Court Opinion

ID: 7894188
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:51:29.457209+00
Date Added: 2024-06-11T16:32:00.890700
License: Public Domain

Stewart, J.,
delivered the following concurring opinion: Linthicum, the appellee, held a policy of insurance on the buildings upon certain property which he sold to Callahan, the appellant, on the 1st of June, 1869, taking a mortgage on the 5th of June, 1869, from him to secure the balance due of the purchase money.
*105The buildings were destroyed by fire in the following December, and Linthicum told Callahan he would try and get the insurance money, some $800, from the company, and if he got it, he would give it to him on the last payment of the mortgage ; he promised to give it to him or allow it on the last payment of the mortgage.
The last payment was not then, but was afterwards made, and the mortgage debt was satisfied by Callahan. The insurance money was paid by the company to Linthicum, who then refused to pay it to Callahan, and this action was brought by him to recover from Linthicum the money so received.
Whether Callahan is entitled to enforce the recovery of the money is the question involved in the case.
The Court of Common Pleas, before which the case was tried, upon motion, instructed the jury that Callahan could not recover it; but I think there was error in this.
The promise made by Linthicum to Callahan was the acknowledgment of the equitable obligation resting upon him, resulting from their relations as vendor and vendee, or mortgagee and mortgagor, which afforded sufficient foundation for his promise. He is to be treated as the agent or trustee of Callahan under the circumstances, in receiving the money from the company, in pursuance of his promise.
After his mortgage debt was paid, he was indemnified ; and the loss of the buildings by fire having fallen upon Callahan, he had a meritorious claim to the insurance money, the policy remaining unchanged by the conveyance to Callahan, and his execution of the mortgage to Linthicum.
The action for money had and received, is an equitable action and equally as remedial as a bill in equity, and the plaintiff, in support of it, can resort to all equitable circumstances incident to his case. Kennedy vs. Balt. Ins. Co., 3 H. & J., 367; Murphy vs. Barron, 1 H. & G., *106258; Penn vs. Flack, 3 G. & J., 369; State, use of Stevenson, vs. Reigart, 1 Gill, 1; Vrooman vs. McKaig, 4 Md., 350.
Under the 4th sec. of the Act incorporating the insurance company, the evidences of debt held by the company for premiums of insurance are made a lien on the property insured, no matter who may afterwards hold it.
No sale or transfer thereof subsequent to the insurance, can invalidate it. The lien thus imposed, it is provided by the law, is to he treated as a mortgage and to be collected as such, according to the stipulations of the policy of insurance, in case of fire; the company has the election within ninety days after proof of the damage, to repair or replace the buildings, so as to put them in as good order as they were before the injury by the fire.
■' If the company had adopted this latter alternative ; Callahan would have had the benefit of their replacement, without liability over to Linthicum.
The election of the company to pay the money did not prejudice the rights of Callahan.
Linthicum having insured the buildings before the sale, and having conveyed the property to Callahan without reservation as to the insurance, holding the mortgage perpetuating his insurable interest; then held the policy to secure himself until his debt was paid, and afterwards, as the agent or trustee of Callahan, the mortgagor and owner of the property upon which the lien existed.
The collection of the insurance money by Linthicum, in lieu of the replacement of the buildings and under the promise to apply it to Callahan’s use, must be taken as made in good faith, according to his assurance, for the use of Callahan, and could confer no right upon him to appropriate it to his own use. It was not his money, hut money in the hands of the company which he promised to pay if he.got it.
*107It would be an unwarranted construction to be put upon Linthicum’s act, in the receipt of the money, to attribute to him the intent to claim it, and hold it as bis own.
That he received it as the agent of Callahan, who had adopted the policy of insurance, is the just construction.
The subsequent adoption of a policy by a party interested, and for whose benefit it was designed, is equivalent to his prior order. Newson’s Adm’r vs. Douglass, 1 H. & J., 417.
The determination of Lintliicum to receive the money on his own account, and so to hold it, would have been a manifest breach of his promise to Callahan, and a fraud upon him
It is not to he presumed that Linthicum collected the money witli such intent, but for the use of Callahan.
The relations of the parties to the property insured, the lien on the same on account of the insurance, giving to Callahan any resulting benefit, and creating privity of interest in the contract of insurance between Linthicum and Callahan ; the proffer of the former to collect the money for the latter, are all considerations plainly prescribing Linthicum’s duty and obligation.
After deducting for any reasonable charges in its collection, Linthicum was bound to apply it to the use of Callahan, who is entitled to recover the same in this action according to the facts set out in the record. I think the judgment should he reversed and new trial ordered.