{ "id": 2221531, "name": "C. M. BUCKNER v. UNITED STATES FIRE INSURANCE COMPANY and THE FEDERAL LAND BANK OF COLUMBIA, COLUMBIA, S. C.", "name_abbreviation": "Buckner v. United States Fire Insurance", "decision_date": "1936-03-18", "docket_number": "", "first_page": "640", "last_page": "647", "citations": [ { "type": "official", "cite": "209 N.C. 640" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "132 N. C., 75", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8657471 ], "opinion_index": 0, "case_paths": [ "/nc/132/0075-01" ] }, { "cite": "179 N. C., 255", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8655616 ], "opinion_index": 0, "case_paths": [ "/nc/179/0255-01" ] }, { "cite": "171 N. C., 290", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11270023 ], "opinion_index": 0, "case_paths": [ "/nc/171/0290-01" ] }, { "cite": "165 N. C., 136", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8657913 ], "opinion_index": 0, "case_paths": [ "/nc/165/0136-01" ] }, { "cite": "139 N. C., 427", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8652788 ], "opinion_index": 0, "case_paths": [ "/nc/139/0427-01" ] }, { "cite": "61 S. E., 672", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "148 N. C., 169", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11269489, 11269511 ], "opinion_index": 0, "case_paths": [ "/nc/148/0169-01", "/nc/148/0169-02" ] }, { "cite": "121 S. E., 37", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "145 S. E., 616", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "196 N. C., 335", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8626688 ], "opinion_index": 0, "case_paths": [ "/nc/196/0335-01" ] }, { "cite": "147 S. E., 812", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "197 N. C., 139", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8627572 ], "opinion_index": 0, "case_paths": [ "/nc/197/0139-01" ] }, { "cite": "201 N. C., 362", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8625388 ], "opinion_index": 0, "case_paths": [ "/nc/201/0362-01" ] }, { "cite": "207 N. C., 43", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8622290 ], "opinion_index": 0, "case_paths": [ "/nc/207/0043-01" ] }, { "cite": "205 N. C., 692", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8630968 ], "opinion_index": 0, "case_paths": [ "/nc/205/0692-01" ] }, { "cite": "203 N. C., 669", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8618223 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nc/203/0669-01" ] }, { "cite": "188 N. C., 747", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8654904 ], "opinion_index": 0, "case_paths": [ "/nc/188/0747-01" ] }, { "cite": "187 N. C., 97", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8653329 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nc/187/0097-01" ] } ], "analysis": { "cardinality": 737, "char_count": 20247, "ocr_confidence": 0.479, "pagerank": { "raw": 6.535114437070783e-08, "percentile": 0.4009081224426598 }, "sha256": "2344e30216d4730c088c85c5733f81a0d75fd9636b8a0afe983aa1df568fbaf1", "simhash": "1:ad11e66ec39f8f18", "word_count": 3513 }, "last_updated": "2023-07-14T22:34:31.527681+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "C. M. BUCKNER v. UNITED STATES FIRE INSURANCE COMPANY and THE FEDERAL LAND BANK OF COLUMBIA, COLUMBIA, S. C." ], "opinions": [ { "text": "Clarkson, J.\nThe question involved: Is the plaintiff mortgagor, in ,an independent action, under mortgagee loss clause, entitled to have the sum of $2,292.45 fire loss paid by defendant Insurance Company to defendant Land Bank, under the policy of insurance in defendant Insurance Company, credited upon his indebtedness of $3,972.33, due as of 1 April, 1935, to defendant Land Bank? We think so, under the facts and circumstances of this case.\nThe prayer of plaintiff is as follows: \u201c(1) That the defendant U. S. Eire Insurance Company he required to cancel and deliver any agreement it may have entered into by it and its codefendant Federal Land Bank of Columbia, attempting to assign any interest of the plaintiff in his notes and his farm given as security for the same; (2) that the Federal Land Bank of Columbia be required to credit the principal sum of the note of the plaintiff described in the deed of trust in the amount of $2,292.45, as of the date of 28 November, 1933; (3) for such other and further relief as the plaintiff may be entitled herein.\u201d\nIn Bank v. Insurance Co., 187 N. C., 97 (102), citing a wealth of authorities, it is said: \u201cWith respect to the rights of the mortgagee under the standard mortgage clause, it is the generally accepted position that this clause operates as a separate and distinct insurance of the mortgagee\u2019s interest, to the extent, at least, of not being invalidated by any act or omission on the part of the owner or mortgagor, unknown to the mortgagee; and, according to the clear weight of authority, this affords protection against previous acts as well as subsequent acts of the assured.