Court Opinion

ID: 8757888
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:54:02.601802+00
Date Added: 2024-06-11T17:01:22.230131
License: Public Domain

VAN DEVANTER, Circuit Judge,
after stating the case as above, delivered the opinion of the court.
In approaching the decision of any controversy arising out of a policy of insurance it is well to have in mind the cardinal rule that the policy is a contract by which must be measured the right of the insured and the obligation of the insurer. As was said by Mr. Justice Jackson in speaking for the court in Imperial Fire Insurance Company v. Coos County, 151 U. S. 452, 462, 14 Sup. Ct. 379, 38 L. Ed. 231:
“Contracts of insurance are contracts of indemnity upon the terms and conditions specified in the policy or policies embodying the agreement of the parties. For a comparatively small consideration the insurer undertakes to guaranty the insured against loss or damage upon the terms and conditions agreed upon, and upon no other; and when called upon to pay, in case of loss, the insurer, therefore, may justly insist upon the fulfilment of these terms. If the insured cannot bring himself within the conditions of the policy, he is not entitled to recover for the loss. The terms of the policy constitute the measure of the insurer’s liability, and, in order to recover, the assured must show himself within those terms; and if it appears that the contract has been terminated by the violation on the part of the assured of its conditions, then there can be no right of recovery. The compliance of the assured with the terms of the contract is a condition precedent to the right of recovery. If the assured has violated or failed to perform the conditions of the contract, and such violation or want of performance has not been waived by the insurer, then the assured cannot recover. It is immaterial to consider 'the reasons for the conditions or provisions on which the contract is made to terminate or any other provision of the policy which has been accepted and agreed upon. It is enough that the parties have made certain terms, conditions on which their contract shall continue or terminate. The courts may not make a contract for the parties. Their function and duty consist simply in enforcing and carrying out the one actually made.”
See, also, Jeffries v. Life Insurance Co., 22 Wall. 47, 54, 22 L. Ed. 833; Ætna Life Insurance Co. v. France, 91 U. S. 510, 512, 23 L. Ed. 401; Phoenix Life Insurance Co. v. Raddin, 120 U. S. 183, 189, 7 Sup. Ct. 500, 30 L. Ed. 644; National Surety Co. v. Rong, 60 C. C. A. 623, 627, 125 Fed. 887.
Stipulations such as are contained in this policy have frequently been subjected to consideration in the courts, and their validity is not open to question. Carpenter v. Providence Washington Insurance Co., 16 Pet. 495, 512, 10 L. Ed. 1044; Imperial Fire Insurance Co. v. Coos County, 151 U. S. 452, 463, 14 Sup. Ct. 379, 38 L. Ed. 231; Northern Assurance Co. v. Grand View Building Associa*500tion, 183 U. S. 308, 361, 364, 22 Sup. Ct. 133, 46 L. Ed. 213; Hunt v. Springfield Fire & Marine Insurance Co., 196 U. S. 47, 25 Sup. Ct. 179, 49 L. Ed. 381; Forbes v. Agawam Mutual Fire Insurance Co., 9 Cush. 470; Worcester Bank v. Hartford Fire Insurance Co., 11 Cush. 265, 59 Am. Dec. 145; Walsh v. Hartford Fire Insurance Co., 73 N. Y. 5; Smith v. Insurance Co., 60 Vt. 682, 691, 15 AtL 353, 1 F. R. A. 216, 6 Am. St. Rep. 144; Cleaver v. Traders’ Insurance Co., 71 Mich. 414, 39 N. W. 571,15 Am. St. Rep. 275; Winehill v. Germania Insurance Co., 27 Fa. Ann. 63; Girard Fire & Marine Insurance Co. v. Hebard, 95 Pa. 45; Hutchinson v. Western Insurance Co., 21 Mo. 97, 64 Am. Dec. 218.
One claim of the plaintiffs is that the allegations of the complaint are to the effect that the giving of the chattel mortgage was-consented to by the insurance company, acting through those in-superior authority, such as the board of directors, and not through subordinate agents, whose power was restricted by the terms of fire-policy, and that it was not necessary that consent so given be indorsed upon or added to the policy. But, whatever might have-been the effect of consent so given, but not indorsed upon or added to the policy, we think the allegations of the complaint are not reasonably susceptible of the interpretation suggested, and that they mean nothing more than that consent to the chattel mortgage was given at the time and place when and where the loss payable indorsement was made upon the policy and by the agents who made that indorsement.
