Heins v. Wicke

71 N.W. 345, 102 Iowa 396

Opinion

Kinne, C. J.

2 I. We will first consider the appeal of the Iowa State Insurance Company. From the facts already set; forth it appears that the insurance company did not appear in this case in the district court, nor did it in fact file any pleading therein. It was defaulted because it failed to appear and defend in the action. Now, said company, having been served with notice that subrogation to the fund to be paid in on the judgment before rendered against it was all the relief asked, and the notice expressly stating that “no other additional judgment'is sought than to be subrogated to the right of Catherine Wicke in and to said judgment,” it had a right to rely upon the fact that no other or further claim would be made against it in the suit, in the absence of notice of making another or additional claim. The company had no interest in the controversy between plaintiff and Catherine Wicks as to the appropriation of the fund due from it under said policy. It was immaterial to it who got the money, if its liability under, the policy, and the judgment thereon, was fully and finally discharged. Therefore it could have had no interest in joining in the litigation between said contesting parties so long as no personal claim was made against it. Nothing is better settled than that where a defendant served with notice of a suit does not appear and answer, but makes default, no decree or judgment can be entered against such defendant granting relief not specifically prayed for, or which is not clearly within the contemplation of a general prayer for relief. The default in such case entitles the plaintiff to recover only to the extent of the relief sought in the petition. Johnson v. Mantz, 69 Iowa, 710 (27 N. W. Rep. 467); Byam v. Cook, 21 Iowa, 392; Lafever v. Stone, 55 Iowa, 49 (7 N. W. Rep. 400); Tice v. Derby, 59 Iowa, 312 (13 N. W. Rep. 301); Marder v. Wright, 70 Iowa, 42 (29 N. W. Rep. 799); Mickley v. Tomlinson, 79 Iowa, 383 (41 N. W. Rep. 311, and 44 N. W. Rep. 684); Worth v. Wetmore, 87 Iowa, 62 (54 N. W. Rep. 56); Shelley v. Smith, 50 Iowa, 543; Larson v. Williams, 100 Iowa, 110 (69 N. W. Rep. 442); Bosch v. Kassing, 64 Iowa, 314 (20 N. W. Rep. 454). Under the original notice and the original petition filed in this case, and in the absence of an appearance by the defendant insurance company, the court had no jurisdiction to enter a personal judgment against it. There was no prayer for general relief; there was no prayer for a personal judgment against the company, and hence no basis, either in the notice or petition, for entering a personal judgment against the company. The situation was not changed by the filing of an amendment to the petition asking for a personal judgment. No further notice was served upon the company. It was not advised that any such relief would be claimed, but, on the contrary, in the only notice served upon it it was told that no relief was, or would be, sought against it, save that plaintiff be subrogated to the rights of Catherine Wicke in and to the policy and the judgment in her favor. We think appellee’s argument is a confession that if the insurance company did not appear and answer, the court had no right to enter a personal judgment against it, but, whether it so confesses or not, it is certain from the record before us that the company did .iot in fact appear, and did not file an answer in the case. The personal judgment against it was, therefore unwarranted.

