First National Bank v. Renn

Citations

• 63 Kan. 334
• 65 P. 698
• 1901 Kan. LEXIS 145

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Mortgage — Insurance Policy as Collateral Security — Right of Set-off by Grantee of Mortgagor. Where a mortgagee of real estate requires the mortgagor to take out a policy of insurance on the mortgaged property and deliver it, with the mortgage, to the mortgagee as collateral security, which policy contains a condition that “ the mortgagee or trustee shall notify the company of any change of ownership or increase of hazard which shall come to his or their knowledge, and, shall have permission foi such change of ownership or increase of hazard duly indorsed on the policy,” and the mortgagor sells the mortgaged property and indorses an assignment of the policy to the purchaser, who agrees to pay the debt, and assigns to him the policy properly indorsed thereon, and both grantor and grantee request the mortgagee, who is in possession and control of the policy, to secure the consent of the insurance company to such assignment, and the mortgagee neglects so to do, by reason whereof the insurance company is relieved from all liability to such grantee, and where the'mortgaged property is afterward wholly or partially destroyed by fire, the grantee may set up a counterclaim for damages in an action brought by the mortgagee to foreclose the mortgage. This rule is equally applicable to an action to foreclose a mortgage by one holding it, by assignment, in trust for certain outstanding obligations of the mortgagee, where the policy has been left in the hands of the mortgagee to be cared for and renewed, if necessary.</p> <p>2. Insurance Company — Assignment of Policy. To solicit an insurance company not authorized to do business in Kansas to consent to the assignment of a policy issued by it at a time when it was so authorized is not a violation of section 3381, General Statutes of 1901.</p>