Case Name: Frink vs. The Hampden Insurance Company
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1865-09-18
Citations: 45 Barb. 384
Docket Number: 
Parties: Frink vs. The Hampden Insurance Company.
Judges: 
Reporter: Barbour's Supreme Court Reports
Volume: 45
Pages: 384–388

Head Matter:
Frink vs. The Hampden Insurance Company.
H. obtained an insurance from the defendant upon property owned by him, the policy stating that the loss, if any, should be “payable to F. as collateral.” H. was indebted to F. at the time. Held that the agreement that F, should receive the money, in case of a loss by fire, was only collateral to and dependent upon, the original undertaking, that after a loss had occurred, and not lefore, the money should be paid over to F. and not an assignment of the policy before any loss.
BM, also, that F. to whom the loss was payable as appointee, could maintain an action upon the policy; and that it was not necessary for him to allege, in his complaint, that he had an insurable interest.
Bold, further, that the facts presented did not show an assignment before loss, to a party who had no interest in the property, within the principle of the cases, but a case where the relation of insurer and insured existed between the defendant and H. the owner of the property, until a loss had taken place, when F. as appointee of the insured, stepped in and claimed under the agreement that the insurer should pay the money to him.
The case of Freeman v. The Fulton Insurance Company, (14 All. Pr. Pep. 398,) commented on, and declared to be not in conflict with Grosvenor v. The Atlantic Fire Insurance Compmiy, (17 FT. Y. Pep. 391.)
APPEAL from an order of a special term, overruling a demurrer, to the complaint. The complaint alleges the defendant to be an incorporation, as an insurance company, under and by virtue of the laws of the state of Massachusetts ; the application of one Eichard Hurst, of the village of Cohoes, to the company, to be insured against loss or damage by fire, upon certain property owned by him,- for the term of one year from the first day of August, 1863; that the defendant became insurer, setting out the certificate of insurance in full, “loss, if any, payable to J. W. Frink, as collateral;” the destruction of the insured property of the value of more than the amount covered by the policy, and all the requisite steps to charge the defendant; that previous to the issuing of the certificate, the plaintiff had loaned to Hurst his promissory notes to an amount exceeding $4500, and which were in the hands of bona fide holders, and that he is still liable upon said notes to an amount exceeding the sum covered by the certificate; that said notes are out standing and unpaid; that in consideration of the premium of $112.50, the defendant, at the request of Hurst, agreed to pay loss, if any, to Frink, and the plaintiff therefore claims to recover the amount of the loss. The defendant demurs, generally, alleging that the complaint does not state facts sufficient to constitute a cause of action.
Ira Shafer, for the plaintiff.
S. Hand, for the defendant.

Opinion:
By the Court, Miller, J.
It is not claimed that the plaintiff had any insurable interest in the property insured; but it is insisted that he was the appointee of Hurst the insured, to receive the loss if any was incurred, and hence is entitled to maintain this action.
In Grosvenor v. The Atlantic Fire Insurance Co., (17 N. Y. Rep. 391,) the action was brought by the mortgagee, to whom the loss was payable, and it was held that he could not recover because of a breach of the conditions of the policy by the mortgagor. The learned Judge in that case held that the plaintiff was the appointee of the party insured, to receive the money that might become due from the insurers upon the contract. He says : " The undertaking to pay the plaintiff was an undertaking collateral to and dependent upon the principal undertaking to insure the mortgagor. The effect of it was, that the defendant agreed that whenever any money should become due to the mortgagor upon the contract of insurance, it would, instead of paying it to the mortgagor himself, pa)-- it to the pdaintiff. The mortgagor must sustain a loss for which the insurers were liable, before the party appointed to receiye the money would have a right to claim it. It is the damage sustained by the party insured, and not by the party appointed to receive payment, that is recoverable from the insurers. (Macomber v. The Cambridge Mutual Fire Insurance Co., 8 Cush. 133.") . He then proceeds to state that "The insurance being upon the interest of the mortgagor, and he having parted with that interest before the fire, no loss was sustained by him, and of course, none was recoverable by his assignee or appointee." The effect of, and the irresistible inference to be drawn from, these observations is, that but for the fact that the mortgagor had parted with his interest, and had sustained no loss, the plaintiff could have recovered as his appointee. (See also Bidwell v. Northwestern Ins. Co., 19 N. Y. Rep. 179, 183.)
