Insurance – Recovery – Rights of Mortgagee Under Mortgagor’s Insurance

Defendant issued a policy of fire insurance on an automobile plaintiff had purchased with money borrowed from one Hansen, to whom a note and a chattel mortgage were given as security for the debt. A week after the policy was issued naming plaintiff as the insured, defendant executed an amendment to the policy in the form of an endorsement reading, “Less if any … shall be paid to the insured and Charles H. Hansen as their interests may appear.” The policy provided that it should not apply while the car was subject to any mortgage or other encumbrance not specifically declared and described in the policy. The premium was paid by Hansen. After the automobile was destroyed by fire, plaintiff sued on the policy and the defendant demurred, alleging failure to state a cause of action. The demurrer was overruled and judgment entered for plaintiff and Hansen. Defendant then amended its petition to allege that plaintiff had executed three additional chattel mortgages on the car that violated the provision against encumbrances. Held, admitting the policy might be void as to plaintiff, this does not affect defendant’s liability to Hansen. Koenke v. Iowa Mut. Cas. Co., 175 Kan. 473, 264 P. (2d) 472 (1953).