Mayfield v. Dwelling House Mutual Insurance

Dean, J. This action was begun in the district court for Richardson county by Vivien I. Mayfield and George Goldsmith, plaintiffs, against the Dwelling House Mutual Insurance Company, hereinafter called the company, to recover $4,000 for the total loss by fire of a certain business property known as the Richardson County Hatchery, which was owned by plaintiffs and insured under two fire insurance policies issued by the company. For some years before June 20, 1929, Mrs. Belle Marion was the owner of the insured property, but on that date she sold the property to plaintiffs, for which they executed their promissory note for $2,500, payable to Mrs. Marion, and secured by a first mortgage on the premises. When the plaintiffs bought the property Mrs. Marion assigned both insurance policies to them and the assignments were regularly approved by the insurance company. A mort [219] gage clause was inserted in the policies to protect Mrs. Marion’s interest as mortgagee. On or about November 15, 1929, the plaintiffs negotiated for the sale of the property to Bennett E. Cook. Mrs. Marion testified that she executed a release of her mortgage against plaintiffs and accepted a mortgage from Cook under a representation that the insurance policies would be assigned to him with a mortgage clause inserted therein for her protection. But she now contends that plaintiffs did not sell the property to Cook nor was the insurance transferred to him. The company admitted that the assignment of the policies from Mrs. Marion to plaintiffs was made with the consent of the company. But the company contends that neither Mrs. Marion nor the plaintiffs have any beneficial interest in the policies from the fact that the plaintiffs conveyed the title to the property to Cook. The company also argues that the mortgage held by Mrs. Marion against the plaintiffs was satisfied by the payment of $300 in cash to her by plaintiffs and also by the execution of a mortgage from Cook to her for the unpaid remainder of the $2,500 mortgage. The court found that the plaintiffs Mayfield and Goldsmith are now and on the date of the fire were the owners of the property in suit and that the deed executed by them to Cook is a void instrument. The court also found that $4,097.21 is due the plaintiffs from the insurance company under the provisions of the insurance policies. In respect of the money owing by the plaintiffs to Mrs. Marion the court found that $2,157.16 was due her pursuant to the terms of the mortgage executed by the plaintiffs, and that this amount should be deducted from the sum to be paid to the plaintiffs by the insurance company. The court further ordered that Mrs. Marion’s mortgage be reinstated and that the release executed by her, in favor of plaintiffs, at the time of the transactions between plaintiffs and Cook, be annulled and held for naught. The insurance company has appealed. [220] - In whom was the title to the insured property vested before ,and at the time it was destroyed by fire and to whom should the insurance, if any, be paid is the question before us. That the title to the property was and now is in the defendant Cook is the argument of the insurance company. But Cook makes no claim to the property whatever nor does he claim any insurance. He contends that no title to the property passed to him. The plaintiffs contend that the property belonged to them from the fact that the sale of the property to Cook had not yet been consummated at the time of the fire. And Mrs. Marion also contends that plaintiffs owned the property and that .she is therefore entitled to recover from them the amount due on her mortgage. During the time in question here the plaintiffs were engaged in business in Falls City and, in respect of Cook’s interest in the transaction, Mayfield testified that Cook refused to accept the deed until certain incumbrances outstanding against the property were paid. And Goldsmith testified that, it was understood at the time that Mrs. Marion’s interest should be protected in the transfer of the property by the insertion of 'a mortgage clause in her favor in the insurance policies. The company’s agent, Mr. Lichty, testified that the transfer of the policies to plaintiffs by Mrs. Marion was approved by the company at the time the property was sold to them and that the premiums thereon had then been paid. From Lichty’s evidence it appears that, some time before the fire, he was informed by the plaintiffs that they contemplated selling the property to Cook and that he, Lichty, then urged that the insurance should be transferred to Cook. He testified that he did not then know that the details of the transaction had not been closed. Cook testified that he received a deed from the plaintiffs by mail,' but that he returned it to them and informed plaintiffs that he refused to accept the deed until certain bills outstanding against the business had been paid. Cook [221] also testified that he signed a mortgage in favor of Mrs. Marion, but that he did not authorize the filing of the mortgage and that he instructed the plaintiffs to hold it until they had paid certain debts against the property. It is elementary that, to effect a sale and conveyance of a valid title to real estate, there must be a delivery of a deed of conveyance to the purchaser, and an understanding between the parties thereto that the title to the‘property would thereby pass. No particular act or form of words is necessary to constitute such delivery, and delivery may be presumed from the facts and circumstances of each particular case, provided an intention to deliver is shown. Brown v. Westerfield, 47 Neb. 399; Flannery v. Flannery, 99 Neb. 557; Brooks v. Brooks, 105 Neb. 235. But a recognized authority has said: “An estate can-pot be thrust upon a person against his will. * * * The rule as to 'the necessity of acceptance is sometimes declared in the terms of a definition of a complete delivery, as that delivery must be the concurrent act of two parties; which, of course, is tantamount to saying that the deed must be accepted.” 8 R. C. L. 975, sec. 46. Clearly the title to the property herein did not pass to Cook, from the fact that the deed was not accepted by him but was immediately returned to the plaintiffs. Where a deed is delivered to a prospective purchaser of real estate by the owners thereof without the performance by such owners of certain conditions required as a precedent to its acceptance by the purchaser, and the deed is immediately returned to the owners unaccepted, the title to such property does not pass to the purchaser. We think that the $300 paid to Mrs. Marion by plaintiffs at the time of the alleged sale of the property to Cook was due on the note under the terms thereof, and that the money she received from Cook was likewise due as a payment on the original note, and that Mrs. Marion therefore received no consideration for releasing her mortgage against plaintiffs. Where real estate is sold sub [222] ject to an existing mortgage thereon, and the mortgagee was induced to release the original mortgage upon a fraudulent representation that a mortgage clause would be inserted in certain insurance policies to protect her interest as such mortgagee, the release will be set aside and the former mortgage reinstated, provided there are no intervening equities of innocent third parties. “If the release is made through inadvertence or mistake, the lien of the mortgage may be reinstated by proper proceedings taken therefor.” Gadsden v. Johnson, 65 Neb. 447. See Frerking v. Thomas, 64 Neb. 193. Other assignments of alleged error have been pointed out, but we do not find it necessary to discuss them. The insurance policies were in full force and effect at the time of the destruction of the property by fire, and it is incumbent oh the insurance company to respond in damages for the full amounts named in the policies, with lawful interest thereon. The judgment is in all things Affirmed.