The real and controlling question is: What, in view of the plain, and unambiguous stipulations in the policy, is the meaning and interpretation of this loss payable indorsement? Obviously, the words used therein must be read in the light of the purpose which actuated the parties in stipulating that the policy could be modified, or any provision or condition thereof waived, only by a writing of equal dignity and credit with the policy itself. Of the purpose of such stipulations it is said in Northern Assurance Company v. Grand View Building Association, supra:
“It should not escape observation that preserving written contracts from change or alteration by verbal testimony of what took place prior to and at the time the parties put their agreements into that form is for the benefit of both parties. In the present case, if the witnesses’on whom the plaintiff relied to prove notice to the agent had died, or had forgotten the circumstances, he would thus, if he had depended to prove his contract by evidence extrinsic to the written instrument, have found himself unable to do so. So, on the other side, if the agent had died, or his memory had failed, the defendant company might have been at the mercy of unscrupulous and interested witnesses. 'It is not an answer to say that such difficulties attend, other transactions and negotiations, for it is the knowledge of the inconveniences that attend oral evidence that has led to the custom of putting important agreements in writing, and to the legal doctrine that protects them when so expressed, and when no fraud or mutual mistake exists, from being-changed or modified by the testimony of witnesses as to conversations and negotiations that may never have taken place, or the real nature and meaning of which may have faded from recollection. Besides the importance of such considerations to the parties immediately concerned in business transactions, the community at large have a deep interest in the welfare and prosperity of such beneficial institutions as fire insurance companies. It: *501would be very unfortunate if prudent men should be deterred from investing capital in such companies by having reason to fear that conditions which have been found reasonable and necessary to put into policies to protect the companies from faithless agents and from dishonest insurers are liable to be nullified by verdicts based on verbal testimony.” 183 U. S. 364, 22 Sup. Ct. 133, 46 L. Ed. 213.
In this policy it was plainly stipulated that, if the subject of insurance be personal property, and be or become incumbered by a chattel mortgage, the entire policy, unless otherwise provided by agreement indorsed thereon or added thereto, should be void; that the policy was made and accepted subject to the stipulations and conditions therein, together with such other provisions, agreements, or conditions as should be indorsed thereon or added thereto; that in respect of any provision or condition which by the terms of the policy it was within the power of an officer, agent, or other representative to waive, the power to waive the same could be exercised only by a written indorsement upon or addition to the policy, and that no privilege or permission affecting the insurance should exist or be claimed by the insured unléss so written or attached. The loss payable indorsement renewed, and in effect reiterated, all of these stipulations by declaring that it was made “subject to all the conditions of this policy.” It is plain, therefore, that the indorsement was written upon the policy in pursuance of a mutual and expressly declared purpose to make the policy with the indorsement a complete repository and memorial of the entire agreement, and to preclude any resort to parol evidence. Effect should be given to this purpose so far as it can reasonably be done, and to that end especial care should be taken to find in the indorsement, and in the policy of which it is part, the means of its proper interpretation.
The fact, as alleged in the complaint, that the indorsement was written upon the policy on the same day that the chattel mortgage was executed, is not material, because at most it would only tend to show that the agents of the company knew of the chattel mortgage when the indorsement was written. There being no allegation of fraud or mutual mistake, and this being an action at law, what the agents may have known, and even what they may have said, is of no importance, because by the stipulations of the policy they were powerless to waive any provision or condition or to affect the rights of the parties except by a writing indorsed upon or added to the policy. Whatever was not so indorsed upon the policy or added to it was the same as if not done, because it was not authorized, and was to be without effect.
Carpenter v. Providence Washington Insurance Co., 16 Pet. 495, 512, 10 L. Ed. 1044, was an action upon a policy of fire insurance containing a provision to the effect that if, without notifying the company, and having the same mentioned in or indorsed upon the policy, the insured then had or should thereafter obtain any other insurance upon the same property, the policy should be void and of no effect. Other insurance was had or obtained, and was not mentioned in or indorsed upon the policy. At the trial the plaintiff *502requested the court to instruct the jury that, if the company had notice in fact of the other insurance, this was a compliance with the provision in the policy. The request was refused, and an instruction was given to the effect that notice to the company of the other insurance was not sufficient, but that the same should have been mentioned in or indorsed upon the policy; otherwise the policy became void. Of this it was said by Mr. Justice Story, who delivered the opinion of the court:
“We think this instruction was perfectly correct. It merely expresses the very language and sense of the stipulation of the policy; and it can never be properly said that the stipulation in the policy is complied with when there has been no such mention or indorsement as it positively requires, and without which it declares the policy shall henceforth be void and of no effect.”
