East v. New Orleans Insurance

Terral, J., delivered the opinion of the court. The conveyance of the insured premises by James W. East to Smith debars James W. East of any suit against the defendant company, for that conveyance, we think, made a change in the title and interest of James W. East in said premises, and such change in the title or interest of James W. East, by the express terms of the policy, avoids it as to him. The right of William Thomas East, however, is governed by two clauses of the policy —i. e., by the loss payable clause and the mortgage clause. The loss payable clause stipulates to pay William Thomas East whatever interest he may have in the insured premises at the time of the loss, and the mortgage clause, in effect, stipulates to pay William Thomas East his interest in the manner and on the conditions expressed in the loss payable clause. Taking the two clauses together, they amount to a promise to pay William Thomas East his interest in the insured premises, without regard to the conditions affecting the interest of James W. East. There is no condition in the loss payable clause, or elsewhere in the policy, that carries the conditions attached to the interest of James W. East and applies, them as conditions to the interest of William Thomas East, and there being none expressed in the policy they cannot be imparted by implication. As the loss payable clause agrees to pay William Thomas East his interest in the insured premises at the time of loss, and as the mortgage clause stipulates that the only conditions that shall [702] apply to the interest of William Thomas East are those expressed in the loss payable clause, these two clauses constitute a promise to pay William Thomas East whatever sum may be due him by James W. East at the time of loss, without regard to any act or default of James W. East. There is no condition, except in the loss payable clause and in the mortgage clause, relating to the interest of William Thomas East, and, by the express stipulations of the latter clause, the conditions that should affect the right of William Thomas East are those conditions written upon or attached to. the conditions relating to such interest, and as there are. no conditions relating to such interest written upon or attached thereto, except such as have been complied with by William Thomas East, we conclude upon the averments of his declaration he is entitled to recover the sum sued for. The precise question here, on a policy similar in all respects to this, and in a suit on similar facts, was decided by the supreme court of Nebraska, in which decision the court, said: “In order to render the general conditions of the policy applicable to the interest of the mortgagee there must be written upon, attached, or appended to the policy, relating to the interest of the mortgagee, some provision or condition expressing in what manner-the conditions of the policy shall be applicable. Neither in the loss payable clause nor otherwise by writing upon, attached to or appended to the policy was there any provision or condition carrying the conditions of the policy into such clause or rendering them in any manner applicable. In this case, in view of the clause of the policy, the loss payable clause must be taken as if it contained an express provision insuring the mortgagee -without regard to the conditions imposed upon the owner in the body of the policy.” Oakland H. I. Co. v. Bank of Commerce, 58 Am. St. Rep., 663, s.c.. 47 Neb., 717. Reversed and remanded..