Georgia Home Insurance v. Stein

Woods, J., delivered the opinion of the court. This is an action on a policy of insurance, issued October 21, [948] 1892, for $2,300, containing the stipulation that any loss that may be proven to be due Stein under the contract for insurance shall be payable to Tribette, the usee in the suit. At the date of the issuance of the policy, Tribette held a mortgage made by Stein for $10,000, which embraced the property covered by the policy of insurance. The appellant knew of this mortgage,, and ‘' consented to it in the usual manner by putting a loss, payable clause in the policy, payable to W. H. Tribette,” to' quote the language employed in the testimony of Drennan, the witness of the appellant on the trial, and the company’s agent, who issued the policy of insurance sued on. The policy contained the usual conditions forbidding any increase of the risk by any means within the control of the assured, without the consent of the company indorsed on the policy, and forbidding any mortgage or other lien on the property insured, either before or after the issuance of the policy, without the fact being-indorsed on the policy, on pain of forfeiture of any right to recover by the insured in case of loss. The defense of the company to the action on the policy alleges breaches of these conditions, and a forfeiture of a right to recovery by the insured because of the execution of a deed of trust by Stein in favor of the Delta Bank, on April 27, 1891, on the property insured, to secure a debt of $10,000, without the knowledge or consent of the insurance company; and because of the execution of another trust-deed by Stein in favor of the Delta Bank for $10,000, under date January 3, 1893, on the. property insured, and without the knowledge or consent of the insurer; and because of the execution of another trust-deed on the property insured by Stein in favor of Tribette for $2,000, under date of November 3, 1892, and without the knowledge or consent of the insurance company. We dispose of the defense, in so far as it rests upon the execution of the two trust-deeds of $10,000 each, given the Delta Bank, by stating that the evidence leaves no doubt in our mind that Drennan was advised perfectly of the execution of the first of these trust-deeds949 when be issued the policy sued on. Indeed, his own evidence on this point can scarcely be considered a serious denial of this knowledge on his part. On his evidence, and that of McDonald, on this point, we are without doubt. The second trust-deed of $10,000, dated January 3, 1893, was simply a renewal of the earlier security, and did not increase the incumbrance, of which the company had knowledge when it made the contract of insurance evidenced by the policy sued on. The deed of trust of $2,000, of November 3, 1892, in Tribette’s. favor, did not increase the amount of the lien on the property insured. When the policy was issued, the company knew of, and consented to, the incumbrance on the property of $10,000 in Tribette’s favor, The debt secured by this deed of trust was payable in five equal annual installments. When the first installment of $2,000 was paid by Stein to Tribette, is uncertain, but it is not uncertain that this sum of $2,000, paid by Stein to Tribette as the first installment, was reloaned by the latter .to the former, and the deed of trust of November 3, 1892, for $2,000, was executed to secure this reloan of that amount. The incumbrance was not thereby increased. The insurer had consented that the property might be incumbered in Tribette’s favor to the amount of $10,000, and the reloan simply restored the status quo existing at the date of the issuance of the policy, as to maximum incumbrance allowable in Tribette’s favor. Kister v. Insurance Co., 128 Pa. St., 553; Gould v. Insurance Co., 134 Pa. St., 570; Russell v. Insurance Co., 71 Iowa, 69; Mowry v. Insurance Co., 64 Hun (N. Y.), 137. We are of opinion, therefore, that no forfeiture was worked in the execution of any or all of the deeds of trust referred to. There was no error in the court’s action in permitting evidence to go to the jury showing the value of the property destroyed was greater than was determined by the award of the .appraisers appointed by Stein and the insurance company; nor was it error to refuse the company’s eleventh instruction, by which the j ury was sought to be informed that the sum awarded [950] by the appraisers appointed by Stein and the company was conclusive. Tribette was not a party to this arbitration or ap-praisement, and yet, by the express terms of the policy, the loss was made payable to him. He was the real party in interest, and when the loss occurred his rights became fixed, and were not to be diminished or destroyed by his debtor’s subsequent action. Stein had no more power to reduce the amount due and payable by the company to Tribette, either directly or by arbitration, than she had to surrender the policy and release the company from all obligation to pay Tribette anything. This question has been before many courts, and the opinions speak one voice. Fire Association v. Blum, 63 Texas, 282; Hall v. Fire Association, 64 N H., 405; Bergman v. Insurance Co., 92 Ky., 494; Harrington v. Insurance Co., 124 Mass., 126; Insurance Co. v. Sweetser, 116 Ind., 370; Brown v. Insurance Co., 5 R. I., 394. Affirmed.