Weed v. Fire Ass'n

The plaintiff brought this action as mortgagee to recover on a fire insurance policy issued by the defendant and asks to have the policy reformed so that it shall be payable to him as mortgagee, as his interest may appear, and as so reformed seeks to recover thereon the amount of the face of the policy and interest from the time of the loss on the same.

The answer denies many of the allegations of the complaint and alleges various grounds on which it is claimed by the defendant that the policy is void. The leading facts established on the trial, which bear upon the questions raised on this appeal, are as follows: ,

On and prior to the 30th of October, 1873, one Orson Richards was the owner of certain mill property in Washington county, and on that day he and his wife executed a mortgage to Henry E. Weed, the plaintiff, to secure the payment within three years of all advances that might thereafter be made by Weed to Richards. On the 1st day of May, 1875, Richards and wife executed to Dean Sage a deed of “ all the lands, tenements, hereditaments, real estate, mills, mill privileges, booms, dams, water rights, right of way, easements and appurtenances thereunto belonging, or in any wise appertaining, situate, lying and being in the counties of Essex, Warren, Hamilton, Washington and Saratoga, belonging to them or either of them.” *

This conveyance was subject to all incumbrances then existing on said premises, and was in trust, to hold, enjoy and dispose of the same,» and receive the rents, issues and profits and the proceeds thereof and so long as any of the said property remains undisposed of under the power and in pursuance of the trust, and make application of the rents, issues and profits, as provided in such conveyance, with power to sell, and after paying the specific liens and incumbrances thereon to make application of the remaining proceeds and all other moneys and property received bj him as follows: “First, to pay the expenses of the execution of the ■trust and counsel fees and commission in carrying out the same. Second, to distribute fro rata among all the creditors of Richards according to their legal priority. And the remainder of all the funds received by him as trustee, according to the provisions of such trust deed, after payment of all the obligations of Richards, he was to reconvey to Orson Richards. On the execution of the mortgage by Richards to Weed, he gave Richards his check for $15,125, which Richards used in taking up his papers at the bank. About September 20, 1877, Weed commenced an action to foreclose his mortgage, on which judgment of foreclosure and sale was entered about the 6th of December, 1877, but no sale was made under the judgment

Orson Richards died in September, 1879, and Eben Richards and Julia A. Richards were, on the 13th of November, 1879, appointed administrators of his estate.

On the 23d of August, 1881, the agent of the defendant issued to the estate of O. Richards a policy of insurance against loss or damage by fire in the sum of $1000 upon the property in ques

In Weed v. The Hamburgh Insurance Co., 39 St. Rep., 638 , it was held that it was the interest of the plaintiff as mortgagee that was insured. That policy was substantially like the one in suit in this action, except that it contained a clause that the loss, if any,, was payable to Weed as his mortgaged interest should appear. That clause has been inserted in this policy for the purpose of this, action by the stipulation of the parties.

All the questions raised in this case seem to have been disposed, of adversely to the contention of the appellant in that case and: upon evidence substantially the same. In Weed v. The London & Lancashire Ins. Co., 116 N. Y., 114 ; 26 St. Rep., 414 , the court hold, that the court should endeavor to give to the phrase “estate of 0. Richards” such meaning as will harmonize with the conditions of the policy, if it can be done without doing violence to the words used, and that it was not necessary to the validity of the policy that the name of the assured should appear in it, and if the description is imperfect and ambiguous, resort may be had to» extrinsic evidence to ascertain the meaning and intent of the parties. In this contract of insurance Weed at the time of the insurance was mortgagee, and as the policy is reformed must be regarded as appearing as such on the face of the policy.

His mortgage was a lien on the property at the time of the execution of the trust deed to Sage. That deed could not therefore divest him of his mortgage interest, and to the extent of that, interest his rights were as if that deed had not been made.

He presumably makes a contract with the defendant to protect that, interest by his insurance. Under such circumstances it can hardly be doubted that the phrase “estate of 0. Richards” as used in the-policy was by the parties intended to embrace the interest which Weed had in it as mortgagee of the property. That clearly was an insurable interest,and the j ury having found in favor of the plaintiff on that issue upon the evidence in the policy and the extrinsic evidence-offered upon that subject, we cannot disturb that finding. If this insurance had been effected by or in favor of a party not having-a lien on the property prior to the Sage deed, then a different, question would have arisen, and in such a case it would be held, as in Weed v. Ins. Co., 116 N. Y., 106 ; 26 St. Rep., 414 , that the-Sage deed had divested Orson Richards of the title to the property. But here the interest of the plaintiff as mortgagee had attached to that estate prior to the conveyance to Sage. But if we-should assume that the words “estate of O. Richards” relate only to that estate independent of this prior incumbrance, still there could be an insurable interest, as the trust deed directed the surplus to be returned to Orson Richards. Cone v. Niagara Fire Ins. Co., 60 N. Y., 619 ; Wood on Fire Ins., p. 540, § 313. The case discloses that at the conclusion of the evidence both parties, asked the court to direct a verdict and that neither party asked to submit any questions of fact to the jury. By this practice the parties treated the case as presenting questions of law only, and as there was evidence to support the rulings of the judge, it cannot

Judgment affirmed, with costs.

Learned, P. J., and Kellogg, J., concur.