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THE

244

INSURANCE

LAW JOURNAL.

REPORTS OF DECISIONS

RENDERED IN INSURANCE CASES IN THE FEDERAL COURTS,

AND IN THE STATE SUPREME COURTS.

WALTER S. NICHOLS, Editor.

VOLUME XXIV.

NEW SERIES, VOLUME IV.

NEW YORK:
PUBLISHED BY C. C. HINE,

137 BROADWAY,

1895,

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RENDERED IN INSURANCE CASES, IN THE FEDERAL COURTS, AND IN THE STATE SUPREME COURTS.

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WESTCHESTER FIRE INS. CO., OF NEW YORK, ET AL.

NEW YORK BOWERY FIRE INS. CO. ET AL.

WILLIAMSBURGH CITY FIRE INS. CO. ET AL.

FIRE INS. ASS'N, OF LONDON, ET AL.*

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The policy insuring F., as receiver, was payable to E. as mortgagee, as interest

might appear. It provided that, on payment of any sum to the mortgagee as loss, the company should be subrogated to all his rights, but that such subrogation should not impair the mortgagee's right to recover

his entire claim. Foreclosure had been begun before the fire. Held, That after the fire the sale under such proceedings could be made, and

payment could be exacted of the insurer for any deficiency by the

mortgagee. * Decision rendered, Oct. 9, 1894.

The policy provided that it should not be invalidated as to the mortgagee by

any act of the insurer. Other insurance was procured, without consent, by the receiver, which invalidated this insurance as to him, and in which

mortgagee had no interest. Held, That a provision in the policy, that the insurer was only to be liable in

the proportion which the sum insured bore to the entire amount of insurance held by any parties having an insurable interest, did not prevent the mortgagee from recovering the entire amount of the policy.

A. H. SAWYER, for Appellants.
Watson M. Rogers, for Respondent.

PECKHAM, J. The plaintiff commenced the above action against the corporation defendant upon a policy of fire insurance issued by the company by which plaintiff, as receiver, was insured against loss or damage by fire on certain property situated in Syracuse, and formerly owned by the Screw Company, of that city. The defendant Everson was insured in the same policy as mortgagee, as his mortgage interest might appear. He was joined as defendant, in order that the whole controversy might, as between all the parties, be settled at once. Actions were also commenced against several other insurance companies by the plaintiff, as receive, at the same time, and to recover upon policies covering substantially the same premises. The questions arising affect generally all the insurance companies, although one or two of such questions are not raised in all the policies. The plaintiff failed to recover, and his complaint was dismissed in the courts below because of the violation of provisions in the policies in regard to procuring other insurance without the companies' consent, and, also, because of the plaintiff's permitting foreclosure proceedings to be commenced to foreclose certain mortgages upon the insured premises. The plaintiff has not appealed. The defendant Everson and the corporations defendant served cross answers upon each other, Everson contending th

he should be allowed to recover from the companies, to the extent of his policies, upon his mortgage interest in the premises, while the companies set up several defenses to such claim, which will be noticed hereafter. The cases were referred for trial, and the referee reported in favor of Everson as against the insurance companies, and the judgments were affirmed at the general term of the supreme court, after a slight modification as to the amounts of the recovery, and the insurance companies have appealed to this court.

The only questions to be determined arise between defendant Everson and the companies. By the judgment entered upon the report of the referee it is provided in all cases that the insurance companies, on making payment of the loss, are entitled to be sub

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rogated to the rights of the mortgagee, but such subrogation is not to impair the mortgagee's right to enforce the collection of his claim in full against the principal debtor, nor by means of any collateral security he may hold. This was placed in the judgments in accordance with the reports of the referee.

1. The companies urge that defendant Everson, the mortgagee, having foreclosed the mortgages upon the premises, and sold the same under his judgment of foreclosure and sale subsequent to the time of the fire, has thereby put it out of his power to subrogate them to the rights which he had under the securities beld by him at the time of the fire, and he therefore cannot recover in this action against them. It appears that the Syracuse Screw Company was the original owner of the premises, and it bad given three several mortgages thereon,—one dated August 13, 1881, for $4,500; dated November 3, 1883, for $14,000; another dated June 30, 1885, for $10,000. The defendant Everson, on the 9th day of June, 1888, was the owner of all of these mortgages, and on that day commenced one action against the screw company to foreclose them. On the 23d of June, 1888, the screw company was dissolved, and Eddy was appointed the receiver. The company was wholly insolvent, and had no property other than the mortgaged premises. In July, 1888, Eddy, as receiver, duly appeared in the foreclosure action, and served an answer setting up a defense to the $10,000 mortgage. On the 4th of December, 1888, a fire occurred, by which the property covered by the policies was damaged, and appraisers were appointed on the 18th of December, and on the 21st of December, 1888, they made their award, by which they determined the damage resulting to the property from the fire to have been $10,102.90. The companies refused to pay Eddy, on the grounds already stated. Everson severed his foreclosure action after Eddy put in his answer setting up a defense as to one of the mortgages, and on the 17th of December, 1888, obtained judgment by default for the foreclosure of the $4,500 and $14,000 mortgages, and decreeing a sale of the premises in satisfaction thereof. Subsequent to the fire, and on the 9th of January, 1889, the property was sold under the foreclosure judgment for the sum of $15,400, leaving a deficiency on those two mortgages, including interest and costs, of $4,921.86.

Each of the policies of insurance had a provision therein known as the “New York Standard Mortgage Clause," and under it the loss, if any, was made payable to defendant Everson, as his mortgage interest might appear. The clause contained a provision that the insurance of Everson's interest should not be invalidated by any act or neglect of the mortgagor or owner of the property, nor by any

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