\u201d S. c., 188 N. C., 747 (751) ; Bank v. Insurance Assn. (Hager case), 203 N. C., 669; Mahler v. Ins. Co., 205 N. C., 692; Stockton v. Ins. Co., 207 N. C., 43.\nThis is an independent civil action, instituted in the Superior Court of Buncombe County, 8 September, 1934, wherein the plaintiff mortgagor seeks to have the fire loss under the policy of insurance paid by the defendant Insurance Company to its eodefendant, the Land Bank, credited upon his notes given to the defendant Land Bank.\nIn the policy issued by defendant Insurance Company is the following: \u201cDoes insure the Federal Land Bank of Columbia and legal representatives, to the extent of the actual cash value (ascertained with proper deductions for depreciation) of the property at the time of loss or damage, but not exceeding the amount which it would cost to repair or replace the same with material of like kind and quality within a reasonable time after such loss or damage,\u201d etc.\nUnder the contract plaintiff elected that the $2,292.45 be credited on his deeds of trust to the Land Bank, and brought this action for that purpose. The property burned was considered by plaintiff to be worth far above the appraisal. The total sound value by the appraisers was fixed at $3,675.58. The premium paid was $48.60 a year for amount of insurance. From the record we are unable to understand by what legerdemain the Insurance Company paid the Land Bank only $2,292.45 under the insurance contract \u2014 which was for $2,700 in case of loss. We will pass over the questions of waiver and breach of contract on the part of defendant Insurance Company. It may be noted that plaintiff accepted the reduced amount and elected to sue and have the amount credited on his deeds of trust. We will consider the right on the part of the Insurance Company to set up the subrogated receipt. There is one thing fatal to the Insurance Company\u2019s defense \u2014 it relies on the form of Standard Policy, N. C. Code, 1935 (Michie), sec. 6437.\nIn Johnson v. Ins. Co., 201 N. C., 362 (363-4), it is said: \u201cThese stipulations and provisions are included in the policies by virtue of statutory requirements, and are valid in all respects. Midkiff v. Ins. Co., 197 N. C., 139, 147 S. E., 812; Greene v. Ins. Co., 196 N. C., 335, 145 S. E., 616; Bank v. Ins. Co., 187 N. C., 97, 121 S. E., 37; Black v. Ins. Co., 148 N. C., 169, 61 S. E., 672. In the last cited case, referring to the stipulations and provisions included in a policy of fire insurance, as required by C. S., 6437, it is said: 'They are inserted in the policy, not by the company or by the plaintiff, but by the statute. To fail to give them force and effect is to nullify the statute.\u2019 These stipulations and provisions are included in the policies, and unless waived as provided therein, must and will be enforced.\u201d\nA provision in the policy of defendant Insurance Company is as follows : \u201cIt is understood and agreed where the printed conditions of this policy are in conflict with the conditions of the standard fire and lightning policy of any State or territory where this contract is to be performed, then and in that event the standard policy of such State or territory shall control and govern the construction of the printed portion of this policy,\u201d etc.\nThe only subrogation clause we can find in the Form of Standard Policy, in section 6437, supra, is the following: \u201cSubrogation \u2014 This company may require from the insured an assignment of all right of recovery against any party for loss or damage to the extent that payment therefor is made by this company.\u201d This has been held to be an equitable right independent of the statute. Cunningham v. R. R., 139 N. C., 427 (434).\nThe defendant Insurance Company has put in the policy a new right, contrary to the standard policy. We do not think under the terms of its policy or on any equitable principle that its subrogation receipt is valid or binding on plaintiff on the facts and circumstances of this case.\nThe policy period contended by defendant Insurance Company for bringing this action does not apply on this record. This is an independent action, brought by plaintiff against the Land Bank to have the amount of insurance paid it by the Insurance Company credited on its deeds of trust, in accordance with his contract with the Land Bank. This action was brought immediately when plaintiff found that this had not been done.\nOn this record the exclusion of evidence on the part of the Insurance Company by the court below is not material.