The .subject was again considered and the authorities exhaustively examined in Northern Assurance Co. v. Grand View Building Association, 183 U. S. 308, 22 Sup. Ct. 133, 46 L, Ed. 213, where the ruling in Carpenter v. Providence Washington Insurance Co. was affirmed and applied.
Eorbes v. Agawam Mutual Eire Insurance Co., 9 Cush. 470, was an action upon a policy of fire insurance containing a provision to the effect that, if other insurance was had or obtained upon the same property, the policy should be void, unless the other insurance was consented to by the directors, and their consent signified by a statement thereof in the policy, or by an indorsement thereon signed by the secretary. Other insurance was obtained, but the same was not consented to in the manner prescribed in the policy. It appeared by the evidence that in the application for the policy the insured had requested that consent to obtaining other insurance be signified in the policy, and that this application bore an indorsement of approval by one of the directors. Of this it was said by Chief Justice Shaw:
“But we think this evidence is far from warranting the inference sought to be drawn from it. It certainly proves notice of the applicant’s desire to have leave to make further insurance, and that this permission might be expressed in the policy. But it was not so expressed, and the noncompliance with such an explicit request is almost as significant as "a refusal. And the assent and approval of the director was an approval only of the application, and did not constitute the contract, or any part of it.”
Worcester Bank v. Hartford Fire Insurance Co., 11 Cush. 265, 59 Am. Dec. 145, was an action upon a policy of fire insurance' containing a provision to the effect that, if the insured should obtain subsequent insurance without giving the company notice thereof, and having the same indorsed on the policy or otherwise acknowledged in writing, the policy should cease, and be of no further effect. The insured obtained subsequent insurance, and exhibited a memorandum thereof to the agent of the company. The agent took the memorandum to make entry of the subsequent insurance upon his book of policies, and returned it to the insured, saying that he had made the entry, and that it would be the same as if indorsed upon the policy. In fact, the agent did not enter on his book all the subsequent insurance mentioned in the memorandum. Upon the au*503thority of Forbes v. Agawam Mutual Fire Insurance Co., supra, itf was held that the stipulation in the policy was not complied with, and that the policy was void.
Walsh v. Hartford Fire Insurance Co., 73 N. Y. 5, was an action upon a policy of fire insurance containing a provision to the effect that, if the premises insured should become vacant by the removal of the owner or occupant, and so remain for more than 15 days without notice to the company and consent indorsed upon the policy, the same should become void; and that no officer, agent, or representative of the company should be held to have waived any of the terms and conditions of the policy unless the waiver should be indorsed thereon in writing. The premises became vacant, and remained so for more than 15 days. The insured notified the company’s agent that the premises had become vacant, requested him to consent to their remaining so, and inquired if it was necessary that the consent be indorsed on the policy. The agent gave his consent, and made a memorandum thereof in his register, but stated that it was not necessary to indorse the same upon the policy, and no such indorsement was made. The court, referring to the provision in the policy, said :
“This is a plain limitation upon the power of agents, and can mean nothing less than that agents shall not have the power to waive conditions except in one mode, viz., by an indorsement on the policy. The plaintiff is presumed to have known what the contract contained, and the proof tends to the conclusion that this provision was brought to his notice. He saw fit, however, to accept the assurance of the agent that an entry in the register was sufficient. It is difficult to see how, upon the law of contracts and agency, the plaintiff can recover. The entry in the register was not an indorsement on the policy. The oral consent was an act in excess of the known authority of the agent. The provision was designed to protect the company against collusion and fraud, and the dangers and uncertainty of oral testimony. The case seems to be a hard one for the plaintiff; but courts cannot make contracts for parties, nor can they dispense with their provisions.”
