Hartford Fire Ins. Co. v. Green , 148 Miss. 627 ( 1927 )

^* Corpus Juris-Cyc. References: Fire Insurance, 26CJ, p. 457, n. 17; p. 464, n. 85, 88. The suit is to recover against the appellant insurance company for the loss of a house and furniture by fire, under a policy issued to the appellee Mrs. Green, with loss payable clause in favor of the Jackson Building Loan Association to cover a mortgage on the property to secure the payment of about one thousand seven hundred fifty dollars, and the total amount due for the loss was more than the amount due the mortgagee loan company. From a judgment in favor of Mrs. Green and the mortgagee, this appeal is prosecuted.

At the trial, the insurance company pleaded the general issue, and filed a special plea, which is in the following language:

"Comes the defendant, by its attorney, and for a special plea in this behalf, says that the defendant admits that it owes the plaintiff the Building Loan Association, of Jackson, Miss., the said sum of one thousand seven hundred fifty dollars, claimed under said policy for the loss of the building destroyed by fire, and for which this suit was filed, and that said sum is due under the loss payable clause attached to and forming a part of said policy so sued on; that the total amount of said sum due by the said Mrs. Green, for which said loss payable clause protects, to the Building Loan Association, of Jackson, Miss., is one thousand eight hundred seventy-nine dollars; that the total sum due by defendant to said Building Loan Association is one thousand seven hundred fifty dollars, being the full face of said policy, which is less than the interest of said Building Loan Association is made to appear; that the defendant is entitled to have the said rights of the Building Loan Association subrogated to it (this defendant), with all the securities held by it assigned to this defendant. Defendant further makes known to the court in this plea that it is willing for a judgment to be entered for and on behalf of the Building Loan Association, of Jackson, Miss., for the full amount sued for herein, since its interest is made to appear to be more than the amount sued for in this cause; that under the terms of the policy it is entitled to have the rights of said Building Loan Association, of Jackson, Miss., assigned to it and to be subrogated to all the rights of said Building Loan Association; that the said Mrs. Green has no right to recover, since all of her rights are assigned under said mortgage loss payable clause to the Building Loan Association, of Jackson, Miss., and this the defendant is ready to verify.

"T.J. WILLS, Attorney for Defendant."

Issue being joined in the pleadings, the case was tried on its merits. The plaintiffs made out their case by proof, and the defendant offered no testimony, but relied upon a certain provision of the policy to sustain its special plea. The court instructed the jury peremptorily to find for the plaintiff.

The provision of the policy, which is urged by the appellant in support of its special plea, reads as follows:

"Whenever this company shall pay the mortgagee (or trustee) any sum for loss or damage under this policy, and shall claim that, as to the mortgagor or owners, no liability therefor existed, this company shall, to the extent of such payment, be thereupon legally subrogated to all the rights of the party to whom such payment shall be made, under all securities held as collateral to the mortgage debt, or may at its option pay to the mortgagee (or trustee) the whole principal due or to grow due on the mortgage with interest, and shall thereupon receive a full assignment and transfer of the mortgage and of all such other securities; but no subrogation shall impair the right of the mortgagee (or trustee) to recover the full amount of its claim."

As we understand the argument of counsel for appellant, it is contended that the insurance company is entitled to be subrogated to the rights of the Building Loan Association, and that the mortgage be assigned to the insurance company upon its payment of the amount due thereunder to the mortgagee.

It will be observed that the special plea does not allege that the insurance company "claims that, as to the mortgagor or owner, no liability therefor existed;" nor was there any effort made to introduce testimony to show that the owner, Mrs. Green, was not entitled to recover for the loss. Consequently, as there was no plea, nor any proof offered toward the establishment of such a claim that "no liability existed therefor in favor of the mortgagor or owner," as provided in the policy, and relied upon by the appellant herein, the subrogation provision of the policy we think is inapplicable in the case. See section 2596, Code 1906 (section 5854, Hemingway's Code 1927).

The authorities elsewhere seem to universally hold that, whenever the particular provision here involved is invoked in any case in favor of the insurance company, the necessary facts must be pleaded and proven in order to come within the provision. Nothing of that sort was done in the case before us; and to hold that the insured, under such circumstances, should be held liable to the insurance company under the subrogated mortgage clause, would be wholly without reason or justification under the terms of the insurance contract.

The judgment of the lower court is affirmed.

Affirmed.