\nThe plaintiff, by the amount being tacked, on to his debt, under his contract with the Land Bank, paid the insurance policy. The plaintiff had no notice of this new right of subrogation put in the policy by the Insurance Company \u2014 contrary to the statute \u2014 as the policy was left with the Land Bank. The Land Bank\u2019s interest in the policy, under its contract with plaintiff, is the \u201closs, if any, to be payable to Federal Land Bank of Columbia, as its interest may appear at the time of the loss.\u201d\nIn Richards on the Law of Insurance (4th Ed.), p. 75, part sec. 52, is the following: \u201cA corollary incident to the doctrine of indemnity is the right of subrogation. Upon paying the loss under a fire or marine policy, the insurer becomes subrogated pro tanto to such rights and remedies as the insured may have against third persons who are primarily liable to him for his damage sustained. The person who has caused the loss is said to (be) the one primarily liable.\u201d\nThis is the right given the Insurance Company under section 6437, supra \u2014 \u201cSubrogation.\u201d An insurer, on paying a loss, is subrogated to the insured\u2019s claim against the wrongdoer causing the loss. Cunningham, & Hinshaw v. S. A. L. Ry. Co., supra; Fidelity Ins. Co. v. A. C. L. R. Co., 165 N. C., 136; Powell & Powell v. Wake Water Co., 171 N. C., 290; Lumbermen\u2019s Mut. Ins. Co. v. Sou. Ry. Co., 179 N. C., 255.\nN. C. Code, 1935 (Michie), sec. 446, provides that all actions must be prosecuted in the name of the real party in interest. \u201cBut this section does not authorize the assignment of a thing in action not arising out' of contract.\u201d Held, that if the exception in the section operated to prevent a fire insurance company, on paying a loss, from suing the one whose negligence caused the loss, it was repealed by Laws 1899, ch. 54, sec. 43, which provides that the insurance company should be subrogated, to the extent of the payment by it, to all right of recovery by assured. Hamburg-Bremen Fire Ins. Co. v. A. C. L. R. Co., 132 N. C., 75. See subrogation clause now in the Standard Policy, sec. 6437, supra.\n\u201cBut where the mortgagor has any interest in the policy, either by payment of premiums or by agreement with the mortgagee, then there will be no subrogation in favor of the insurers, for the latter takes only such rights as the assured can give.\u201d Richards, supra, p. 80, part sec. 53.\nFire insurer paying insurance to mortgagee under mortgage clause held not entitled to be subrogated pro tanto to right of mortgagee against insured mortgagors. Atlantic Joint Stock Land Bank of Raleigh v. Farmers Mut. Fire Ins. Assn. of N. C., 203 N. C., 669 (Hager case).\nWe see no error in the charge. On the entire record we see no prejudicial or reversible error.\nNo error.", "type": "majority", "author": "Clarkson, J." } ], "attorneys": [ "W. E. McLean, Max E. Ramsey, and J. W. Haynes for plaintiff.", "R. R. Williams for United Slates Fire Insurance Company." ], "corrections": "", "head_matter": "C. M. BUCKNER v. UNITED STATES FIRE INSURANCE COMPANY and THE FEDERAL LAND BANK OF COLUMBIA, COLUMBIA, S. C.\n(Filed 18 March, 1936.)\n1. Insurance O a \u2014 Insurer paying mortgagee under provisions of mortgage clause held not entitled to subrogation against mortgagor.\nDefendant insurer denied liability to the owner mortgagor of the property because of alleged breach of the arbitration clause of the policy, but paid a sum agreed upon to the mortgagee in discharge of its liability to tbe mortgagee under tbe standard mortgage clause. Under provisions of the policy, insurer took from the mortgagee an agreement subrogating insurer for the amount paid, and assigning to insurer a proportionate part of the mortgage debt. The mortgagor brought this action to have the amount paid to the mortgagee applied on the debt and to have the subrogation agreement between the mortgagee and insurer canceled. Held: Agreements in the policy contrary to statutory provisions are void, and the only statutory provision relating to subrogation, N. C. Code, 6437, does not provide that insurer should be subrogated to rights of the mortgagee against mortgagor, and under the facts of this case insurer is not entitled to the subrogation claimed upon any equitable principle, and insurer\u2019s subrogation receipt from the mortgagee is not valid or binding as against the owner mortgagor.\n2. Insurance P c \u2014 Provision of policy providing time within which action should he brought held not applicable to this action.\nInsurer denied liability to the owner mortgagor, but paid a sum agreed to the mortgagee in discharge of its liability under the standard mortgage clause of the policy, and took from mortgagee a subrogation receipt as against the owner mortgagor. The owner mortgagor brought this action to have the sum paid applied to the mortgage debt and to have the subrogation agreement canceled. Held,: The provision of the policy prescribing the time within which action on the policy must be brought has no application, plaintiffs action being an independent action to have the proceeds of the policy applied upon the debt under the provision of the policy giving him the right to direct such application of the proceeds.