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“The foreclosure of plaintiff's mortgage under the statute, so long as the redemption remained open, could not be regarded as a sale or transfer by the owner of the fee, who took no step and was not by himself or tenants disturbed under or before the fire, and it may be doubted whether a foreclosure of an existing mortgage could have any such effect at all.”
In Foiles v. Insurance Co., 175 Mich. 716 (141 N. W. 879), which was a case where the vendee in a land contract gave a quitclaim deed to his vendor, it was held that the transfer was not such a change of interest in the property insured as would, within the provisions of the policy, make it void. In that case, however, the policy was issued in the first instance to the vendor. Among other things, it was said:
"A sale or conveyance of property which increases the interest of the insured, as where the insured mortgagee buys in the property at foreclosure sale or takes a conveyance from the mortgagor, thereby acquiring the whole interest, is not a breach of this condition.'
While these cases are not conclusive, they are persuasive in the direction of the contention of the appellee.
3. Was the assignment of the policy to the plaintiffs before the loss without the consent of the defendant of no effect? Counsel for the appellant again quote fully from the provisions of the standard policy and insist that in the instant case the consent of the company to the assignment was necessary, citing, among other authorities, Excelsior Foundry Co. v. Assurance Co., 135 Mich. 467 (98 N. W. 9, 3 Am. & Eng. Ann. Cas. 707).
We think an examination of this case will show it clearly distinguishable from the one before us. It does not appear from the opinion, as in this case, that there was an attempt to insure the vendor and vendee as their respective interests may appear. There does appear in the opinion the following:
"In a note to Morrison's Adm'r v. Insurance Co., 59 Am. Dec. at page 306 (s. c. 18 Mo. 262), there is a classification of the clauses in insurance policies in restraint of alienation. The second class of policies mentioned are those containing a clause restricting a transfer, change, or termination of the interest of the insured in the property insured. At page 308 it is said of this class that the generally accepted interpretation is that the whole interest of the insured must pass, and while an insurable interest remains he may recover. To the same effect is the opinion in Grable v. Insurance Co., 32 Neb. 645 (49 N. W. 713).”
In Welch v. Assurance Co., 148 Cal. 223 (82 Pac. 964, 113 Am. St. Rep. 223, 7 Am. & Eng. Ann. Cas. 396), decided in 1905, the second headnote reads:
“EFFECT OF MORTGAGE CLAUSE-CONDITIONS NOT ATTACHED TO INTEREST.-Where the policy provided that 'if, with the consent of this company, an interest under this policy shall exist in favor of a mortgagee or of any person or corporation having an interest in the subject of insurance other than the interest of the insured as described herein, the conditions hereinbefore contained shall apply in such conditions of insurance relating to such interest as shall be written upon, attached, or appended hereto,' such provision was intended to have the effect of preventing the conditions previously mentioned in the policy from applying to such interest unless the conditions should be again written upon, attached, or appended to the policy, as applicable to such interest, and the interest of the mortgagee is free from all conditions not so attached."
This note is justified by the opinion. It will be noticed, as will appear later, the clause construed is in the same language as in our statute. In the majority opinion occurs the following:
“The mortgage clause in the policy under consideration is a part of the form of policy known as the 'New York standard form.' This form was prescribed by statute in New York, and made obligatory after May 1, 1887, on all insurance companies doing business in that State. 3 N. Y. Rev. Stat. p. 1663. It has since been prescribed by statute in Pennsylvania (Brightly Dig. pt. 2, p. 2528), Minnesota (1 Laws Minn. 1891, § 2973), North Dakota (Laws 1890, p. 253, chap. 74), Wisconsin (1 Rev. Stat. 1898, $$ 19411953), New Jersey (2 Gen. Stat. p. 1766), and Michigan (1 How. Ann. Stat. $$ 4345-4350). Singularly enough the clause in question does not appear to have been the subject of litigation or judicial interpretation in any of these States. It has been construed, however, by the highest courts of Nebraska, Washington, Mississippi, Illinois, Iowa, and Missouri in the following cases: Oakland Home Ins. Co. v. Bank of Commerce, 47 Neb. 717 (66 N. W. 646 [36 L. R. A. 673] 58 Am. St. Rep. 663); Boyd v. Insurance Co., 25 Wash. 447 (65 Pac. 785 [55 L. R. A. 165]); Queen's Ins. Co. v. Building Ass'n, 175 Ill. 115 (51 N. E. 717); Christenson v. Insurance Co., 117 Iowa, 77 (90 N. W. 495 [94 Am. St. Rep. 286]); East v. Insurance Ass'n, 76 Miss. 697 (26 South. 691); Senor v. Insurance Co., 181 Mo. 115 (79 S. W. 687). These decisions all concede that, in the absence of such mortgage clause, the mortgagee takes subject to all the conditions expressed in the body of the policy, but hold, as we have held, . that by virtue of the mortgage clause in the body of the policy the interest of the mortgagee is free from all such conditions, except such as are repeated at the time of the creation of that interest by being at that time again, in substance at least, written upon the policy or attached or appended thereto."
