Court Opinion

ID: 5549394
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:29:55.109264+00
Date Added: 2024-06-11T08:35:01.461317
License: Public Domain

The Vice-Chancellor :
By the policy of insurance in question, the Mutual Insurance Company insured Blake against loss and damage by fire—he being the owner of the premises at the time of the contract.
By an assignment of the policy to Kip, the mortgagee of Blake, made with the consent of the company, it enured to the benefit" of the former as collateral security for the payment of his mortgage debt. This was the only object of the assignment to Kip. In case of loss, he was to receive payment on the policy and then, as between himself and Blake, he was to apply the money towards liquidating the mort*95gage—or if Blake should, himself, pay off the mortgage, he would be entitled to a return or re-assignment of the policy from Kip and could then receive the insurance money himself.
But to entitle Blake to the benefit of the policy in case of loss, either for the purpose of liquidating his mortgage-debt or for his own indemnification after he should have paid off that debt and entitled himself to a return of the policy, it was essential that he should remain the owner of the premises insured.
The sale of the property by Blake to Bloodgood put an end to the contract of insurance as between Blake and the company, except so far as Kip’s right to it extended by way of collateral security as before mentioned. That right no act of Blake’s or of the company could divest without Kip’s consent. He might still claim to hold the policy for the benefit of his security, which was all that remained of the contract after Blake had parted with all his interest in the property ; and if the company were obliged to pay Kip for a loss of the property insured, they, standing in the relation of sureties to him for so much of the mortgage debt, would be entitled, by subrogation, to the benefit of the mortgage for their reimbursement as sureties, after Kip should be paid in full. This would not be so if the contract of insurance still remained in force for the benefit of Blake. But it did not —his sale, as before observed, terminated it. Bloodgood, by becoming the purchaser, acquired no right to the policy of insurance or the benefit of it, unless Blake had assigned his reversionary interest in it to Bloodgood and the company had assented, thereby becoming, in effect, insurers to him.
The company never contracted to insure Bloodgood as the owner and they could not be made to do so by assignment from Blake or from Kip without their consent. These views appear to me to be sustained by the principle established in the case of The Ætna Insurance Company v. Tyler, 16 Wend. 285 and The Traders Insurance Company v. Robert, 9 Wend. 404 ; S. C. in Error, 17 Ib. 631. Mr. Blood-good became the owner of the premises before the loss by fire occurred, although the deed of conveyance appears not to have been actually delivered until after the fire. Still," *96he had an insurable interest as owner from the time of his contract of purchase. He however, took no measures to insure himself by virtue of the policy in question. And although this application is made confessedly on his behalf and for his benefit in the name of Kip, the mortgagee, yet he can have no better or more extensive right or equity than Kip could claim. If he was before the court on his own account claipiing the dividend which the receivers are enabled to make among the creditors of this insolvent company, he would be obliged to give them an interest in the mortgage for and towards their reimbursement. The present application appearing to be prosecuted for the benefit of Bloodgood and upon a bond of indemnity to Kip for the costs, must be denied with costs to be taxed and to be paid by Bloodgood • the ostensible party to it. And if Mr. Kip has any apprehension of an insufficiency of his mortgage security to pay his debt so as to deem it worth while to claim and receive a dividend upon the amount of the policy on the terms suggested, viz. admitting the receivers to take an interest in the mortgage for and towards their reimbursement out of the money to be derived from a foreclosure of the mortgage after Mr. Kip shall be paid and satisfied, he must be left to do so.