\n3. Insurance O a\u2014\nUpon paying the loss by fire, insurer is entitled to subrogation to the rights of insured against the third person tort-feasor causing the loss, to the extent of the amount paid, both by provision of statute, N. O. Code, 6437, and under equitable principles.\nAppeal by defendant U. S. Fire Insurance Company from Oglesby, J., and a jury, at Regular December Term, 1935, of Buncombe.\nNo error.\nThis was a civil action, tried before bis Honor, John M. Oglesby, judge presiding, and a jury, at tbe Regular December, 1935, Term for tbe trial of civil cases in tbe Superior Court for tbe county of Buncombe, State of North Carolina. Tbe plaintiff commenced tbis action against tbe defendant United States Fire Insurance Company and tbe Federal Land Bank to bave credited $2,292.45 on notes executed by tbe plaintiff to tbe Federal Land Bank of Columbia, secured by deeds of trust, wbicb amount of said notes tbe defendant United States Fire Insurance Company claimed bad been assigned to it by way of subrogation.\nTbe United States Fire Insurance Company will hereafter be abbreviated \u201cInsurance Company,\u201d and tbe Federal Land Bank of Columbia, S. 0., abbreviated \u201cLand Bank.\u201d\nO. M. Buckner was tbe owner and seized in fee simple of 40.57 acres of land in Black Mountain, Buncombe County, N. C. Situated on tbe land was a big house' \u2014 two and a half story building. Plaintiff made two notes, secured by deeds of trust on said property for the benefit of the defendant Land Bank \u2014 one 31 December, 1926, for the sum of $2,500, and one on 29 September, 1928, for the sum of $900.00. There is due on same, including principal, interest, and advances as of 1 April, 1935, $3,972.33.\nTerms of the deeds of trust were: \u201cIt is covenanted by and between the said parties of the first part, their heirs, executors, or administrators, to insure and to keep insured to the satisfaction of the Federal Land Bank of Columbia all the buildings and improvements now on said premises, the value of which was a factor in determining the amount of the loan secured hereby, against loss or damage by fire or windstorm in such sum or sums as may be required by the Federal Land Bank of Columbia, and in such company or companies as may be approved by the Federal Land Bank of Columbia, its successors or assigns, the loss, if any, to be payable to Federal Land Bank of Columbia as its interest may appear at the time of the loss, and will deliver said policy or policies of insurance to the Federal Land Bank of Columbia, and will promptly pay when due all premiums for such insurance. In case any insured buildings or improvements on said premises are destroyed or damaged by fire or windstorm, the sum or sums collected from said insurance may, at the option of the said parties of the first pari, be applied either to the payment of the note secured by this mortgage, or, subject to the regulations of the Farm Loan Board, and under the direction of the Federal Land Bank of Columbia, to the reconstruction of the buildings or improvements so destroyed or damaged. . . . (3) And\nit is further covenanted that if the said parties of the first part, their heirs, executors, administrators, or assigns, shall fail to procure and maintain said insurance, or if after procuring the same shall fail to pay the premium charged therefor, or shall fail to pay said taxes, liens, judgments, or assessments as herein agreed, then the Federal Land Barde of Columbia, its successors or assigns, may effect said insurance and pay the premium thereon, as well as any unpaid premiums for an insurance policy procured and deposited by the party of the first part with the party of the second part under the provisions of section 1 hereof, and may also pay said taxes, liens, judgments, or assessments, and the money so advanced for the payment of such insurance premiums, taxes, liens, judgments, or assessments, shall be added to the mortgage debt and become a part thereof and the repayment of the same, with simple interest at the rate of 6% per annum, from the date of actual payment, and until paid, shall be secured by this mortgage(Italics ours.)\nThe Land Bank, in compliance with the deeds of trust, took out insurance with defendant Insurance Company in the sum of $2,700, on 26 January, 1931, and paid the premium and tacked same to the deed of trust as was provided in same. When the insurance was in full force and effect, on 1 January, 1933, the \u201cbig house\u201d was burned to the ground, salvage being only perhaps $100.00.