Kirkpatrick v. Great American Ins.

STANFORD, J.

This was a suit of inter-pleader, filed in the justice court by appel-lee Insurance Company, in which it alleged it had issued a fire policy covering a barn on a farm occupied by appellant Kirkpatrick, against which farm the Federal Land Bank of Houston had a first lien; that J. B. Mc-Cauley had a second lien, that the Itasca National Bank claimed some kind of lien or claim, the nature of which it did not know; that on October 14, 1925, said bam burned; that it was ready to pay the face of said policy, to wit, $200, but by reason of said adverse claims to said fund it did not know to whom said amount should he paid, and it deposited said sum in the registry of the court and prayed that all said parties be cited to appear and their respective claims to said fund determined, etc. The Land Bank answered, in substance, that it made a loan on said land to J. G. Kirkpatrick, secured by deed of trust on said land, and, in addition to the security of the land, it required the improvements to he insured with the policy payable to it as its interest might appear; that the insurance it required covered only the' residence on said land, and that such policy was issued for its benefit and it had same in its office at Houston; that another policy was obtained on the barn for $200, and said barn was destroyed by fire and said loss adjusted at $200; that the improvements on the land formed a part of its security and that the loss of the barn lessened its security and by reason of these facts it was entitled to have said $200 credited on its loan, but that J. B. McCauley, as it was informed, had foreclosed a second lien on said land and acquired title to same, and that if so, it was willing for said $200 to be adjudged to J. B. McCauley. J. B. McCauley alleged that he was entitled to said $200 because at the time said bam was burned he had a second lien on said farm on which said barn was situated and all improvements on same, and that said lien was a valid and subsisting lien on said barn, evidenced by vendor’s lien notes and deed of'trust; that subsequent to said loss said notes were reduced to judgment in the sum of $8,056.52, and under which judgment he was entitled , to the title and possession of the farm on which said bam was burned, and that his lien was first and superior to all other liens and claims to said funds, save and except a first lien held by the Federal (Land Bank of Houston, and that said bank had waived its said lien in his favor and had agreed that said fund might be paid over to him; that at the time he sold said farm to J. G. Kirkpatrick and retained said second lien notes, the said J. G. Kirkpatrick expressly promised and agreed with him to procure all the insurance he could on the improvements on said farm, and that he, Kirkpatrick, would pay the premium thereon and have the usual loss payable clause attached to said policy, payable to him, J. B. McCauley, and that he relied upon said promise and agreement and believed that said loss payable clause was attached to the policy for $200 on said barn, and did -not know it was not so attached until said bam was burned, etc. J. G. Kirkpatrick answered, alleging that he took out the policy of insurance on the barn on said farm and paid the premiums pn said policy and said policy was in- full force at the time said barn was burned; that he was the owner and in possession of said farm and barn at the time said policy was issued and at the time said barn burned, and that after the adjustment of the loss in the sum of $200, he sold and assigned said policy and adjusted claim for $200 to H. E. Chiles for the benefit of the Itasca National Bank, and asked that judgment be rendered for said bank. The Itasca National Bank answered, setting up substantially the same facts as alleged by J. G. Kirkpatrick, alleging it had' purchased said claim for ,a valuable consideration, eta, and prayed that it be permitted to recover said $200, etc.

The trial in the county court resulted in a judgment in favor of appellee J. B. Mc-Cauley, and J. G. Kirkpatrick and the Itasca National Bank prosecute this appeal and present the record here for review.

It will be observed that the controversy in this case narrowed down to one between appellant Itasca National Bank and appellee J. B. McCauley. Whatever right, if any, the Federal Land Bank of Houston had to said $200 it relinquished to said J. B. McCauley. Whatever right, if any, appellant J. G. Kirkpatrick had to said $200 he transferred to the appellant bank. At the time this transfer to said bank was made, the bam had burned and the loss had been adjusted ip the sum of $200, and at said time either J. B. McCauley -or J. G. Kirkpatrick had the right to receive said $200. If J. G. Kirkpatrick was the owner of and had the right to receive said fund, then the transfer conferred the same right upon the bank; but if Kirkpatrick had no such' right, then his transfer conferred no right upon the bank, for by said transfer the bank took only such rights to'said fund as Kirkpatrick had. So what were the rights of Kirkpatrick, if any, to said fund at the time he executed the transfer to the bank? The case was tried before the court without a jury, and, at the request of appellants, the court filed findings of fact and conclusions of law. Among other findings of fact the court found:

“I find that during the year 1919, J. B. Mc-Cauley ¿old to J. G. Kirkpatrick the 103 acres of land * * * and that he retained a series of vendor’s lien notes against said land, which was also secured by a deed of trust on said land and improvements. * * * I further find that during the latter part of the year 1925 or early part of 1926, the said J. B. McCauley reduced his said second lien notes to judgment * * * in, the approximate sum of $8,000. * * *. I further find that the said J. B. Mc-Cauley had on .two previous occasions * * * instituted suit on said notes and that both of said suits had been settled and dismissed and that as. a part of the consideration for such settlement and dismissal, the said J. G. Kirkpatrick had specifically agreed with-the said J. B. McCauley that he would procure and maintain all of the insurance on the building and improvements situated on said farm that he was able to get, and that he would have attached to the policy or policies the loss payable clause in favor of J. B. McCauley as his interest might appear. * * * I further find, in pursuance of the obligations and agreement above mentioned, that on June 2, 1923, the said J. G. Kirkpatrick applied to A. W. Young & Son, agents for the Great American Insurance Company, and that on said date' the said Young & Son did issue to him a three-year policy on the farm improvements on the land above mentioned for $209 on the bam on said farm, * * * as particularly shown by the policy No. 1-251 on file in this ease; but I further find said policy did not contain the loss payable clause in favor of J. B. McCauley or anyone else. * * * I further find that neither the said McCauley or Smith (his attorney) learned that said loss payable clause was not so attached to said policy until after the bam was burned.”

The above findings of the court are fully supported by the evidence, and on such findings the trial court was correct in rendering judgment for appellee J. B. McCauley. If the mortgagor agrees with the mortgagee to take out insurance on the mortgaged property for the benefit of the mortgagee, and does procure a policy on such property, but fails to have the loss made payable to the mortgagee, as his interest may appear, the mortgagee, in case of a loss, will have an equitable lien upon the money due on such policy. Equity regards that as done which should have been done. Mosley v. Stratton (Tex. Civ. App.) 203 S. W. 397; Walter Connally & Co. v. Hopkins (Tex. Civ. App.) 195 S. W. 658; Chipman v. Carroll, 53 Kan. 163, 35 P. 1109, 25 L. R. A. 308; 4 Cooley’s Ins. Briefs, § 3706; Wheeler v. Insurance Co., 101 U. S. 439, 25 L. Ed. 1056; 26 C. J. p. 442, § 590. There can be no doubt but that by reason of the obligation on the part of Kirkpatrick to insure said property for the benefit of Mc-Cauley, that J. B. McCauley acquired an equitable lien on said $200. It is also true his equitable lien accrued prior to the transfer to the Itasca National Bank, and it seems to be the settled rule of law in this state that assignments, whether legal or equitable, take effect in the order in which they are made. As said by our Supreme Court in Hess & (Skinner Engineering Co. v. Turney, 110 Tex. 155, 216 S. W. 623:

“In our opinion the rule is sound, which gives priority in rank to equitable assignments in the order of their dates, without regard to notice to the debtor. * * * The debtor is fully protected because he is not affected by the assignment until notified, and the subsequent assignee, in dealing with a chose in action, is chargeable with knowledge that he can get no better right than that of his assignor.”

See, also, West Texas Lumber Co. v. Tom Green County (Tex. Civ. App.) 188 S. W. 283; First Nat. Bank v. O’Neil Engineering Co. Tex. Civ. App.) 176 S. W. 78; Henke & Pillot v. Keller, 50 Tex. Civ. App. 533, 110 S. W. 783; Southern Surety Co. v. Guaranty State Bank (Tex. Civ. App.) 275 S. W. 444; Rotsky v. Kelsay Lumber Co. et al. (Tex. Com. App.) 228 S. W. 558.

We have considered all of appellant’s assignments, and, finding no error, overrule same. The judgment of the trial court is affirmed.