Court Opinion

ID: 9524355
Source: CourtListenerOpinion
Date Created: 2023-08-07 02:52:03.35072+00
Date Added: 2024-06-11T13:09:42.690868
License: Public Domain

NEAL, Judge,
dissenting.
I respectfully dissent.
The essence of this case is as follows: Ponderosa, by the terms of its lease, was required to rebuild in case of fire, and purchased a policy of insurance protecting that obligation. The policy was payable to First National, the mortgagee, and the Lovings, the mortgagors, as their interests appeared. The obvious purpose of the entire arrangement was to protect the security of the bank, and the property interests of the Lov-ings. According to the majority holding, the end result was: (1) the bank’s debt was satisfied, (2) Lovings own a new building free of the mortgage, and (3) Ponderosa gets no benefit from its own policy. In effect, as concerns us here, Lovings have received a double recovery to the extent of the unpaid balance on the mortgage.
A thread runs throughout the law that there is only one recovery for a loss whether in contract or in tort. One full recovery is permitted against one or all joint tort feasors or joint obligors on a contract. See Cooper v. Robert Hall Clothes, (1979) Ind., 390 N.E.2d 155. See also 9 I.L.E. Damages § 21 et seq.
*910As a general rule property insurance creates a contract of indemnity. Hence, both the extent and the limits of recovery are found in the concept of making good the loss which the insured has sustained. A fire insurance policy does not entitle the insured to any more than indemnity for the actual loss sustained; it only places him in the same financial condition he would have been in if no fire had. occurred. Couch on Insurance 2d § 54:4. See Travelers Indemnity Co. v. Armstrong, (1982) Ind., 442 N.E.2d 349; 45 C.J.S. Insurance § 915; see also 16 I.L.E. Insurance § 315. Recovery on several insurance policies covering the same interest in property is restricted to one recovery, the actual loss. Couch, supra, § 62:1. In order for an insurance policy to be valid, the insured must have an insurable interest in the property. Such an interest exists if the insured derives pecuniary benefit or advantage from the preservation or the continued existence of the property, or if the insured will sustain pecuniary loss by its destruction. All Phase Construction Corporation v. Federated Mutual Insurance Company, (1976) 168 Ind.App. 19, 340 N.E.2d 835; 44 C.J.S. Insurance 175(b); Ap-pleman, Insurance Law and Practice § 2123. If there is no insurable interest, or if the property is doubly insured, the policy is in effect a gambling contract and is void as against public policy. Appleman, supra, § 2121. Gambling contracts are void for the reason that “such policies have a tendency to create a desire for the event” insured against and furnish strong temptation to bring it about. 44 C.J.S. Insurance § 243.
The construction placed upon the contracts in this case clearly permits Lovings a double recovery for the destruction of their own property. I am of the opinion that such recovery is prohibited as against public policy, and the documents herein should be interpreted in that light.