It follows, as before indicated, that the proper determination of the question whether the incumbrance created by the chattel mortgage was assented to by the company’s agents depends entirely upon the true meaning and interpretation of the loss payable indorsement placed by them upon the policy. That indorsement reads: “Subject to all the conditions of this policy, loss, if any, payable to G. B. Dodge and A. M. Stevenson as their interest may appear.” Could the insurance company, consistently with a purpose to insist upon and enforce all the conditions of the policy, agree to pay the loss, if any, to Dodge and Stevenson as their interest may appear? If it could, that is plainly what was done. The indorsement does not mention the chattel mortgage, it does not describe Dodge and Stevenson as chattel mortgagees, and it does not-show that the attention of the parties was directed to the chattel mortgage. All this is conceded, and the contention of the plaintiffs, as stated in the brief of counsel, is this :
“The language of the indorsement is absolutely broad and embracive. The language is, ‘As their interest may appear.’ This is limited only by their ability to make their interest appear. Whatever interest they may be able, by proper proofs and in the proper manner, to make it appear that they *504possess, necessarily comes within the meaning and terms of this indorsement. The greater includes the less, and if, at the time of the loss, their interest is made to appear to be that of mortgagees, such interest is necessarily included in the terms of this indorsement.”
Doubtless this would be a proper interpretation of the words “as their interest may appear,” if they stood alone or were controlling. They are plainly prospective, and refer, not to an interest existing at the time when the indorsement was written, but to such interest as may appear at the time of the loss, if any, without regard to the character of the interest, or the time when it may have arisen. The interest referred to is not an interest in the property insured, but is an interest in the payment of the loss, whether predicated upon an interest in the property or otherwise. In this respect the terms of the indorsement may be properly said to be “broad and embracive.”
But the question under consideration is not solved by merely ascertaining the meaning of the words “as their interest may appear.” They do not'stand alone, and are not controlling. By the plain terms of the indorsement the consent to pay the loss to Dodge and Stevenson was made “subject to all the conditions” of the policy. This qualifying clause means that the consent was given upon the express condition that the conditions of the policy were not thereby abrogated or waived, but that they should have effect and be respected in like manner as if the indorsement had not been made. It means that a loss, to be payable to Dodge and Stevenson under the indorsement, must be one which, under the conditions of the policy, would be payable to the insured, and that whatever, under those conditions, would defeat the insured’s right to payment in the absence of the indorsement, will equally defeat it in the presence of the indorsement. True, if the terms of the indorsement were conflicting — that is, if the appointment of Dodge and Stevenson to receive payment of the insured’s loss, if any, was necessarily inconsistent with any condition in the policy — a familiar rule would require that, to the extent of the inconsistency, controlling effect should be given to that appointment, rather than to the qualifying clause. But is there any such conflict? If not, effect must be given to both the appointment and the qualifying clause, if it can reasonably be done, as it is not permissible to assume that any of the words of the indorsement were employed carelessly, or to no purpose. In respect of this the contention of the plaintiffs is that by the use of the words “as their interest may appear” it was assumed and recognized that Dodge and Stevenson had or might have an interest in the payment of the loss, if any should occur, and therefore that consent was impliedly given to any act by which, an interest had been or should be acquired, even though it be one which otherwise would avoid the policy; in other words, that consent was. impliedly given to any sale of the property insured which had been or should be made to Dodge and Stevenson, and to any chattel mortgage of the personalty which had been or should be given to them, and to any sale to them of the property which had been or should be made on legal process, and to any assignment to them *505of the policy which had been or should be made. It is not easily ■conceivable that an indorsement which so distinctly declared a purpose to insist upon and enforce “all the conditions” of the policy was really intended to abrogate or waive so many of them. Moreover, it was not essential that any act violative of the conditions of the policy should have occurred or should occur to give Dodge and Stevenson an interest in the payment of the loss. They were creditors of the insured and mortgagees of the insured realty, both of which were consistent with the conditions of the policy, and either of which gave them a sufficient interest in the payment of any loss sustained by the insured to support the loss payable indorsement. There was therefore no necessary inconsistency between the assumption and recognition in the indorsement that Dodge and Stevenson had or might have an interest in the payment of such loss, and the express reservation to the company of the right to insist upon and enforce all the conditions of the policy. In these circumstances it cannot be reasonably said that the words “as their interest may appear” impliedly gave consent to any act violative of the conditions of the policy. A more reasonable view of the office performed by these words is that they define the contingency in which and the extent to which — consistently with the conditions of the policy — the insured’s loss, if any should be sustained, was intended to be made payable to Dodge and Stevenson. Without these words in the indorsement, the whole loss would be payable absolutely to Dodge and Stevenson without any showing of an interest on their part or of its extent. They are words of restriction, not •of enlargement.
