Glens Falls Insurance v. Porter , 44 Fla. 568 ( 1902 )

Per Curiam

(after stating the facts.)

This cause being reached for final adjudication, was re-who report the same recommending reversal. After due-consideration the court has prepared the following opinion:

The errors assigned are as follows: 1. The court erred' in overruling the demurrer of defendant to the declaration.

2. The court erred in granting the motion of plaintiff for entry of default filed at chambers July 16th, 1897.

3. The clerk of said court was not authorized by law to enter the final judgment he entered in said cause.

4. The clerk was without authority to entertain or consider the evidence produced.

The plaintiff in this case was a mortgagee of the insured premises, to whom the policy of insurance sued upon was made payable by a regular mortgage clause contained therein, and as such mortgagee, by virtue of such mortgage clause, she'brought the suit.

The propriety of the rulings assigned as the first and second errors, vis: (1) The overruling of the defendant’s demurrer, to the declaration, and (2) the granting of the plaintiff’s motion for entry of default notwithstanding the presence on file of seven pleas interposed by the defendant, hang upon the proper interpretation of the, mortgage clause contained in the policy sued upon, and the rights of the mortgagee plaintiff thereunder. In the leading ease upon the subject, Hastings ct at v. Westchester Fire Insurance Co., 78 N. Y. 141, it is held that “by the terms of the mortgage clause attached to the policy the defendant agreed that the insurance, as to the interest of 'the mortgagee only, should not be invalidated by any act or neglect of the mortgagor or owner of the property insured, nor by the occupation of the premises for purposes more hazardous than were permitted by the policy. But it was further agreed, in substance, that if the defendant should pay the mortgagee any loss, for which it would not be liable to the mortgagor, it should be subrogated to the rights of the mortgagee under all securities for the mortgage debt, or it might pay the amount due oñ Hie mortgage and'take an assignment thereof. * * * The intent of this clause was, that in case by reason of any act of the mortgagors or owners, the company should have a defense against any claim on their part foe a loss, the policy should nevertheless protect the interest of the mortgagees, and operate as an independent insurance of that interest, and indemnify them against loss re-suiting froin fire, without regard to tfie rights of the mortgagors under the policy; and, to effectuate that intention, we .should hold that, as against the mortgagees, the defendant can not set up any defense based upon any act or neglect of the mortgagors, whether committed before or after the issuing of the policy, or the making of the agreement between the company and the mortgagees. * * * The intent of the clause was to make the policy operate as an insurance of 'the mortgagors and the mortgagees separately, and to give the mortgagees the same benefit as if they had taken out a separate policy, free from the conditions imposed upon the owners, making the mortgagees responsible only for their own acts. It established a pi’ivity between the company and the mortgagees, and provided that, notwithstanding that the insurance might* be invalidated as to the mortgagors, it should, nevertheless, protect the mortgagees; and, as a consideration for this undertaking it Whs stipulated that in case the company should be called upon to pay the mortgagees, under circumstances which discharged it from liability to the mortgagors, it should be indemnified by subrogation, or an assignment of the mortgage and all securities held by the mortgagees for the mortgage debt. This provision, in case the policy were invalidated as to the mortgagors, made it, in substance, an insurance solely of the interest of the mortgagees, by direct contract with them, unaffected by any questions which might exist between the company and the mortgagors.” Eddy v. London Assur. Corp., 143 N. Y. 311, 38 N. E. Rep. 307; Meriden Savings Bank v. Home Mutual Fire Ins. Co., 50 Conn. 396; Syndicate Ins. Co. v. Bohn, 65 Fed. Rep. 165, S. C. 12 C. C. A. 531; Hartford Fire Ins. Co. v. Olcott, 97 Ill. 439; Palmer Sav. Bank v. Insurance Company of North America, 166 Mass. 189, 44 N. E. Rep. 211; Westchester Fire Ins. Co. v. Coverdale, 48 Kan. 446, 29 Pac. Rep. 682;. Oakland Home Ins. Co. v. Bank of Commerce, 47 Neb. 717, 66 N. W. Rep. 292; Dwelling House Ins. Co. v. Kansas Loan & Trust Co. 5 Kan. App. 137, 48 Pac. Rep. 891. In the case last cited it is held that under the mortgage clause the mortgagee was not bound to make proof of loss.; that the policy imposed that duty upon the owner, and the mortgage clause freed the mortgagee from the-consequences of the owner's neglect. To the same effect is-the case of Queen Ins. Co. v. Dearborn Savings, Loan & Building Ass’n., 175 Ill. 115, 51 N. E. Rep. 717, S. C. 75 Ill. App. 371. From the authorities cited and others that we have read we have come to the conclusion that while the standard or union mortgage clause in a policy of insurance does not create in favor of the mortgagee a contract wholly- independent, separate and distinct from '-that created by such policy in favor of the mortgagor or owner, yet that such mortgage clause does give to the-mortgagee such a separate and independent contractual status towards the insurer as that he can recover the amount provided by the policy under circumstances and conditions that would defeat a recovery by the mortgagor or owner. By the express terms of such mortgage clause the insurer agrees that as to the interest of "the mortgagee the insurance effected by the policy in his favor should not be invalidated by any act or neglect of the mortgagor or owner-of the property insured. We think the “acts or neglects of the mortgagor or owner” from -the forfeiting consequences of which the mortgagee’s rights and interests are exempted contemplates any act of commission or omission on the part of the mortgagor or owner that might forfeit the policy so far as such mortgagor or owner is concerned, that occur subsequently to the execution of such mortgage clause. The insurer is. indemnified for its-practically unconditioned guaranty to the mortgagee by the further provision in the mortgage clause giving it the right to subrogation to the rights of the mortgagee in his mortgage security in the event the insurer has to pay the policy to the mortgagee under circumstances where the mortgagor or owner had by some act -or neglect forfeited his right to such insurance. And we agree with those authorities that hold that unless the mortgage clause expressly makes it obligatory on the mortgagee to furnish proofs of loss, that he is not required to furnish such proofs .as a condition precedent to his right of action on the policy; and that the failure of the mortgagor or owner to furnish such proofs of loss, either wholly or within th# time stipulated in the policy, constitutes one of the neglects from the invalidating consequences of which the-mortgagee is exempted. The mortgagee is ordinarily in no-better position to furnish proofs of loss than the insurer;- and that would be sufficient proof of loss to establish the insurer’s liability so far as such mortgagee was concerted', might affirmatively show the non-liability of the insurer-to the mortgagor or owner. The declaration in this case besides alleging amply enough to make out the mortgagee’s right of action against the insurer defendant, also-alleges a mass of matter not material or relevant to herrase as an assured mortgagee under the mortgage clause,, but this, surplusage in allegation did not render the declaration subject to demurrer.

