In Williams v. Home Insurance Co., 168 Miss. 443, 151 So. 728 (1934) Williams, the appellant, brought an action against Home Insurance Co., appellee, for his interest in the loss of a truck which burned.Summary of this case from Standard Life Insurance Co. of Indiana v. Veal
January 8, 1934.
1. INSURANCE. In action on fire policy, declaration sufficiently alleged that insurer had settled with mortgagee of insured truck for its interest in policy.
Declaration alleged in substance that insurer had settled with mortgagee for its interest in policy in full for amount of two hundred ninety dollars and fifty cents, and that the only interest then outstanding under insurance policy was interest therein of plaintiff, insured, which amounted to more than difference between such two hundred ninety dollars and fifty cents, and amount of policy of five hundred fifty-two dollars; the value of the truck at time of fire being far in excess of five hundred fifty-two dollars.
2. INSURANCE. In action on automobile fire policy made payable only to mortgagee for account of all interests, declaration sufficiently alleged that insurer settled with mortgagee only for its interest and refused to adjust loss with insured in accordance with policy.
Insurance policy, which was made exhibit to declaration, contained loss payable clause in favor of mortgagee of insured truck, and provided that loss should be adjusted with insured, but was to be paid only to mortgagee for account of all interests. The declaration alleged that truck was destroyed by fire, and that insured complied with policy regarding notice and proof of loss, and offered to adjust loss which offer insurer declined, and that after refusing to adjust loss with insured, that insurer, without insured's consent, proceeded to adjust loss with mortgagee so far as its rights were concerned.
Question whether insured suing on automobile fire policy providing for payment to mortgagee for account of all interests should have brought suit in mortgagee's name could not be raised by demurrer, but only by plea.
If insured suing on automobile fire policy providing for payment to mortgagee for account of all interests was required to bring suit in mortgagee's name, failure to do so was mere nonjoinder (Code 1930, section 514).
APPEAL from Circuit Court of Clay County.
Frank A. Critz and B.H. Loving, of West Point, for appellant.
Section 2152 of the Code of 1930 provides that the payment of money secured by any mortgage or deed of trust shall extinguish it, and revest the title in the mortgagor as effectually as if reconveyed. Of course this is that part of the code on land and conveyances, but this same principle is also true and elementary that where personal property is sold and a lien is retained for the balance of the purchase price, or where the title does not pass until the balance of the purchase price is paid, when the purchase price is paid the title to the personal property invests absolutely in the purchaser.
Where the mortgage debt was less than the amount of the loss, the mortgagor had a right to bring suit for the said difference, which would be the amount coming to him.
11 Enc. of Pleading Practice, pages 398, 399; Stewart v. Coleman, 81 So. 653; Stuyvesant Insurance Company v. A.C. Smith Motor Sales Co., 99 So. 575; Scottish, Union National Insurance Co. v. Bridgett Ensley, 178 Miss. 157, 28 So. 822.
In the case of Bacot et al. v. Phoenix Insurance Company, of Brooklyn, 96 Miss. 223, 50 So. 729, it is held that the party in an insurance policy who holds the only valid interest therein may bring suit for such interest.
Lowry v. Insurance Company, 21 So. 664; Hope Oil Mill, Compress Mfg. Co. v. Phoenix Assurance Co., 74 Miss. 320, 21 So. 132; The Home Insurance Company of New York v. Schamagel, 148 So. 596.
McClellan Tubb, of West Point, for appellee.
The demurrer was properly sustained.
The insurance contract sued upon provides that any loss thereunder should be paid only to the Universal Credit Company for the benefit of all interest, and the Universal Credit Company not being a party to this suit, a court of law is without power to render a judgment against the appellee in favor of appellant.
Under the terms of the policy here sued on the Universal Credit Company was the only payee of any loss under the policy, for all interests. If the Universal Credit Company has collected under the policy more than its interest in the truck, appellant's action is against the Universal Credit Company, and not appellee.
There was a settlement of the loss by appellee with the Universal Credit Company and the matter of the loss has been adjudicated, and no cause of action will lie in favor of appellant.
As a general rule the insurer will be discharged from liability if it makes payment of the insurance money to the person who by the terms of the policy is entitled to receive payment.
26 C.J. 452.
But where the loss under the policy is unliquidated, the acceptance of a less amount than that claimed operates as an accord and satisfaction of the whole. If the loss is payable to one of two persons jointly, a release by one will relieve the insurer from liability to the other.
