Atlantic Joint Stock Land Bank of Raleigh v. Farmers Mutual Fire Insurance, 203 N.C. 669 (1932)

Dec. 14, 1932 · Supreme Court of North Carolina

203 N.C. 669

ATLANTIC JOINT STOCK LAND BANK OF RALEIGH, NORTH CAROLINA, v. THE FARMERS MUTUAL FIRE INSURANCE ASSOCIATION OF NORTH CAROLINA, and E. P. HAGER and His Wife, IOLA C. HAGER.

(Filed 14 December, 1932.)

1. Appeal and Error J e — Where correct result has been reached in judgment new trial will not he awarded for alleged errors.

Where one party is not entitled to any recovery against another party to the action on the cause of action alleged, a judgment to this effect will be affirmed on appeal even though there may have been error committed in the trial of the action.

a. Insurance N c — Insurer is liable to mortgagee named in loss payable clause by separate and distinct contract.

The insurer of mortgaged premises is directly liable to the mortgagee under a separate and distinct contract where the policy of insurance contains or has attached thereto a standard loss payable clause in the mortgagee’s favor, and such liability is not dependent upon or determined by the insurer’s liability to the mortgagor.

3. Same — Where mortgagee recovers against insurer on loss payable clause, insurer is not entitled to subrogation as against mortgagor.

Where a mortgagee has recovered judgment against the insurer under a loss payable clause in a policy of fire insurance, the insurer is not entitled to subrogation to the rights of the mortgagee against the mortgagor to the amount of the judgment, the insurer not being a surety on the debt from the mortgagor to the mortgagee, and the insurer’s liability to the mortgagee being by separate contract unaffected by the rights and liabilities between it and the mortgagor.

Appeal by defendant, tbe Farmers Mutual Eire Insurance Association, from Finley, J., at August Term, 1932, of Ieedell.

No error.

Tbis action was instituted by tbe plaintiff, on 29 July, 1931, to recover of tbe defendaut, tbe Farmers Mutual Fire Insurance Association, tbe amount of tbe loss and damage resulting from tbe destruction by fire, on 24 December, 1930, of certain buildings covered by a policy of insurance issued by said defendant to its codefendant, E. P. Hager. Attached to and forming a part .of said policy, was a rider, known as “Mortgage Clause witb Contribution,” by wbicb tbe amount of tbe loss and damage covered by tbe policy, if any, was payable to tbe plaintiff.

Tbe action was first tried at March Term, 1932, of tbe Superior Court of Iredell County, on issues involving tbe liability of tbe defendant, tbe Farmers Mutual Fire Insurance Association, to tbe plaintiff, under the provisions of the mortgage clause attached to and forming a part of tbe policy. Tbis trial resulted in a judgment that plaintiff recover of tbe defendant, tbe Farmers Mutual Fire Insurance Association, tbe sum of $2,400, witb interest and costs. It was ordered that tbe action be and tbe same was continued to a subsequent term of said court, for trial of tbe issues involving tbe liability of tbe defendants, E. P. Hager and bis wife, Iola O. Hager, to tbe defendant, tbe Farmers Mutual Fire Insurance Association, on tbe principle of subrogation. There was no appeal from tbis judgment and order.

Tbe action was again tried at August Term, 1932, of tbe Superior Court of Iredell County, on issues involving tbe liability of tbe defendants, E. P. Hager and bis wife, Iola C. Hager, to tbe defendant, tbe Farmers Mutual Fire Insurance Association. At tbis trial, issues were submitted to tbe jury and answered favorably to tbe contention of tbe defendants, E. P. Hager and bis wife, Iola C. Hager.

From judgment that tbe defendant, tbe Farmers Mutual Fire Insurance Association, recover nothing of its codefendants, E. P. Hager and bis wife, Iola O. Hager, tbe said defendant appealed to tbe Supreme Court.

Burén Jurney and' J. W. Van Hoy for defendant, Farmer’s Mutual Fire Insurance Association.

Neil S. Sowers and E. M. Land for defendants, E. P. Hager and his wife, Iola G. Hager.

Connor, J.

It may be conceded, without deciding, that there were errors in tbe trial of tbe issues involving tbe alleged liability of tbe defendants, E. P. Hager and bis wife, Iola C. Hager, to tbe defendant, tbe Farmers Mutual Fire Insurance Association. Such errors, if any, were not prejudicial to tbe appellant, for there was no error in tbe judgment that tbe defendant, tbe Farmers Mutual Fire Insurance Association, recover nothing of tbe defendants, E. P. Hager and bis wife, Iola C. Hager. This judgment is affirmed.

Tbe Farmers Mutual Fire Insurance Association was liable to tbe plaintiff, Atlantic Joint Stock Land Bank of Raleigh, N. C., under tbe provisions of tbe mortgage clause, attached to and forming a part of tbe policy of insurance which was issued by said defendant to its codefendant, E. P. Hager. This clause constituted a separate and distinct contract between tbe said defendant and tbe plaintiff. Tbe liability of tbe defendant to tbe plaintiff was not dependent upon or determined by its liability to tbe defendant, E. P. Hager, under tbe policy of insurance issued to him. Bank v. Assurance Co., 188 N. C., 747, 125 S. E., 631.

Tbe defendant, tbe Farmers Mutual Eire Insurance Association, was not a surety for tbe defendants, E. P. Hager and bis wife, Iola C. Hager, on their indebtedness to tbe plaintiff. Tbe said defendant is not entitled to be subrogated pro tanto to tbe rights of tbe plaintiff against tbe defendants, E. P. Hager and bis wife, Iola C. Hager, and for that reason cannot recover of said defendants tbe amount of tbe judgment which tbe plaintiff has recovered in this action of tbe said defendant, by reason of its separate and distinct liability to plaintiff under tbe provisions of tbe mortgage clause.

No error.