Summary
In Sargent v. Firemen's Ins. Co. of Newark, 89 N.H. 171, 195 A. 346 (1937), the mortgagor of a truck settled his claim with the third-party tort-feasors.
Summary of this case from Mossler Acceptance Co. v. MooreOpinion
Decided November 2, 1937.
The insurer in a policy of collision insurance payable to the owner or his mortgagee "as interest may appear" is not discharged from its liability to the mortgagee where the owner has made settlement with and released a third party, liable to the owner for causing the collision, the mortgagee not being a party thereto.
ASSUMPSIT, on a policy of collision insurance. Facts found by a referee.
The plaintiff, on October 28, 1932, sold a truck to one Mann who was then a minor but represented himself as being of full age. The sale was made on the deferred payment plan, and as part of the contract it was agreed that the truck should be insured against collision. Accordingly on the day of the sale the defendant, upon the plaintiff's application, issued its policy of collision insurance ($100 deductible) upon the truck. In this policy the truck was described as subject to a mortgage, Mann was named as the assured, and loss was made payable to him and the plaintiff "as interest may appear." The premium was paid.
On November 5, 1932, the truck was involved in a collision with the truck of one Jacobson, who was insured by the Hartford Accident Indemnity Company, and it was damaged to such an extent that the cost of repairing it would be in excess of its value. Thereafter the defendant notified both the plaintiff and Mann that adjustment of the loss had been referred to the Fire Company Adjustment Bureau of Albany, N.Y., and both of them separately consulted with that bureau.
On December 17, 1932, the defendant notified the plaintiff that Mann with the aid of the defendant's attorney, had settled his claim for personal injuries and property damage with Jacobson's insurance carrier, and on the 28th of that month the plaintiff inquired of the defendant "if his interests would be taken care of and whether he would be reimbursed for the full amount of his claim upon the truck." The defendant replied on December 31, 1932, that "our liability which we are willing to discharge is the actual loss and damage to this 1930 Stewart truck in excess of $100.00."
In January, 1933, Mann rescinded the sale of the truck to him.
The findings continue as follows: "On March 24th following, Mr. Sargent was advised by the Bureau that Mr. Mann `had accepted the offer of the Hartford Accident Indemnity Company and had requested Mr. Williams to pay him the money for both the personal injury and property damage claims.' The $850.00 received from the Hartford Accident Indemnity Company was paid to R. Curtis Mann and a general release was executed by him for all damages to his truck as well as personal injuries on account of the collision of November 5, 1932. No part of this payment was received by Mr. Sargent and no release was given by him of his claim for damages."
The question of whether or not, under the above facts, the defendant "is relieved from paying under the policy because of the acts of Mr. Mann in making a settlement with the Hartford Company," was transferred without ruling by Burque, C.J.
Arthur Olson, for the plaintiff, furnished no brief.
Faulkner Bell, for the defendant, furnished no brief.
There is nothing in the facts reported to indicate that the defendant's policy of collision insurance was not in full force and effect when the loss occurred. Neither does anything therein contained indicate that the plaintiff took any part in either Mann's adjustment of the loss with the Hartford company or in his release of Jacobson from further liability. The sole question presented is whether or not the subsequent acts of the mortgagor in settling his loss and releasing his rights against the party responsible for that loss operate to release the defendant from its contractual obligation to the plaintiff.
No case directly in point has come to our attention. With respect to the closely analogous situation, however, in which a mortgagor makes a settlement with the insurer under a policy containing a simple loss payable clause the rule here is that "at the moment of the loss the rights of the parties were fixed. Whatever amount was secured by the policy to the extent of the mortgage debt was due to Woodman [the mortgagee]. To her the defendants were bound to pay it. Hall [the mortgagor] could not release the defendants from their obligation, nor defeat Woodman's right. He could no more adjust the amount of the loss than he could release it." Hall v. Association, 64 N.H. 405, 406. This rule is in accord with the weight of authority elsewhere. First National Bank of Duluth v. Insurance Co., 156 Minn. 1; 38 A.L.R. 383; 26 C.J. 440; 13-14 Huddy, Encyclopedia of Automobile Law, (9th ed.) 234.
If a mortgagor's settlement with and release to an insurer does not discharge the latter's obligation to a mortgagee to whom the loss is made payable, we see no possible way in which a mortgagor's similar transaction with a third party can be held to produce the opposite result.
The fact that the named assured was a minor when the truck was sold to him and that he later rescinded the sale has no bearing upon the issue presented.
In accordance with the agreement of the parties in the Superior Court there must be
Judgment for the plaintiff in the sum of $596.75 with interest from the date of the writ.
All concurred.