The purpose and effect of loss payable indorsements upon policies ■of insurance have frequently been considered in the courts, and, in the absence of some provision to the contrary, it has been quite uniformly held that such an indorsement is a mere appointment of .a payee to receive payment of the insured’s loss, and does not create a new contract of insurance with the payee, or abrogate or waive any condition of the policy.
Bates v. Equitable Insurance Co., 10 Wall. 33, 19 L. Ed. 883, was an action upon a policy of fire insurance containing a provision that, if the property insured should be sold or conveyed, or the policy be assigned, without the consent of the company, the policy should become void. Philbrick, the insured, sold the property to Bates, and wrote upon the policy, “Payable, in case of loss, to E. C. Bates.” The company then caused an indorsement to be written under that of Philbrick, saying, “Consent is hereby given to the above indorsement.” The defense was that the sale of the property was without the consent of the company, and avoided the policy, and the plaintiff insisted that notice of the sale and consent thereto was implied by the indorsements. It was said by Mr. Justice Miller, who delivered the opinion of the court:
“If Philbrick could not, in law or in fact, have directed the payment of the loss, if one should occur to him, as owner of the property, to another party, with the consent of the company, then it would be a reasonable inference that •.the indorsement made by him implied a sale of his interest. But if he could *506make, with the consent of the company, a valid appointment that any loss covered by the policy should be paid to a third person, though he remained the owner of the goods, and the loss was his loss, then the indorsement of Philbrick does not necessarily convey the idea of a sale, nor the consent of the company imply a consent to a sale. Now, it is a well-known and frequent thing in insurance business for a person to insure his life or his property, and either in the policy itself, or by indorsement at the time it is made, or by subsequent indorsement, to which the consent of the company is generally required, to direct the loss to be paid to some third party. And this is done in language similar, if not identical with that used in this case. It is a mode of appointing that the loss of the party insured shall be paid by the company to such third person. This transaction is a very common mode of furnishing a species of security by a debtor to his creditor, who may be willing to trust to the debtor’s honesty, his skill and success in trade, but who requires indemnity against such accidents as loss by fire or the perils of navigation. The property of the debtor at risk being thus insured for the benefit of the creditor, gives him this indemnity. In the face of this frequent use of the two indorsements on the policy, it cannot be held that they imply of themselves a knowledge of the sale or a consent to insure the purchaser.”
In Ermentrout v. American Fire Ins. Co., 60 Minn. 418, 62 N. W. 543, it was said:
“In cases where the loss is ‘payable to the mortgagee’ it is an absolute appointment of the mortgagee as payee of the whole loss, and a direction to pay it to him. * * * But, where the policy provides that the loss shall be payable to the mortgagee, or, as in this case, to his assignee, ‘as his interest may appear,’ it is neither an assignment of the policy nor an absolute appointment of the mortgagee as payee of the whole or any part of the loss, but a limited and conditional appointment to receive payment of the loss to the extent of his interest, if any is made to appear.”
In Brunswick Savings Institution v. Commercial Union Insurance Co., 68 Me. 313, 28 Am. Rep. 56, it was said:
“The clause in the policy, ‘payable in case of loss to the Brunswick Savings Institution to the amount of mortgage held by them,’ is not an insurance of the plaintiffs’ interest in the property, nor an assignment of the policy to the plaintiffs. It is merely a contingent order or stipulation, assented to by the defendants, for the payment of the loss of the assured, if any, to the plaintiffs. It gives the plaintiffs the same right to recover that the assured would have if no such clause had been inserted in the policy. Any violation of the conditions and stipulations of the policy which would defeat the right of the assured to recover upon it will defeat the right of the plaintiffs.”
In Wunderlich v. Palatine Fire Insurance Co., 104 Wis. 395, 402, 80 N. W. 471, it was said of a provision that the loss should be payable to a third person as his interest might appear:
“The rights of a claimant under this familiar clause, where the title and ownership of the property remains in the assured, are no longer open to> doubt or debate in this state. They were settled by Chandos v. Am. F. Ins. Co., 84 Wis. 184, 54 N. W. 390, 19 L. R. A. 321; Carberry v. German Ins. Co., 86 Wis. 323, 56 N. W. 920; and Williamson v. Mich. F. & M. Ins. Co., 86-Wis. 393, 57 N. W. 46, 39 Am. St. Rep. 906. The contract is with the assured. To him alone is the insurer liable, and upon his acts will that liability depend. The claimant under such a provision is not an assignee of the policy, so as to hold an independent right of recovery, but a mere appointee to receive the whole or a part of the money which the assured is entitled to recover, but to receive it under and in the right of the assured.”
