The Cont'l Ins. Co. v. Cox

• Decision Date: 30 June 1879
• Citation: 1879 WL 8492,34 Am.Rep. 122,92 Ill. 145
• Court: Illinois Supreme Court
• Parties: THE CONTINENTAL INSURANCE COMPANYv.HULMAN & COX.

92 Ill. 145

1879 WL 8492 (Ill.)

34 Am.Rep. 122

THE CONTINENTAL INSURANCE COMPANY

v.HULMAN & COX.

Supreme Court of Illinois.

June Term, 1879.

OPINION TEXT STARTS HERE

APPEAL from the Circuit Court of Effingham county; the Hon. JAMES C. ALLEN, Judge, presiding.

Messrs. GILMORE & WHITE, for the appellant:

The policy in this case was a contract between the appellant company and Sarah J. and John Ryan. Hulman & Cox were not parties to the contract.

The insertion of the words, “loss, if any, payable to Hulman & Cox,” etc., in the policy, does not amount to an assignment of the policy. Flanders on Fire Insurance, 441; Grosvenor v. Atlantic Ins. Co. 17 N. Y. 419; Frink v. Hampden Ins. Co. 45 Barb. 384; Russ v. Waldo Mutual Ins. Co. 52 Me. 187. In Home Fire Ins. Co. v. Hauslein, 60 Ill. 523, Justice THORNTON said: “But it is contended that the memorandum that the loss, if any, should be payable to the assignee as his interest might appear, shows that his interest was intended to be protected, and that there was no sale or change of title affecting the interest of the assignee. The insured can not sue, because he has so acted as to forfeit the policy. The assignee can not sue, for he was not a party to the contract originally. In its nature the policy was only assignable so as to pass an equitable interest to the assignee. Even, as in this case, where the assignment was made with the consent of the company, the assignee can not sue for a breach, in his own name.” Jessel v. Williamsburg Ins. Co. 3 Hill, 88; Illinois Fire Ins. Co. v. Stanton, 57 Ill. 356; New England F. and M. Ins. Co. v. Wetmore, 32 Id. 321.

Making the “loss, if any, payable to Hulman & Cox, mortgagees,” is not an insurance of their mortgage interest in the property. It is merely a designation of the person to whom it is to be paid. It is the damage sustained by the party insured, and not by the party appointed to receive payment, that is recoverable from the insurers. The insurance being upon the interest of the insured, if he parts with that interest before the fire no loss is sustained by him, and of course none is recoverable by his assignee or appointee. It is a contingent order or assignment of what may become due under the contract, and not an absolute transfer, by virtue of which the assignee acquires the full rights of an assignee of a chose in action. Flanders on Fire Insurance, 441.

The mortgagees, whether regarded as the assignees of the legal rights of the assured, or as merely holding the equitable right to the money, as their interest might appear, were still subject to the conditions of the policy. Illinois Mutual Fire Ins. Co. v. Fix, 53 Ill. 163; Home Mutual Fire Ins. Co. v. Hauslein, 60 Ill. 522.

Other insurance, either prior or subsequent, in violation of a condition of the policy, without notice to or consent of the insurer, will avoid the policy. Illinois Mutual Fire Ins. Co. v. Fix, 53 Ill. 151; Carpenter v. Prov. Wash. Ins. Co. 16 Pet. 495; Bigler v. N. Y. Central Ins. Co. 22 N. Y. 402; Couch v. City Fire Ins. Co. 38 Conn. 181; Shurtleff v. Phœnix Ins. Co. 57 Me. 137; Harris v. Ohio Ins. Co. Wright, 544, S. C., 5 Ohio, 466; Battaile v. Merchants' Ins. Co. 3 Rob. (La.) 384; Illinois Mutual Ins. Co. v. Malloy, 50 Ill. 419; Campbell v. Ætna Ins. Co. Cochran, 21.

Mr. HENRY B. KEPLEY, for the appellees:

The insertion of the words “loss, if any, payable to Messrs. Hulman & Cox, of Terre Haute, Indiana, mortgagees, as interest may appear,” in the policy, gave appellees, Hulman & Cox, the right to maintain suit upon the policy in their own names, and recover the full amount due by reason of any loss that occurred under said policy. May on Insurance, pp. 457, 458, 459, sec. 378, and pp. 544, 545, secs. 446, 447; Mowry v. Todd, 12 Mass. 281; Motley v. Manufacturers' Ins. Co. 29 Me. 337; Ripley v. Ætna Fire Ins. Co. 29 Barb. (N. Y.) 552; Ennis v. Harmony Fire Ins. Co. 3 Bosw. (N. Y.) 516; Barret v. Union Mut. Ben. Life Ins. Co. 7 Cush. (Mass.) 175; Lowell v. Middlesex Mut. Fire Ins. Co. 8 Cush. (Mass.) 127; Loring v. Manufacturers' Ins. Co. 8 Gray (Mass.) 28; Rogers v. Traders' Ins. Co. 6 Paige Ch. 583; Cone v. Niagara Ins. Co.17 Howard Pr. 444; Jefferson Ins. Co. v. Cotheal, 7 Wend. 72; Hadly v. New Hampshire Fire Ins. Co. 55 N. H. 110; Chamberlain v. New Hampshire Fire Ins. Co. 55 N. H. 249; Sansum's Digest Law of Insurance, p. 51, sec. 5, p. 59, secs. 2, 5, 6, 7, 9, 13, 15.