The contentions of fhe defendant’s demurrer to the-declaration, to the effect that it is bad because it fails to aver the immediate giving of notice of loss by fire by the assured, and because it fails to allege the giving of notice and proofs of loss by the assured within sixty days after the fire as provided by the policy, and because it fails to allege, that the imprisonment of the assured, set up in the declaration as an excuse for his failure to make proofs of loss within sixty days after the fire was without due process of.law or that the .defendant caused said imprisonment, all relate to matters that are irrelevant and immaterial to the mortgagee plaintiff’s right to recover under the mortgage clause in the policy sued upon, and relate to omissions on the part of the mortgagor or1 owner from the' invalidating consequences of which such mortgagee is by said mortgage clause exempted; and the failure of the mortgagee’s declaration to either mention them at all or to confess and avoid them furnishes no ground of demurrer to such declaration. The fourth ground of the demurrer, to the effect that the declaration is bad “because it does not aver generally that the plaintiff had observed and performed all and singular the conditions by her to be observed and performed; but, on the contrary, excepts from said averment such conditions as are possible to be performed or hereby waived, or which defendant became by its conduct estopped to require performance of. by which qualified averment it is sought to submit to the jury, as a said averment such conditions as are impossible to be performed; what as matter of fact constitutes a waiver, and what as matter of fact constitutes an estoppel,” is under the circumstances of this case untenable. Under the mortgage clause of the policy sued upon the only conditions expressly stipulated to be performed by the mortgagee are that the mortgagee should on demand pay any premium due on said policy in the event of the neglect of the mortgagor or owner to pay the same, and further that .the mortgagee should notify the insurer of any change of ownership or occupancy or increase of hazard which should come to the knowledge of the mortgagee, and should on demand pay the premium for such increased hazard for the term of the use thereof. The declaration shows affirmatively that the only premium due upon the policy sued upon was paid by .the assured, and that the property was destroyed before the expiration of the term of insurance for which such payment was made, so that it is expressly shown that the condition in the mortgage clause calling for the payment by the mortgagee of any premium due and neglected by the mortgagor or owner had not arisen and did not exist. The declaration, except a transfer, the sanction of which by the insurer was endorsed on the policy, nowhere shows that there was any change of ownership or occupancy or increase of hazard that came to the knowledge of the mortgagee, of which she was bound to notify the insurer under the mortgage clause, and if there existed any such knowledge on the part of the mortgagee there is nothing in the terms of the policy that makes its disclosure by allegation in the declaration at all necessary to the plaintiff mortgagee’s right to recover, or that makes it necessary to negative in the declaration the existence of knowledge by such mortgagee of any such change of ownership or occupancy or increase of hazard, but if such change of ownership or occupancy or increase of hazard in fact existed and was known to the mortgagee and she failed to notify the insurer thereof, or failed to pay any increase of hazard premium on demand as provided for in the mortgage clause, it was matter proper to be affirmatively urged by the defendant as matter of defense for such advantage, if any, as it might afford as a defense, but was not c"«essary to be alleged or negatived in the declaration. The allegation made in the declaration, therefore, of compliance by the plaintiff mortgagee with all conditions upon her part-to be performed, under the circumstances shown by this declaration, was immaterial, surplusage and does not render the declaration subject to demurrer. - There was, therefore, no error in overruling the demurrer to the declaration.