3 4 II. Did the court err in refusing to set aside the default and judgment entered against the insurance company? Code, section 3159, provides: “The judgment shall not be vacated on motion or petition until it is adjudged that there is a valid defense to the action in'which the judgment is rendered.” Appellee contends that no valid defense was shown, therefore the ruling of the court refusing to set aside the default was right. From the showing to set aside the default, as amended, it appeared that the company, on June 5, 1895, paid to the "clerk of the district court of Linn county the full amount of the judgment rendered against it on said policy of insurance; that plaintiff had intervened in said suit; that afterwards he withdrew his petition of intervention, with the consent of the parties to the suit; that at said time he asked the attorney for the company if they would pay the money into the hands of the clerk of the court, in case judgment was obtained in said cause, and was assured that they would do so; that he informed said attorney that he intended to bring suit against Catherine Wicke and the insurance company, asking to be subrogated to the rights of Wicke Bros, under the policy, and stated that if he did not, he would take no advantage of the company if they would pay the money to the clerk. February 11,1892, the attorney for plaintiff wrote the company, inclosing an original notice, and asking an acceptance of service thereof. In this letter he said: “While I have not much hope in this matter (for I think the case will be reversed), yet, if it should stand, I wish to be in shape to compel the Wickes to do what is right by us.” The company accepted service of the notice. March 9,1892, the company sent to the clerk of the district court of Linn county, Iowa, an answer, pleading that the company had been sued upon two policies by Catherine Wicke; that the case was undetermined, and asking the court to protect the company in its rights, and offering to pay any sum of money that might be found due Catherine or Philip Wicke into the hands of the clerk of said court; that it asked said clerk to file said answer in the case of Heins against Wicke, but it was never filed in this case. February 17, 1894, the attorney for plaintiff wrote the company as follows: “I learn that the case of Wicke v. State Insurance Co. has been affirmed by the supreme court. I wish, therefore, to remind you of the case that is still pending in the district court of Linn county, entitled ‘B. F. Heins v. Philip Wicke, Iowa State Insurance Co., et al.,’ seeking to subrogate the mortgage to the proceeds of the said policy. You will remember that notice was served on you, and you appeared in the case and answered. The money will therefore better be paid to the clerk of the district court for such disposal as the court may decide and direct.” The company answered: “Yes. What money we will have to pay in the Wicke case we will pay to the clerk of the district court." The showing also is that the original notice and petition did not refer to any claim for a personal judgment against the insurance company, and nothing was asked except that the plaintiff be subrogated to the rights of Catherine Wicke to the insurance money, and that afterwards, without notice to said company, the plaintiff amended his petition, setting up a new cause of action not warranted by the notice or petition, which said amendment did not come to the 'notice of the company until August 8, 1895; that after the money had been paid to the clerk a judgment was rendered in said action for it against the company in favor of plaintiff. The company aver that the default and judgment was wrongfully entered by fraud and misrepresentation and irregularities, and without disclosing to the court the facts. Appellee’s claim is that, because the company did not instruct the clerk of the court to whom it paid the money in satisfaction of the judgment, to hold the same until the court should determine who was entitled to it, it paid said money in disregard of plaintiff’s rights, and should be compelled to pay it a second time. The contention is based upon the claim that the company, before it paid the money, had notice that plaintiff claimed the same. Let it be conceded that the company had such notice. Does that interfere with its right to pay the money to the clerk of the court in discharge of a judgment which had been rendered against it? We think not. True, it might not, with such notice, pay the money to the other claimant of it. But in paying to the clerk it was discharging its obligation in a legal way, and it clearly had a right to so pay, unless it had done something to mislead the plaintiff into the belief that if it did so pay it would tie the money up in the clerk’s hands by conditions attached to his paying it out. The suggestion in the letter of appellee’s attorney to pay the money into court was followed by the company. The words of the letter, “for such disposal as the court may decide and direct,” did not require the company to undertake to hold the money in the clerk’s hands until the contest between appellee and Catherine Wicke should be determined. Appellee knew the company would pay the money to the clerk in satisfaction of the judgment. He had ample opportunity before it was so paid, to have taken the necessary steps to have kept it in the clerk’s hands until such time as it was judicially determined to whom it should be paid. He did not do so. It was no part of the company’s duty to take steps to hold the money in the hands of the clerk. They paid it to that officer in satisfaction of the judgment,.as they had a right to do, and there is no reason in law or equity why they should be compelled to pay a second time. We think there was a good defense shown, and that the court erred in refusing to set aside the default. As this view disposes of the case so far as the insurance company is concerned, we need not consider other reasons urged for a reversal of the judgment and decree as to it.

5 III. As to the appeal of Catherine Wicke. This appellant contends that, inasmuch as Bontty assigned the policy of-insurance to Philip Wicke, it operated to release any equitable lien Bontty 'might otherwise have had in the policy or its proceeds, by virtue of his mortgage. We do not think so. As there was a sale of the property, the buildings upon which were insured, such sale would vitiate the policy unless it was assigned to the purchaser with the consent of the company. Now, we find that the mortgage and assignment of the policy were all executed as a part of one and the same transaction. The mortgage provided that the mortgagor should keep all of the buildings constantly insured; This was a covenant which would only be discharged by having the insurance alive at all times during the life of the mortgage. In view of this obligation upon Philip Wicke it is obvious from all of the evidence and circumstances that the assignment of the policy was made to preserve the insurance, and that the obligations assumed by the mortgagor to keep the property insured were in no wise waived or released by such assignment.

6 IY. Appellant claims that the assignment by Bontty to Philip Wicke estops plaintiff from recovering the amount of the loss of Philip Wicke’s assignee, Catherine Wicke. Under the evidence there is no doubt that Catherine Wicke had actual notice of the Bontty mortgage long prior to the time she took the assignment of the policy from her son, Philip Wicke. Whether she had actual notice at the same time of the provision of the mortgage touching the insurance, and of Bontty’s and his assignee’s claims thereunder, is a matter as to which the evidence is in conflict. Without stopping to point out the reasons for our conclusion, we may say that we think she did have actual notice of the insurance clause in the mortgage, and of the claim of Bontty and his assignee thereunder, prior to the time she took the assignment of the policy. She was not, therefore, misled by either the acts or silence of the appellee and his assignor. She voluntarily made the purchase of the policy, knowing that the appellee or his assignor made a claim to its proceeds by virtue of the insurance clause in said mortgage. The necessary elements of an estoppel are wanting.

