Opinion
Opinion filed February 7, 1933.
1. — Insurance — Interests of Mortgagor and Mortgagee in Mortgaged Property Separate and Distinct — Each Interest is Separately Insurable. The mortgagor and mortgagee each has an insurable interest in the mortgaged premises and insurance taken by one on his own interest and in his own favor alone does not inure to the benefit of the other.
2. — Insurance — Proceeds of Policy Issued to Mortgagor for Fire Loss to Mortgaged Property — To Whom Payable. Where policy is issued to mortgagor alone and on his interest and the mortgage contains no covenant requiring him to insure for the benefit of the mortgagee, the loss is payable to the mortgagor.
3. — Assignment — May be Effected by Conduct — Acts Necessary to Constitute — Not Essential to be in Writing. Where the mortgagor by deed conveyed to a bank property upon which he held policy of fire insurance on his interest, delivering the deed and policy to the bank and thereafter, with knowledge of this transfer the insurance company received premiums on the policy paid by the bank, there was an effectual assignment of the policy as much so as if the assignment had been in writing.
4. — Insurance — Payment of Proceeds of Policy as Affected by Insolvency of Mortgagor or his Successor in Title. The insolvency of the mortgagor or his assignee does not deprive the assignee of its right to the proceeds of a policy issued on the separate interest of the mortgagor in the mortgaged property.
5. — Interpleader — Jurisdiction to Order Fund Paid into Court — General Appearance of Claimants Contesting for Fund Confers Same on Court as to Person and Subject-Matter. Where an insurance company files a petition to interplead several adverse claimants to a fund which it admits owing, which action is followed by an order of court directing the fund to be paid into court and discharging the insurance company and the several claimants to the fund appear generally and present their respective claims to the fund in connection with which a hearing was had on the merits and the issue submitted, the court thereby obtains complete jurisdiction of the subject-matter and the parties.
Appeal from the Circuit Court of Audrain County. — Hon. W.C. Hughes, Judge.
AFFIRMED.
Eugene E. Bowers and Joseph M. Bone, Jr., for appellant.
(1) On interplea, tried, as in equity, both the law and the evidence are open to review on appeal. Commonwealth Trust Co. v. Du Montimer, 193 Mo. App. 290, 183 S.W. 1137. Where it clearly appears that the verdict is not supported by the evidence, the judgment will be reversed, and a new trial granted. McCartney v. Finnell, 160 Mo. 445, 17 S.W. 446; Ettlinger v. Kahn, 134 Mo. 492, 36 S.W. 37; Morelock v. Chicago, B. Q. By. Co., 112 Mo. App. 640, 87 S.W. 5. Where there is no substantial evidence to support the verdict, the court will on appeal set it aside. Avery v. Fitzgerald, 94 Mo. 207, 7 S.W. 6; Archambault v. Blanchard, 198 Mo. 384, 95 S.W. 834; Bates County Bank v. Mo. Pac. Ry. Co., 98 Mo. 330, 73 S.W. 286. If there is no evidence to sustain a finding of the trial court, judgment is subject to correction on appeal the same as a finding by a jury. Flynn v. Wacker, 151 Mo. 545, 52 S.W. 342; Tipton v. Christopher, 135 Mo. App. 619, 116 S.W. 1125. (2) Fire Insurance is purely a personal indemnity contract, and is not a covenant running with the land; and in the absence of an assignment, oral or written, the respondent bank is a stranger to the insurance policy or contract herein in controversy, even though it may be a grantee of the premises. Millard et al. v. Beaumont, 185 S.W. 547; Bealmer v. Hartford Fire