The matters set up' in all the pleas filed by the defendant were wholly irrelevant and immaterial to the plaintiff’s case as mortgagee under her mortgage clause, and tendered no material issue that was legally available as a defense against the mortgagee under her mortgage clause, and denied nothing essential to the plaintiff mortgagee’s right to recover, as alleged in her declaration. The court, therefore, committed no error in ignoring such pleas, and in granting the plaintiff’s motion for judgment by default notwithstanding the presence of such pleas upon the files.

The third and fourth errors assigned, to the effect that the clerk of the Circuit Court was without authority to enter the final judgment entered by him in said cause, and had no authority to entertain the evidence produced upon which it was predicated, are well taken. It is settled here that the authority of the clerk of the Circuit Court to enter, final judgments consequent upon defaults is derived entirely from the statute, and the statute must be strictly pursued. Blount v. Gallaher, 22 Fla. 92; Snell v. Irvine, 17 Fla. 234; Coons v. Harllee, 17 Fla. 484; Ropes v. Snyder Harris Bassett Co. 37 Fla. 529, 20 South. Rep. 535. The statute, section 1035, Revised Statutes, that gives authority to clerks to enter final judgments, contemplates that the clerk can enter a final judgment after default only in those cases where the cause of action is purely and simply a money demand founded upon a contract for the payment of money only. In cases where extrinsic evidence dollars the contract sued upon is necessary to ascertain the amount to be recovered the clerk has no authority to entertain such evidence or to . found a' final judgment thereon.

The final judgment entered by the clerk 'is reversed and set aside with directions for submission of the cause to a jury for the assessment of the plaintiff’s damages, the defendant in error to be taxed with the costs of the writ of error proceedings.