7 Y. Appellant places much reliance upon his plea of former adjudication. It seems that appellee commenced and prosecuted an action for the foreclosure of his mortgage, and obtained a judgment and decree thereon, prior to the judgment and decree in the action at bar, and it is said he cannot now maintain this action based upon the same mortgage. To be a bar, a judgment must be between the same parties or their privies, and must equally bind both parties in the case in which an estoppel is claimed. The very question in issue in the present case must have been involved in the former action, and have been determined therein. Woodward v. Jackson, 85 Iowa, 432 (52 N. W. Rep. 358), and cases cited. The plea of former adjudication is denied, and substantially the only evidence touching the matter is the decree entered in the former case. From it it does not appear that the matter now litigated was involved in the former action, nor that the parties were the same, nor that the present parties were in privity with those in the former action. Nor do we think that, as a matter of fact, the former action if shown to have been between the same parties or their privies, would bind the present parties as to the matter now in controversy.

8 VI. It is insisted that plaintiff has no right to subrogation as against Catharine Wicke, and hence is not entitled to a personal judgment against her. We have no doubt that plaintiff had an equitable lien upon the fund, which might be recovered by Catherine Wicke from the insurance company, to satisfy which so much of the proceeds of said policy as might be necessary should be thus applied. Such being plaintiff’s right, and said Catharine Wicke having received the full proceeds of said policy, we discover no reason for holding that he is not entitled to a personal judgment against Catherine Wicke. Nor do we regard it as of any importance that this policy was in existence upon the property prior to the sale of the real estate from Bontt'y to Philip Wicke. Ames v. Richardson, 29 Minn. 330 (13 N. W.Rep. 137), and cases cited; 1 Jones, Mortg., sections 400, 402, 403. In view of our finding that Catharine Wicke had actual notice of plaintiff’s equitable lien before she purchased the policy, we are not called upon to determine as to whether or not the provision of the mortgage relied upon was a covenant running with the land.

9 VII. Appellant contends that plaintiff, by standing by and permitting Catherine Wicke to litigate for the recovery of the amount of the policy, in which suit she was successful, is now estopped from receiving the proceeds of the policy which have been paid to her by the clerk. When Catherine Wicke instituted her suit against the company, she had an interest in the amount to be recovered, in addition to the sum which would be necessary to satisfy plaintiff’s equitable lien. It appears that in her suit against the company plaintiff intervened, and at her request afterwards withdrew his appearance and petition of intervention. Surely, under the circumstances, plaintiff is not estopped. That he failed to prosecute his intervention petition was due to Catherine Wicke’s request. We discover nothing in this record upon which an estoppel can properly be predicated. We have considered all questions discussed by appellant which are deemed important, and find no ground for disturbing the judgment and decree rendered against Catherine Wicke.

10 YIII. As to the appeal of the plaintiff. The lower court entered a judgment in favor of plaintiff for one thousand five hundred dollars. At that time some one thousand eight hundred dollars was due upon plaintiff’s judgment, and plaintiff insists that he should have had judgment for the full amount due. His mortgage covered the lot as well as the buildings thereon. He has a decree of foreclosure for the sale of the lot. Just what it is worth may be a matter of doubt, but plaintiff admits that its value is from two hundred dollars to two hundred and fifty dollars. It is true, the judgment and decree entered below in this case fail to show why the court reduced the amount of plaintiff’s recovery from one thousand eight hundred dollars to one thousand five hundred dollars. While the record is not clear as to the value of the lot upon which the plaintiff’s judgment is now a lien, still he admits it to be worth from two hundred dollars to two hundred and fifty dollars. This amount was properly deducted from the amount of his recovery as against the proceeds of the policy. Again, it appears that Catherine Wicke was compelled to pay out a large sum of money in prosecuting the litigation upon the insurance policy. She reaps but little benefit therefrom, and it is but just and equitable that plaintiff, who receives most of the proceeds of said policy, and was chiefly benefited by the litigation, should bear a part of the burden incident to the recovery of the fund. Just how much the court below reduced the amount of plaintiff’s recovery on this account, does not appear, but it is apparent, considering the value of the lot, the amount of recovery on the policy, and the amount of the judgment rendered in plaintiff’s favor, that he has no just cause of complaint. On plaintiff’s appeal the judgment and decree below are affirmed. On the appeal of Catherine Wicke the judgment and decree below are affirmed. On the appeal of the Iowa State Insurance Company the judgment and decree below against it are REVERSED.