Ins. Co., 193 S.W. 847, Doggett v. Blanke, 70 Mo. App. 499; See, also, 26 C.J. 37, sec. 23. (3) Insufficiency of the security, and insolvency of the maker or debtor, and the showing of these facts in evidence, show an equitable cause for relief by the appellant, and entitles it to claim the proceeds of the insurance policy and apply the same to the reduction of the mortgage indebtedness. Ennis v. Harralson, 101 Ga. 282, 28 S.E. 83; Houston v. Insurance Co., 129 Kan. 337, 282 P. 577; See, also, 26 C.J. 438, sec. 587n-42. (4) It is a maxim of equity, that when two or more equities are asserted in an equitable proceeding the prior equity will prevail; and when the equities are equal the prior and superior equity will prevail. Stratton v. Cole, 216 S.W. 976, 203 Mo. App. 257; State v. Netherton, 26 Mo. App. 414; 21 C.J. 209n-16. (5) The extent of a mortgagee's interest in a fire insurance policy, even by assignment, is not a mere contract, and the assignee is only an appointee to receive payment, and apply the proceeds toward the reduction of the mortgage indebtedness. Allen v. Insurance Co., 285 S.W. 761; See, Brashear v. Insurance Co., 193 S.W. 847; Wilson v. Insurance Co., 240 Mo. 484. (6) In the absence of the record showing judgment and order of the court sustaining the prayer of the bill of interpleader, and ordering the defendants to interplead, the court is without jurisdiction to render judgment on the interplea; and any judgment so rendered is void; and voluntary appearance will not give court jurisdiction over subject-matter. Granite Bituminous Paving Co. v. Stange et al., 8 S.W.2d 1087, l.c. 1089; Novinger Bank v. St. Louis Trust Co., 196 Mo. App. 355, 189 S.W. 826; Little v. St. Louis Union Trust Co., 197 Mo. 281, l.c. 298, 94 S.W. 890, 895; Rosselle v. Farmers' Bank of Norborne, 119 Mo. 84, l.c. 92, 24 S.W. 744; Duke v. Duke, 93 Mo. App. 244; 33 C.J. 446n-19, 20, 23; See, 4 C.J. 1349, sec. 40 (On Appearances); See, also, 15 C.J. 801, sec. 99n-91. (7) Where the record affirmatively shows the nonexistence of some fact necessary to the jurisdiction of the court over the subject matter of the action, a judgment pronounced thereon will be void, and may even be collaterally attacked. Jenkins v. Morrow, 131 Mo. App. 288, 109 S.W. 1051; Hope v. Blair, 105 Mo. 85, 16 S.W. 595; Adams v. Cowles, 95 Mo. 501, 8 S.W. 711.
Fry, Hollingsworth Francis for respondent.
(1) Under the admitted facts in this case, the respondent became the owner of the policy here in question and entitled to all of rights of the original holder. Bealmer v. Ins. Co., 193 S.W. 847; Millard v. Beaumont, 185 S.W. 547. (2) (a) The respondent bank, being the owner of the property, had an insurable interest therein separate and distinct from that of appellant, mortgagee. McDowell v. Morath, 64 Mo. App. l.c. 297; Dick v. Insurance Co., 10 Mo. App. 276, 81 Mo. 103, and cases therein cited; Vogelstein v. Athletic Mining Co., 192 S.W. 760, and cases therein cited; Thomas v. American Automobile Agency, 5 S.W.2d l.c. 661; Rutherford v. Sample, 171 S.W. 578; Annotation, 11 A.L.R. 1299; 26 C.J., pp. 435, 445. (b) And in the absence of an agreement, express or implied, or of a clause in the policy making the loss payable to the mortgagee (appellant), or of an assignment to it, the appellant had no interest in the policy held by the bank upon its own interest. McDowell v. Morath, 64 Mo. App. 297; Julian v. Davis, 259 S.W. 142; 26 C.J., p. 445; 7 Cooley's Briefs on Insurance (2 Ed.), p. 6280; Imp. Elev. Co. v. Bennett, 149 N.W. 372; Bank v. Lbr. Co., 134 So. 154; 8 Cooley's Briefs on Insurance (2 Ed.), p. 970; other cases cited above.