Scania Insurance Co. v. Johnson, 22 Colo. 476, 45 Pac. 431, was an action on a policy of fire insurance containing a provision declaring *507the policy void if the property insured be sold without the consent of the company indorsed on the policy, and containing the further provision: “Loss, if any, payable to Mrs. H. Johnson as her interest may appear.” When the policy was issued, Mrs. Johnson held a mortgage upon the property, and subsequently the insured unconditionally conveyed the property to her, but no consent to the sale was indorsed on the policy. It was said by Mr. Justice Campbell, who delivered the opinion of the court:
“It was the mortgagor’s property and her interest therein which were insured, and the effect of the language quoted was merely an appointment of Mrs. Johnson to receive the amount of any loss that might occur. Any act of the mortgagor in violation of the terms of the policy against a sale thereof would defeat not only the right of the mortgagor to a recovery, but also a recovery by the mortgagee. * * * The sale of this property by the assured without the consent of the company was a violation of the conditions of the contract which, by an express provision, invalidated the policy. At the time of the fire the mortgagor had parted with all of her interest in the property, and had transferred the title. She therefore suffered no loss as the result of the fire, and, as the mortgagor cannot recover, neither can the mortgagee.”
Delaware Insurance Co. v. Greer, 57 C. C. A. 188, 190, 191, 193, 120 Fed. 916, 918, 919, 921, 61 L. R. A. 137, was an action upon a policy of fire insurance containing a provision to the effect that, unless otherwise provided by agreement indorsed upon the policy or added thereto, the entire policy should be void if, with the knowledge of the insured, foreclosure proceedings be commenced, or notice be given of sale of any property covered by the policy by virtue of any mortgage or trust deed. An indorsement was written upon the policy making the loss, if any, payable to certain mortgagees, as their interest might appear. Proceedings to foreclose these mortgages were thereafter commenced with the knowledge of the insured, but consent of the insurance company thereto was not obtained. The defense to the action upon the policy was that the commencement of the foreclosure proceedings with the knowledge of the insured avoided the policy, and the plaintiffs contended that by consenting to make the loss, if any, payable to the mortgagees as their interest might appear the company had impliedly consented to whatever was essential to make the mortgages effective, and had thus waived the condition against foreclosure proceedings. Judge Sanborn, in delivering the unanimous opinion of the court, said:
“They argue that a mortgage is an incident of a debt; that the right to foreclose is an attribute of a mortgage; that, when the insurance company agreed that the loss should be paid to the mortgagees as their interest might appear, they thereby consented to the exercise by them of their right to foreclose ; and from these premises they draw the conclusion that the mortgagees were thereby excepted from the provision of the policy that it should be void if foreclosure proceedings were commenced with the knowledge of the insured. The soundness of the premises upon which counsel base their contention is conceded, but the alleged conclusion does not follow. On the other hand, the plain reading of the clauses of the policy is, and the evident intention of the parties to the contract was, in the first place, to concede the right of the mortgagees to foreclose their mortgage, and in view of this situation to clearly provide what the rights and relations of the parties should be if the *508mortgagees exercised their right to commence their proceedings to foreclose. .The parties to the policy, in other words, recognized the right of the mortgagees to enforce the terms of their mortgage, and provided in plain terms that if they commenced proceedings for that purpose, and these proceedings came to the knowledge of the insured, the policy should be void. * * * The true construction of the clause, ‘Loss, if any, payable to -, mortgagee, as his interest may appear,’ or of words of similar import, when attached to policies of fire insurance, is, and has been for more than 40 years, that the mortgagee is thereby made the simple appointee of the mortgagor, and that his indemnity is at the risk of the acts and omissions of the latter which would avoid, terminate, or affect the mortgagor’s insurance under the original policy. * * * The result is that, unless otherwise provided by agreement indorsed on or added to the policy, the insurance of a mortgagee under the customary clause, which reads, in substance, ‘Loss, if any, payable to -, mortgagee, as his interest may appear,’ ceases if foreclosure proceedings are instituted against the mortgagor, and the latter knows that they have been commenced, at any time before the fire which causes the loss occurs.”
