Court Opinion

ID: 6413844
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:54:39.981732+00
Date Added: 2024-06-11T15:51:28.142982
License: Public Domain

Dewey, J.
The legal effect of the contract entered into between the plaintiffs and the defendants was to create a contract of insurance in favor of the former. It was not a case of a mere assignment of the interest of the original parties to the policy. Gibbs & Jenney had by the proceedings in insolvency parted with their interest in the vessel insured. The plaintiffs, their assignees, did not thereby succeed to any interest in the policy of insurance issued to Gibbs & Jenney. They could only effect this object by a policy to themselves. This required a new and independent consideration moving from themselves; and they became personally responsible for the payment of the premium notes, and agreed to pay the same. This being *232accepted by the defendants, the plaintiffs became the parties insured.
In the case of Foster v. Equitable Ins. Co. 2 Gray, 216, it was held that the effect of such assumption of the premium note by a mortgagee, in connection with the continuing of the policy in his favor, was to create a new, substantive and distinct contrac' of insurance with the mortgagee. This assumption and guaranty of the premium notes distinguishes the present case from the numerous cases of a naked assignment of the interest of the person originally insured.
By thus adopting new parties as the assured, the defendants have lost all right they might have had originally to deduct from any loss which they might be liable to pay on the policy, the sums due from Gibbs & Jenney to them on other dealings.
The clause in the policy relied upon as authorizing such deduction before paying the loss cannot, under the contract as it exists between the present parties, have that effect. The set-off thus claimed must be disallowed.

Judgment for the plaintiffs.