Welch v. British American Etc. Co. , 148 Cal. 223 ( 1905 )

I concur in the judgment of affirmance. I have reached this conclusion after a great deal of consideration of the main question involved, and have done so mainly in deference to the opinions of judges and decisions of courts in other jurisdictions. The fire-insurance policy involved here was issued by appellant to one Barrett. It was to be void if Barrett violated certain named conditions. Barrett did violate one of those conditions, and as to him the policy became void. But after the issuance of the policy Barrett mortgaged the insured property to the plaintiff herein, George D. Welch, and afterwards the appellant, at the request of Barrett, attached to the policy a writing, in these words: "Loss, if any, payable to George D. Welch as his interest may appear." These words, considered alone, did not change the policy. Barrett still remained the insured party, and in case of fire Welch was to recover only what was due Barrett, and could recover nothing if the latter had forfeited the policy. The above proposition is admitted upon all hands. But it is contended that Welch can recover, notwithstanding the policy is void as to Barrett, on account of a clause in the body of the policy, which, leaving out the parts immaterial here, is as follows: "If . . . an interest . . . shall exist in favor of a mortgagee, . . . 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 thereto." This language seems to me to be as awkward and as difficult to put any meaning into as any that has come under my observation in judicial investigations. If an insurer intends that when he inserts a clause into the policy that the loss, if any, shall be payable to the mortgagee, the mortgagee is to be relieved from the effect of any act of the insured mortgagor which would invalidate the policy, it is a very simple matter for him to say so.

It is contended that he does say so by the mongrel clause above quoted. 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. Thuringia Ins. Co.,25 Wn. 453, [65 P. 785], 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 inOakland Home Ins. Co. v. Bank of Commerce, 47 Neb. 17, [66 N.W. 646, 58 Am. St. Rep. 663]; Queen's Ins. Co. v. Dearborn Sav.Assn., 175 Ill. 115, [51 N.E. 717]; Christenson v. Fidelity Ins.Co., 117 Iowa, 77, [90 N.W. 495, 94 Am. St. Rep. 286]; East v.New Orleans Ins. Co., 76 Miss. 697, [26 So. 691]; Senor v.Western Fire Ins. Co., 181 Mo. 104, [79 S.W. 687], and Boyd v.Thuringia Ins. Co., 25 Wn. 447, [65 P. 785]. We have been referred to no cases squarely holding the other way, unless, perhaps, it be Franklin Ins. Co. v. Wolf, 23 Ind. App. 594, [54 N.E. 772]. In Oakland Home Ins. Co. v. Bank of Commerce,47 Neb. 17, [66 N.W. 646, 58 Am. St. Rep. 663], the supreme court of Nebraska construes the clause in question as follows: "That is, in order to render the general conditions of the policy applicable to the interests of the mortgagee, there must be written upon, attached, or appended to the policy, relating to the interest of the mortgagee, some provisions or conditions expressing in what manner the conditions of the policy shall be so applicable. Neither in the `loss payable clause' nor otherwise by writing upon, attached to, or appended to the policy was there any provision or condition carrying the conditions of the policy into such clause or rendering them in any manner applicable." And the other cases give it the same construction. And I am disposed to follow those courts rather than rely upon my first impressions, particularly in view of the rule that an ambiguous clause in a policy must be construed against the insurer. And even if there be doubt as to the correctness of this construction, there is some consolation in the thought that an insurer who puts such a nondescript provision into his policy should hardly be heard to object to any kind of construction which any one chooses to give it.

Henshaw, J., and Lorigan, J., concurred.

Rehearing denied.