This opinion was signed by four of the justices. The concurring opinion was signed by the other two justices. In it occurs the following:
"If I were entirely free to follow my own notion about the question, my inclination would be to agree with the dissenting opinion of Mr. Justice Anders in Boyd v. Insurance Co., 25 Wash. 453 (65 Pac. 785 [55 L. R. A. 165]), and hold that such clause was not fairly susceptible of the construction claimed by respondent in the case at bar. But this identical clause, which seems to have originated in New York, has become quite common in insurance policies, and has been before a number of courts for interpretation, and its meaning has almost universally been held to
be that none of the forfeiting conditions as against the insured affect the mortgagee, except those which are restated in the 'loss payable clause, and that if there are no such conditions in said last-mentioned clause, the insured can do no act whatever which will in any way affect the right of the mortgagee. It was so expressly held in Oakland Home Ins. Co. v. Bank of Commerce, 47 Neb. 717 (66 N. W. 646 [36 L. R. A. 673] 58 Am. St. Rep. 663); Queen's Ins. Co. v. Building Ass'n, 175 ill. 115 (51 N. E. 717); Christenson v. Insurance Co., 117 Iowa, 77 (90 N. W. 495, 94 Am. St. Rep. 286); East v. Insurance Ass'n, 76 Miss. 697 (26 South. 691); Senor v. Insurance Co., 181 Mo. 104 (79 S. W. 687); and Boyd v. Insurance Co., 25 Wash. 447 (65 Pac. 785 [55 L. R. A. 165])."
To the same effect are the following cases: Oakland Home Ins. Co. v. Bank of Commerce, 47 Neb. 717 (66 N. W. 646, 36 L. R. A. 673, 58 Am. St. Rep. 663), decided in 1896; Queen's Ins. Co. v. Building Ass'n, 175 Ill. 115 (51 N. E. 717), decided in 1898; Christenson v. Insurance Co., 117 Iowa, 77 (90 N. W. 495, 94 Am. St. Rep. 286), decided in 1902; Senor v. Insurance Co., 181 Mo. 104 (65 Pac. 785, 55 L. R. A. 165), decided in 1903.
In 1905 our legislature made provision for the adoption and use of a standard form of fire insurance policy. See Act No. 277, Public Acts of 1905, p. 423. This standard policy has the following clause:
"If, with the consent of this company, an interest under this policy shall exist in favor of a mortgagee or of any person or corporation having an interest in the subject of insurance other than the interest of the insured as described herein, the conditions hereinbefore contained shall apply in the manner expressed, in such provisions and conditions of insurance relating to such interest as shall be written upon, attached or appended hereto."
It will be observed that this is the same language which was construed in Welch v. Assurance Co., supra.
It is a familiar rule that, where one State passes a statute then existing in another State which has been construed, courts will presume that the legislature recognized the construction placed upon the statute by the courts of the State from which it was taken, and accepted such construction. State v. Holmes, 115 Mich. 456 (73 N. W. 548); Stellwagen v. Wayne Probate Judge, 130 Mich. 166 (89 N. W. 728).
We, then, have a case where, with the consent of the defendant, on October 21, 1911, the plaintiffs acquired an interest under this policy, both as vendors of the real property and as mortgagees of the personal property described and mentioned therein, and that there was then indorsed upon said policy the following clause:
"It is understood and agreed that M. S. Harkness holds this property under contract of purchase, loss, if any, payable to Joseph G. Gourlay and Mary L. Gourlay and M. S. Harkness as their respective interests may appear.”
There is nothing "written upon, attached or appended” to said clause expressing the manner, or stating in any way that the conditions contained in said policy as to a forfeiture thereof in case of a change of interest or title of the insured shall apply to the interests of the plaintiffs in the policy.
We think the trial judge was right in overruling the demurrer.
The case should be remanded, with costs, and defendant given the usual time to plead.
BROOKE and KUHN, JJ., concurred with MOORE, J. BIRD, J., concurred in the result.
OSTRANDER, J. The universal custom of insuring property against loss by fire and the enforced use in this State of a standard form of fire insurance contract render all judicial interpretations and constructions of the prescribed terms of the contract of more