Sun Insurance Office v. Scott, 284 U.S. 177 (1931)

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Sun Insurance Office v. Scott

No. 28

Argued October 22, 1931
Decided November 23, 1931 *
284 U.S. 177

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Syllabus

1. A provision in a policy of fire insurance prohibiting the placing of a chattel mortgage on the insured property without the consent of the insurer endorsed on the policy is valid, and its violation constitutes a complete defense to an action upon the policy for a loss. P. 180.

2. A loss payable clause attached to a policy of fire insurance, providing that any loss that may be proved due the assured shall be payable to the assured and a named bank, does not imply knowledge on the part of the insurer of the existence of a chattel mortgage on the insured property, nor does it constitute a waiver of a condition in the policy against mortgaging or a consent to a mortgage. P. 180.

3. The fact that an agent of the insurers, with knowledge of a chattel mortgage on the insured property, attached to each of three policies of fire insurance a loss payable rider making any loss under the policies proved due the assured payable to the assured and a named bank, is not sufficient to establish a custom giving to such a clause the effect of a consent on the part of the insurer to change of title or encumbrance of the insured property. P. 181.

4. Under § 9586 of the Ohio General Code, which makes a person who solicits or takes an application for insurance the agent of the company, "anything in the application or the policy to the contrary notwithstanding," knowledge of the insurer’s agent of a chattel mortgage on property insured under policies of fire insurance containing chattel mortgage clauses may not be imputed to the insurers so as to constitute a consent on the part of the latter that the policies should remain in force notwithstanding the encumbrance. P. 182.

46 F.2d 10 reversed.

Certiorari, 283 U.S. 81815, to review judgments affirming judgments against the insurance companies in three cases involving policies of fire insurance.