\nPlaintiff alleges that he \u201cfurnished the proof of the total loss of said dwelling house, insured as aforesaid, to the defendant U. S. Eire Insurance Company and the defendant Federal Land Bank of Columbia, under the terms and conditions of the policy of said fire insurance company, and in the manner and time required for the furnishing of said proof under said policy.\u201d This was admitted by defendant Land Bank, and defendant Insurance Company said: \u201cIt is true that the plaintiff delivered to the defendant a certain paper writing purporting to be a proof of loss on a dwelling house located in Black Mountain Township, Buncombe County, State of North Carolina.\u201d\nThere was a disagreement between plaintiff and the Insurance Company as to the appraisers, at the same time the plaintiff claiming the full amount of the policy- \u2014 $2,700. At the instance of the Land Bank the plaintiff selected as an appraiser C. C. Daugherty and the defendant Insurance Company selected Dion A. Roberts. The Insurance Company knew that Daugherty was the appraiser selected by plaintiff. On 28 November, 1933, the appraisers found the \u201cTotal sound value $3,675.88,\u201d that is the actual cash value of the property when burned and the actual loss and damage by the fire. The defendant Insurance Company paid the defendant Land Bank $2,292.45 and required and took from the Land Bank a \u201csubrogation receipt,\u201d in part: \u201cBy making payment to the bank as mortgagee, under the terms of the memorandum, after denial of liability to the owner, the company has acquired an interest by subrogation in the note and mortgage, but junior in priority and subject in effect to the right of the bank to be first paid the full amount of its mortgage debt, including all advances permitted and authorized to be made by the terms of the mortgage. Unless otherwise ordered and adjudged by a court of competent jurisdiction or disposed of by an agreement and adjustment between the owner and the company, the bank will assign without recourse the note and mortgage to the company when the amount due it has been paid in full, provided that in the meantime the owner has not contested the denial of liability and been sustained therein by the court, in which event the funds will be credited on the remaining unpaid principal of the indebtedness.\u201d\nThe following is in the policy of the defendant Insurance Company: \u201cIt is hereby further understood and agreed that the undersigned company, whenever it shall claim that as to any mortgagor or owner whose property is insured under this policy no liability for any loss exists, or though admitting its liability therefor, it shall dispute the amount thereof as claimed by any mortgagor or owner, will pay to the bank the amount of the loss, the same not to exceed the amount covered by its schedule policy, and thereafter the company will at once be legally subrogated to all the rights of the bank and to all the securities held as collateral to the mortgage debt to the extent of such payment, or at the company\u2019s option it may pay to the bank the whole principal due or to grow due on the mortgage debt, with interest, and shall thereupon receive a full assignment and transfer of the note and mortgage and all other securities held as collateral to the mortgage debt, but no such subrogation shall impair the right of the bank to recover the full amount of its mortgage debt.\u201d\nThe issues submitted to the jury and their answers thereto were as follows:\n\u201c1. Were the premises of the plaintiff C. M. Buckner insured by the defendant United States Eire Insurance Company, for the benefit of the said Buckner and the Federal Land Bank of Columbia, Columbia, S. C., as their separate interests might appear, as alleged in the complaint, and, if so, was said dwelling described in the complaint destroyed by fire, as alleged? Ans.: \u2018Yes.\u2019\n\u201c2. If so, was there an appraisal and award between the Federal Land Bank of Columbia and the defendant United States Eire Insurance Company made in accordance with the terms and provisions of said policy? Ans.: \u2018Yes.\u2019\n\u201c3. What sum, if any, is plaintiff C. M. Buckner entitled to recover of United States Eire Insurance Company and defendant The Federal Land Bank of Columbia? Ans.: \u2018$2,292.45.\u2019\u201d\nThe court below rendered judgment on the verdict. The defendant Land Bank did not appeal. The defendant Insurance Company made numerous exceptions and assignments of error and appealed to the Supreme Court. The material ones and necessary facts will be set forth in the opinion.\nW. E. McLean, Max E. Ramsey, and J. W. Haynes for plaintiff.\nR. R. Williams for United Slates Fire Insurance Company." }, "file_name": "0640-01", "first_page_order": 702, "last_page_order": 709 }