Lee v. United States Fire Insurance

FINCH, P. J.

Judgment was rendered requiring the defendant United States Fire Insurance Company to convey certain real property to plaintiff C. W. Carey upon payment by the latter of the indebtedness found to be due the company from Carey.

The company issued its policy to Carey insuring the dwelling-house on the property against loss by fire in the sum of $2,000. At that time the property was encumbered by a trust deed securing the payment to Charlotte E. Miot of an indebtedness due her from Carey of $2,500. The policy made the loss, if any, payable to Mrs. Miot as her interest might appear and provided that, as to her, the insurance should not be invalidated by any act or neglect of Carey. After the issuance of the policy Carey and his wife deeded the property to plaintiff J. F. Lee. Thereafter the dwelling-house was totally destroyed by fire. Mrs. Miot made proof of loss and the company paid her the full amount of the insurance and, took an assignment from her of the trust deed and the indebtedness secured thereby to the extent of $2,000, and later paid her the remainder due her from Carey and took an assignment of the whole indebtedness. The company then demanded of Carey the payment of the whole indebtedness which the trust deed was given to secure and, on his failure to make payment thereof, caused the trustee to give notice of sale of the property. Thereupon the plaintiffs commenced this action and caused summons to be duly served upon defendants. After such service the trustee sold the property to the- company for the sum of $3,220.50, the whole amount of the original indebtedness, with interest, costs, and attorney fees. The court gave judgment requiring the company to convey the property to Carey upon his payment of the amount due

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under the trust deed, after crediting him with the $2,000 for which the dwelling-house was insured. The court found that Carey did not offer to pay the company the amount so found due prior to suit, but that such an offer would have been unavailing.

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Appellants contend that by the deed from Carey to Lee “there was a change in the title and interest of the insured in violation of the provisions of its policy, which precluded him from making any recovery thereon.” The policy provided that “this entire policy shall be void . . . if the interest of the insured be other than unconditional and sole ownership.” .Respondents meet this contention with the claim that the deed was given to Lee only as' security for money loaned by him to Carey. Lee testified: “Mr. Carey was sick a couple of years . . . and he had to have an operation performed on him, and he had to be sent to San Francisco to the hospital, and he didn’t have any money, and he deeded this land to me in lieu, as security, and if I had a show to sell the land, I was to sell it and pay Mrs. Miot, the mortgagor, and myself, and if there was any left after that, why I was to give it to his wife,” and that he loaned the money to Carey. The Careys kept possession of the property and had the full use and control thereof. Carey testified to the same effect as- Lee and further: “I never made any note because I had been in the habit of getting money from him any time I wanted it; I never did give him a note for security, and I told him I would, being they had raised me since I was three years old, and I guess they figured they didn’t need a note”; that he always did business with them “that way, . . . any time I needed any money, I always went over and got it”; that Mrs. Lee is his aunt. There is no evidence that Carey expressly promised to repay Lee the money loaned him, but the- law implies such a promise.