part thereof, the judgment would be no bar to an action by the loan and investment company for the amount of the loss. Clearly, two actions cannot be maintained upon the same policy by different parties for the recovery of the whole amount insured. (Insurance Co. v. Olcott, supra; Hastings v. Insurance Co., 73 N. Y. 141.) In the latter case it was said: “ In ease the loss is payable to a third person, who has no interest in the property insured, but only claims the insurance as collateral security for liabilities incurred prior to the insurance, the latter only can maintain an action on the policy as an appointee of the owner who is authorized to receive the same.” (Frink v. Insurance Co., 31 How. Pr. 30; 45 Barb. 384; Case v. Insurance Co., 3 N. Y. S. C. [T. & C.] R. 33, 39; Merwin v. Insurance Co., 7 How. 659, affirmed in Court of Appeals; May, Fire Ins., 460; Flanders, Fire Ins., 441, 442.) The rules laid down in the authorities cited have no application, however, to a case where a provision has been inserted in the policy which places the mortgagee upon another and a different footing from that of a mere assignee or appointee to receive the loss. The mortgage clause was agreed upon for this very purpose, and created an independent and a new con [452] tract, which-removes the mortgagees beyond the control or the effect of any act or neglect of the owner of the property, and renders such mortgagees" parties, who have a distinct interest, separate from the owner, embraced in another and a different contract. The tendency of the recent cases is to recognize these distinctions, and thus protect the rights of the mortgagee, when named in the policy, and the interest of the owner and of the mortgagee are regarded as distinct subjects of insurance. (Insurance Co. v. Insurance Co., 55 N. Y. 343; Insurance Co. v. Allen, 43 id. 392.) The judgment of the district court will be reversed, and the case remanded for further proceedings, in accordance with the views expressed herein. All the Justices concurring.