The conclusion, enforced by the plain terms of the policy and of the indorsement, and by settled rules of decision, is that the purpose and effect of the indorsement was to make Dodge and Stevenson the simple appointees of the insured to receive payment of any loss payable to the insured under the original policy, and to receive it not absolutely, but to the extent of any interest which at the time of the loss they might have in such payment, ■consistently with the due observance by the insured of all the conditions of the policy; that the indorsement did not in terms or by implication consent to the incumbrance created by the chattel mortgage, and that in consequence the policy was avoided by that incumbrance.
Nor is there anything in the opinion in Hagan v. Scottish Insurance Co., 186 U. S. 423, 22 Sup. Ct. 862, 46 L. Ed. 1229, which is inconsistent with this conclusion or with the cases in the Supreme Court to which reference has been made. That was a libel in admiralty upon a policy of marine fire insurance, of which the •court said:
“It is to be observed, in the first place, that the policy in question covers property on the water, viz., a tugboat; yet the printed portion of the policy ■shows that it was intended generally to be used for insuring property on land. A marine policy was made out upon blanks not intended for that kind of insurance. Consequently many of the printed provisions were wholly inS-applicable to insurance of property on the water.”
In the printed portion was a condition declaring the policy void if, without the consent of the company indorsed upon or added to the policy, the interest of the insured be other than unconditional and sole ownership, or if there be any change in interest or title ■by the voluntary.act of the insured; and in the written portion the insurance was made to run to “Peter Hagan and Company for account of whom it may concern.” Before the loss, Hagan, who obtained the policy, sold an interest in the tugboat to another, who held that interest at the time of the fire. The consent of the insurance company to the change in ownership was not obtained. In denying the contention of the company that the sale avoided the *509policy, the court referred to the fact that in marine insurance the words “for account of whom it may concern” are used to designate not merely the person taking out the policy, or the owner at the time it is issued, but any person having an insurable interest in the property at the time of the loss who adopts the insurance; and it was said:
“The decision of this ease turns upon the significance to be given to the written provision of the policy which provides for insuring ‘Peter Hagan and Company for account of whom it may concern.’ * * * Where a marine policy is thus taken out upon a blank policy providing by many of its terms for insurance on property or goods on land, it becomes doubly important to keep, and apply with' strictness, the rule that the written shall prevail over the printed portion of a policy, as in such case the written, even more clearly than usual, will evidence the real contract between the parties. Courts will not endeavor to limit what would otherwise be the meaning and effect of the written language by resorting to some printed provision in the policy, which, if applied, would change such meaning and render the -written portion substantially useless and without application. * * * If the policy were to become void in ease of a transfer of all or any part of the interest of the person taking out the insurance unless the company were notified and provided by agreement indorsed on the policy for such change, we do not see that any alteration in its terms and meaning was accomplished by the insertion of the phrase in question. By the interpretation contended for by the company, it would have the same right, if the written provision were contained therein, to refuse to otherwise provide by agreement for the transfer of an interest that it would have if such provision were stricken out, and the terms of the policy would in truth be unaltered by the insertion of that provision. We think this would be a totally different result from that contemplated by the parties. The words ‘on account of whom it may concern’ do not refer to those interested in the policy simply at the time it is taken out. The terms refer to the future. It is not a question of the persons concerned when it is taken out, but of those who may be concerned when the loss may occur, and who were within the contemplation of him who took out the insurance at the time that he did so. It is on account of those who in the future, at the time of the happening of a loss, have the insurable interest and in regard to whom the policy will be applied. * * * We think the written portion is inconsistent with the printed condition as to change of interest and as to sole ownership, and, there being such inconsistency, the written portion must be held to cover the assignee of a part interest in the tug, as intended at the time by the party taking out the insurance.”
The distinguishing features of that case are manifest. Two may deserve special mention at this time. The written portion of the policy did not contain any language evincing a purpose to insist upon and enforce all the conditions of the policy, as does the indorsement here under consideration. The written and printed portions of that policy were so conflicting that a material part of the written portion would be altogether inoperative if effect were given to the printed portion. There is no such conflict in the present case.
The judgment is affirmed;