26 C.J. 453.
Appellant brought this action in the circuit court of Clay county against appellee on a fire insurance policy, covering loss by fire of a Ford truck, to recover the sum of two hundred sixty-one dollars and forty cents, alleged to have been appellant's interest in the loss. Appellee demurred to the declaration as amended. The demurrer was sustained, and, appellant declining to plead further, final judgment was entered in favor of appellee, from which judgment appellant prosecutes this appeal.
The policy of insurance was made an exhibit to the declaration. It contained a loss payable clause in favor of the mortgagee of the truck, the Universal Credit Company, and provided that in case of fire the loss should be adjusted with appellant, the purchaser of the truck, but was to be paid, subject to all the conditions in the policy, only to the Universal Credit Company "for the account of all interests." The declaration was in two counts. We deem it unnecessary to set out separately the facts charged in each count. In substance, it was charged that the usual fire insurance policy was issued by appellee to appellant, covering the latter's Ford truck; that the limit of the liability on the policy was five hundred fifty-two dollars; that while the policy was in force the truck was destroyed by fire without appellant's fault; that appellant complied with the provisions of the policy with reference to notice and proof of loss, and offered to adjust the loss with appellee, which offer appellee declined; that the loss was greater than the face of the policy; that at the time of the loss the Universal Credit Company held and owned the purchase-money note for the truck, reserving the title to it until paid for; that the balance of the purchase money due on the truck was two hundred ninety dollars and sixty cents; that after refusing to adjust the loss with appellant, appellee, without appellant's consent, proceeded to adjust the loss with the Universal Credit Company, so far as its rights were concerned, and, using the language of the declaration, "defendant has settled with the Universal Credit Company for its interest in said policy in full for the amount of two hundred ninety dollars and sixty cents, and that the only interest now outstanding under and by virtue of said insurance policy is the interest therein of said plaintiff which amounts to more than the difference between said two hundred ninety dollars and sixty cents and the said amount of said policy of five hundred fifty-two dollars; the value of said truck at the time of said fire was far in excess of said five hundred fifty-two dollars."
One question raised by the demurrer is, Does the declaration, as amended, sufficiently charge that appellee had settled with the mortgagee, the Universal Credit Company, for all of its interest in the policy? We have quoted above the allegation of the declaration with reference to the settlement made between appellee and the Universal Credit Company. We think the allegation is sufficiently definite. Taking the allegation most strongly against the pleader, it sets out in unmistakable terms that the Universal Credit Company no longer had any interest in the proceeds of the policy.
Another question raised by the demurrer is that the settlement made with the Universal Credit Company was in full payment of all liability under the policy. The declaration plainly alleges that the converse was true — that the interest alone of the Universal Credit Company was adjusted and settled, and charges further that in violation of the policy appellee refused to adjust the loss with appellant, although the policy provided that that should be done.
The other question raised by the demurrer is that appellant had no right to sue for the whole or for any part of the loss because the policy expressly provides that payment of loss should be made to the Universal Credit Company "for the account of all interests." Where there is more than one interest in the proceeds of an insurance policy, the general rule is that, notwithstanding one has been eliminated by adjustment and payment, others interested in the proceeds of the policy may sue for the loss they have suffered. Scottish Union Ins. Co. v. Enslie, 78 Miss. 157, 28 So. 822; Bacot v. Phoenix Ins. Co., 96 Miss. 223, 50 So. 729, 25 L.R.A. (N.S.) 1226, Ann. Cas. 1912B, 262; Lowry v. Ins. Co., 75 Miss. 43, 21 So. 664, 37 L.R.A. 779, 65 Am. St. Rep. 587. However, the insurance policies involved in those cases did not contain a provision that in case of loss payments should be made alone to the mortgagee for the benefit of all interests.
Appellant had no cause of action against the Universal Credit Company, for in the adjustment and settlement between it and the appellee it had received only what belonged to it under the terms of the policy, namely the balance of the purchase money due for the truck. Concede that under the policy the legal title to the entire proceeds of the policy was in the Universal Credit Company for the use of itself and appellant, and for that reason appellant should have brought the suit in the name of the Universal Credit Company for his use; this question could not be raised by demurrer, it had to be raised by plea. If required so to do, the failure of appellant to sue in the name of the Universal Credit Company for his own use was a mere nonjoinder. Section 514, Code of 1930; McInnis Lumber Co. v. Rather, 111 Miss. 55, 71 So. 264.
Reversed and remanded.