This action was instituted in the Circuit Court of Audrain County, on August 27, 1931, by bill of interpleader.
The defendant Bank of Centralia was, at the time the bill of interpleader was filed, and has been since March 22, 1930, in process of liquidation, in charge of S.L. Cantley as Commissioner of Finance.
On June 11, 1931, a barn on a farm in Audrain County, owned by defendant Bank of Centralia, subject to a deed of trust held by defendant John Hancock Mutual Life Insurance Company, was destroyed by fire. The plaintiff, Farmers' and Laborers' Co-operative Insurance Association, carried a fire insurance policy on said barn and other buildings, which policy of insurance was in full force and effect at the time of the fire. The amount of the loss resulting from the destruction of the barn by fire, as agreed upon by the parties, was $1400. The defendant Bank of Centralia and the defendant John Hancock Mutual Life Insurance Company each made claim to the proceeds of the policy. Thereupon the plaintiff, Farmers and Laborers' Co-operative Insurance Association, filed its bill of interpleader. Plaintiff, pursuant to the court's order, paid into court $1400, the proceeds of the policy, and was discharged. Defendants interpleaded for the fund thus paid into court.
Upon the trial the court found the issues in favor of defendant, Bank of Centralia, and gave judgment directing the fund to be paid over to said bank. From this judgment the defendant John Hancock Mutual Life Insurance Company has appealed to this court.
The farm upon which the barn destroyed by fire was located was formerly owned by Thurman Chapman, subject to a first deed of trust given by Chapman and his wife to the Maxwell Investment Company to secure the payment of their promissory note in the sum of $5,000, under date of January 1, 1920. Said note and deed of trust were assigned by the Maxwell Investment Company to defendant John Hancock Mutual Life Insurance Company, on May 7, 1920.
This deed of trust expressly provided that the mortgagor was not required to keep the improvements on the farm insured against loss by fire.
On September 6, 1921, Chapman gave a second deed of trust on said farm to J.T. Mitchell to secure the payment of his promissory note for $2500. This second deed of trust was foreclosed on July 21, 1928, and R.P. Price, then the president of defendant Bank of Centralia, became the record purchaser thereof, subject, of course, to said first deed of trust held by defendant Hancock Company.
On the 13th day of August, 1928, R.P. Price, still the record owner of said farm, obtained from the Farmers' and Laborers' Co-operative Insurance Association the policy of insurance here involved. This policy of insurance was made payable to R.P. Price, there being no clause in the policy making the same payable to the mortgagee.
On March 16, 1929, R.P. Price, for a recited consideration of $1,000, conveyed the farm to defendant Bank of Centralia. The deed conveying the farm to the bank was duly recorded in the office of the Recorder of Deeds in Audrain County, on March 19, 1929. The bank acquired the farm subject to, but did not assume, the first deed of trust held by the Hancock Company. When the Commissioner of Finance took charge of the bank, in March, 1930, he found the deed from R.P. Price and the policy of insurance among the papers of the bank. From the time the Commissioner took charge of the bank up to and beyond the time of the fire, he paid the premium assessments made by the insurance association. The first of these assessments was issued to and in the name of R.P. Price, who delivered it over to the Commissioner for payment. The Commissioner called the attention of the secretary of the insurance association to the fact that the Bank of Centralia was then the owner of the farm, and the assessments were thereafter made against the bank and were paid by the bank.
On July 13, 1931, after the fire, the insurance association, through its secretary, after inspection of the insured premises, reduced the amount of the insurance carried on the premises and notified the bank as the holder of the insurance of such reduction.
The Hancock Company offered evidence tending to prove that both the bank and Chapman were insolvent at the time the bank was placed in charge of the Finance Commissioner for liquidation; that at the time of the fire the value of the farm with the barn on it was less than the indebtedness secured by the first deed of trust; and that the destruction of the barn by fire reduced the value of the farm about $800.