There was not, in any proper sense, a double insurance in this case. There being two or more policies upon the same property does not necessarily render either void on account of other insurance without notice, or become in law double insurance. To have this effect the assured must be the same and the interest protected by both policies the same. That is double insurance where both policies cover the same insurable interest against the same risk. It is also a general rule that they must be in the name of the same assured. 2 Parsons on Contracts, 459.

It is additional and valid insurance prior or subsequent, upon the same subject, risk and interest, effected by the same assured, or for his benefit, and with his knowledge or consent. Owners of different interests in the same property may respectively insure their interests without risk of violating a provision against other insurance. May on Insurance, pp. 438, 445, sec. 365, and cases there cited; Ætna Ins. Co. v. Tyler, 12 Wend. 507; same case affirmed in 16 Wend. 387; Sloat v. Royal Ins. Co.49 Penn. St. 14; Forbush v. West Massachusetts Ins. Co. 4 Gray, 337; Harris v. Ohio Ins. Co. 5 Ohio, 467; Flanders on Fire Insurance, 41.

The interests of the mortgagor and mortgagee are distinct, and each may be insured without one policy avoiding the other. May on Insurance, p. 82, secs. 82, 83; Fox v. Phœnix Fire Ins. Co. 52 Me. 333; Traders' Ins. Co. v. Robert, 9 Wend. 304; Jackson et al. v. Mass. Fire Ins. Co. 23 Pick. 418; 1 Bennet's Fire Insurance Cases, 764.

The additional insurance must be valid. Subsequent insurance void by its own terms, because it is additional and without notice of prior insurance, is no insurance, within the meaning of the usual condition against other insurance. May on Insurance, 338.

The general principle of law may be stated as follows: In order to avoid a policy on account of a subsequent insurance against an express condition therein, it must appear that such subsequent insurance is valid, and that the policy upon which it is made is capable of being enforced. If it can not be enforced it is no breach of the prior policy. Hubbard v. Hartford Fire Ins. Co. 33 Iowa, 325; May on Insurance, pp. 438, 445, sec. 365; Gale v. Belknap County Ins. Co. 41 N. H. 170; New England Fire Ins. Co. v. Schettler, 38 Ill. 166; Jackson v. Massachusetts Mutual Fire Ins. Co. 1 Bennet's Fire Insurance Cases, 764, and cases there cited; 23 Pick. 418; Clark v. New England Fire Ins. Co. 6 Cush. 342; Hardy v. Union Mutual Fire Ins. Co. 4 Allen, 217; Jackson v. Farmers' Mutual Fire Ins. Co. 5 Gray; Stacy v. Franklin Fire Ins. Co. 2 Wend. & S. 506; Mitchell v. Lycoming Ins. Co.51 Penn. St. 401; Flanders on Fire Insurance, 49, 50.

So, also, the additional insurance must be in force at the time of the loss, or it will not affect the policy sued upon. If the policy upon which the claim of other insurance is based, whether prior or subsequent, has for any reason-- whether by forfeiture, or expiration, or cancellation--ceased to be in force before the occurrence of the loss under the policy sued upon, the fact that there had been such a policy does not affect the policy sued upon, nor defeat the action thereon. New England Fire Ins. Co. v. Schettler, 38 Ill. 166; May on Insurance, 440.

Mr. MELVILLE W. FULLER, for the appellant, in reply:

The clause in the policy, “loss, if any, payable to Hulman & Cox, mortgagees, as interest may appear,” is not a contract insuring the interest of the mortgagees,--the loss spoken of is the loss of the assured. The ruling sustaining this obviously proper construction in Grosvenor v. Atlantic Fire Insurance Co. 17 N. Y. 391, has been fully approved by this court. Ill. Mut. Fire Ins. Co. v. Fix, 53 Ill. 151; Ill. Fire Ins. Co. v. Stanton, 57 Id. 356; Home Fire Ins. Co. v. Hauslein, 60 Id. 52. And to same effect are Franklin Savings Institution v. Central Mut. Fire Ins. Co. 119 Mass. 240; C. F. & M. I. Co. v. H. S. & L. M. Co. 31 Mich. 355; Bates v. Eq. Ins. Co. 10 Wall. 33; Bidwell v. Northwestern Co. 19 N. Y. 179.

In Franklin Savings Institution v. Central Mutual Fire Ins. Co. 119 Mass. 240, the court say: “The plaintiffs held a mortgage on the property, and on the day after the policy issued an indorsement was made upon it that it was to be payable, in case of loss or damage, to them, ‘as their mortgage claim may appear.’ It has been repeatedly held by this court that such an indorsement does not operate as an assignment of the policy, nor as a contract to insure the interest of the mortgagees, but that they can claim only what the party originally insured is entitled to recover under his contract.” Fogg v. Middlesex Mutual Ins. Co. 10 Cush. 337; Hale v. Mechanics' Mutual Ins. Co. 6 Gray, 169; Loring v. Manufacturers' Ins. Co. 8 Gray, 28. The case at bar falls within these decisions, and is clearly distinguishable from Foster v. Equitable Ins. Co. 2 Gray, 216, upon which plaintiff relies.

As to what is “other insurance,” see Mussey v. Atlas Mut. Ins. Co. 14 N. Y. 79. In that case COMSTOCK, J. said: “An over insurance obtained by one of the parties interested in the first policy is quite as dangerous to the underwriter as it would be if procured by all of them. There is the same temptation to fraud, and the same mischiefs are likely to arise.”

The same principle, under a somewhat different state of facts, was applied in Ogden v. East River Ins. Co. 50 N. Y. 389. In that case a specific parcel of property was insured by a policy containing a clause as to ““other” insurance, and the same property was...