The case above cited, (17 N. Y. Rep. 391,) establishes that the loss being payable to another party, instead of the insured, was merely a designation of the person to whom it was to be paid after it had accrued, and was not an assignment of the policy because payable to another.
In the case at bar it was an insurance of Hurst, and the plaintiff was the appointee to receive the money in the event of a loss by fire. It was only an agreement collateral to, and dependent upon, the original undertaking, that after a loss had occurred, and not "before, the money should be paid over to the plaintiff, and not an assignment of the policy before any loss. If the case of Grosvenor v. The Atlantic Fire Insurance Co., is a reliable authority, then it was not necessary for the plaintiff to allege in his complaint that he had an insurable interest, and the plaintiff, to whom the loss was payable as appointee, can maintain this action; and unless there is some authority that overrules the doctrine laid down, it must be considered as conclusive in favor of the plaintiff's right to recover.
The defendant's counsel insists that there is such authority, and our attention has been particularly directed to the case of Freeman v. The Fulton Insurance Co., (14 Abb. Pr. Rep. 398,) which is mainly relied upon to sustain an adverse theory: In that case one Stetson was the owner of the steamer 'Oataline' at the time of the issuing of the policy, and the defendants insured the plaintiffs, or whom it might concern, and the loss, if any, was payable to the plaintiffs, It was held that the complaint was demurrable, and that in order to recover upon a fire insurance policy for the amount of the loss, the complaint must allege that the plaintiff had an interest in the thing insured at the time of the loss; unless the claim was assigned to him afterwards or he sued as trustee of an express trust; and if he sued as trustee or agent, the complaint should allege the existence of such trust and show his authority to collect the amount insured. To make the case cited parallel to the one at bar, Stetson should have been the insured party, and the loss payable to the plaintiffs. As it stands, the plaintiffs, or whom it might concern, were the parties insured. The plaintiffs had no insurable interest, and Stetson was not insured, nor did it appear that the plaintiffs had acted as the trustees or agents of Stetson, the owner. Entirely a different question was presented from the one now considered, and I think the authority last cited is not in conflict with 17 N. Y. Rep. And although referred to approvingly in Fowler v. The New York Indemnity Insurance Co., (26 N. Y. Rep. 425,) yet I understand it was only for what it actually did decide, and not as sustaining a doctrine adverse to the former case.
The facts presented by the complaint here, do not show an assignment before loss to a party who had no interest in the property, within the principle of several cases to which we have been referred, (Peabody v. Washington Insurance Co., 20 Barb. 340; Fowler v. N. Y. Indemnity Insurance Co., 26 N. Y. Rep. 425; Ruse v. Life Insurance Co., 23 id. 516; Hooper v. Hudson River Insurance Co., 17 id. 420; Granger v. Howard Insurance Co., 5 Wend. 202,) bufa case where the relation of insurer and insured existed between the defendant and Hurst the owner of the property, until a loss had taken place, when the plaintiff, as the appointee of the insured, steps in and claims under the agreement that the defendants should pay the money to him.
There are several pther points urged by the d^fqndant's counsel, that can not he upheld, if the views already expressed are sound and maintainable; and hence a discussion of them is not required.
[Albany General Term,
September 18, 1865.
My opinion is that the case of Grosvenor v. The Atlantic Fire Insurance Co. is a decisive authority upon the question discussed, and that the demurrer to the plaintiff's complaint was not well taken.
The order overruling the demurrer must be affirmed with costs, with leave to withdraw the demurrer, and put in an answer upon the usual terms.
Hogeboom, Miller and Ingalls, Justices.]