Stearns v. Quincy Mut. Fire Ins. Co.

• Decision Date: 05 February 1878
• Citation: 124 Mass. 61
• Parties: George P. Stearns v. Quincy Mutual Fire Insurance Company
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

124 Mass. 61

George P. Stearns v. Quincy Mutual Fire Insurance Company

Supreme Court of Massachusetts

February 5, 1878

Argued October 4, 1877

Worcester.

Judgment for the defendant.

G. A Torrey & H. Bailey, for the plaintiff.

W. A Field, for the defendant.

Colt J. Endicott & Lord, JJ., absent.

OPINION

Colt, J.

This is an action of contract to recover upon a policy of fire insurance on the plaintiff's dwelling-house and furniture. It is brought in the name of the plaintiff by one Andrews, who claims to have an equitable lien upon the money due on the policy, to the extent of his interest as mortgagee of the real estate. This claim on the part of Andrews is founded on a clause in the condition of the mortgage from Stearns, the plaintiff, to him, which declares that if the mortgagor shall, until payment of the debt secured, keep the building, standing on the land, insured against fire for the benefit of the mortgagee, at such offices as he shall approve, and perform the other conditions named, then the deed shall be void. At the time the policy was issued, the insurance company had no knowledge of the terms of the mortgage, although in the month of June before, they did know that Andrews had a mortgage on the property. The policy, when taken out, was kept by Stearns until after the fire, and was never delivered to Andrews; nor was there any agreement between them in reference to insurance, or an assignment either of the policy or of the claim against the company for the loss, either before or after the fire, except that which is implied in the condition of the mortgage. It does not appear that Andrews approved of the insurance in this company, or had any knowledge of it until after the loss.

After the fire, Andrews gave notice of his claim to the company, but it paid the amount of the loss to Stearns, before this action was brought. This payment is contended by Andrews to have been wrongfully made; and the question is, whether Andrews, suing in the name of the plaintiff, can also recover the same to his own use and benefit.

The plaintiff relies on the rule, that, where a promise is made by one person to procure insurance upon property, in which another has some interest, for the benefit of the latter, and then the promisor, with the intention of performing his promise, obtains a policy of insurance in his own name, the party intended to be benefited will have an equitable lien on the policy and its proceeds, which he may enforce against the insurer or the promisor, or may maintain against the creditors of the latter. This rule, and the lien thus created, it is said, will be regarded and enforced both at law and in equity.

In Providence County Bank v. Benson, 24 Pick 204, a party expressly agreed to obtain insurance, for the benefit of the owner, on a quantity of wool at his mill, then in process of manufacture; he accordingly obtained such insurance in his own name, but, as the case found, with the sole purpose and intention of performing his agreement; and, before the loss, he informed the owner of the wool that he had effected the insurance as agreed. It was decided that the owner had an equitable interest in the policy, which was equivalent to that of an assignee of a chose in action, and was sufficient to enable him to hold the avails against an attaching creditor of the party in whose name the policy was issued. The fact that in the transaction there was an intention to comply with the agreement in effecting the insurance, and the fact that the owner was informed of it before the loss, are recognized in the opinion by Mr. Justice Dewey, as important elements in the decision...