The appellant contends that it is entitled to the proceeds of the policy of insurance because the value of the farm covered by its mortgage is insufficient to pay the mortgage indebtedness.
It is settled law in this State, and elsewhere as well, that the mortgagor and the mortgagee each has an insurable interest in the mortgaged premises, and insurance taken by one on his own interest and in his own favor alone does not inure to the benefit of the other. Where the mortgagor insures his own interest and pays the premium, and there is no covenant in the mortgage requiring him to insure for the benefit of the mortgagee, and the loss is not made payable to the mortgagee, the mortgagor is, notwithstanding the mortgage, entitled to the full amount of the loss, for the whole loss is his own, and the mortgagee has no right or claim to the proceeds of the insurance. Conversely the mortgagor has no right or claim to the proceeds of insurance taken out by the mortgagee on his own interest. [Dick v. Franklin Fire Insurance Co., 10 Mo. App. 376; Id., 81 Mo. 103; McDowell v. Morath, 64 Mo. App. 290, l.c. 297; Vogelstein v. Athletic Mining Co. (Mo. App.), 192 S.W. 760; Thomas v. American Automobile Underwriters' Agency (Mo. App.), 5 S.W.2d 660; Julian v. Davis, 214 Mo. App. 525, 259 S.W. 142; Millard v. Beaumont, 194 Mo. App. 69, 185 S.W. 547.]
Appellant urges in argument that there was no assignment to the bank of the policy taken out by R.P. Price on his interest in the mortgaged property, and that, therefore, the bank, being a stranger to the policy, is not entitled to the proceeds arising therefrom. If this were so, we are unable to see how it would aid the appellant in its claim to the proceeds. However, the evidence clearly shows an assignment of the policy by Price to the bank with the full knowledge and assent of the insurer. The policy was delivered to the bank along with the deed. Thereafter, the bank paid the premiums on the policy to the insurer. The premiums were accepted by the insurer with full knowledge that the policy had been transferred to the bank by Price along with his interest in the property, and afterwards, both before and after the fire, recognized and treated the bank as the insured under the policy. This was as effectual an assignment of the policy as if the assignment had been set down in writing and signed by the parties.
The appellant further insists that it is entitled to the proceeds of the policy because both the bank and the mortgagor are insolvent and unable to pay the mortgage indebtedness. We are unable to see how this fact entitles the appellant to the proceeds of the policy, which was carried and paid for by the bank for its own protection. How is the bank concerned with the payment of the mortgage indebtedness? It does not owe the mortgage indebtedness. It did not assume such indebtedness, and is under no obligations to pay it.
There is no equity in appellant's claim. It lost nothing by the destruction of the barn that it would not have lost if the policy carried and paid for by the bank had never been issued. It had a right to take out and pay for insurance on its own insurable interest in the property, or to require the mortgagor to provide such insurance, to protect itself against the insufficiency of the security and the insolvency of the mortgagor. Because it did not see fit to thus provide for its own protection it now claims the right to take from the bank the proceeds of insurance carried by the bank at its own expense for its own protection. We know of no principle of equity that may be invoked to achieve this end.
The appellant contends, as a further ground for the reversal of the judgment below, that the court, having made no order requiring the claimants to interplead, was, therefore, without jurisdiction of the subject-matter. There is no substance in this contention. Upon the hearing of the bill of interpleader the fund in dispute was ordered paid into court. This was done, and plaintiff was discharged. The claimants appeared and interpleaded for the fund, tried the cause, and submitted the issues in controversy. It is clear that the court thus obtained complete jurisdiction of both the subject-matter and the parties.
The Commissioner recommends that the judgment of the circuit court be affirmed.
The foregoing opinion of SUTTON, C., is adopted as the opinion of the court. The judgment of the circuit court is accordingly affirmed. Becker, P.J., and Kane and McCullen, JJ., concur.