Citizens State Bank v. Shawnee Fire Insurance

Citations

• 91 Kan. 18
• 137 P. 78
• 1913 Kan. LEXIS 327

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Insurance — Mortgagee’s Interest — Dual Relation of Insurance Agent — No Fraud Presumed. An agent of an insurance company with power to issue policies insured a property on which the bank of which he was cashier held a mortgage for about one-half the amount of the insurance, attaching a clause making the loss, if .any, payable to the mortgagee as its interest should appear. Held, that in the absence of fraud or collusion the company could not deny liability on account of its agent’s relation to such mortgagee.</p> <p>2. - Same., The rule that one can not serve two masters does not apply when loyalty to one involves no breach of duty to the other. Fraud is not necessarily to be presumed from mere duality of relation.</p> <p>3. -Mortgage Clause • — ■ Foreclosure of Mortgage — Not Fatal to Recovery. A mortgage clause that the loss, if any, shall be payable to the mortgagee as his interest may appear, “subject, however, to all the terms and conditions of this policy,” does not relieve the insurer from .liability upon a policy containing a condition that it shall be avoided by proceedings to foreclose any mortgage on the property — the insuring of a mortgage lien being sufficient indication that the company must have contemplated a possible or probable foreclosure. When an insurance contract prepared by the insurer contains ambiguous or inconsistent provisions it will be construed so as to uphold rather than defeat the indemnity.</p>