51 Ill. 409 | Ill. | 1869
delivered the opinion of the Court:
The appellant executed his note to Butter, Endicott & Whitehouse, for $2,146.50, and deposited with them, as collateral security, 14 barrels of whisky. They effected an insurance on the whisky in the Lamar Eire Insurance Company, appellees herein, at their own expense, and in-their own name, and without the authority, or even knowledge, of appellant. The whisky was subsequently destroyed by fire, and the company paid the policy to Butter, Endicott & Whitehouse, first requiring an assignment of appellant’s note. The note was accompanied by a power of attorney to confess a judgment, and the company having caused a judgment to be confessed, the appellant filed a bill to enjoin its collection. On the hearing the circuit court dismissed the bill.
If the insurance had been effected at the request or by the authority of appellant, or at his expense, or under circumstances that would make him chargeable with the premium, we should have no difficulty in holding him entitled to its benefits, by applying the money paid in extinguishment of so much of his debt. But none of these circumstances are presented by this record. The appellant prosecutes his appeal merely upon the ground that, in all cases where a mortgagee insures the mortgaged property, the mortgagor is entitled to the benefits of the policy.
This position is maintainable neither upon principle nor .authority. The contract of insurance, it has been often remarked, is one of indemnity merely. Any person having an interest in property may, through an insurance, indemnify himself against loss by fire. Mortgagor and mortgagee have each an insurable interest. The interest of both may be covered in one policy, or each may take out a separate policy. In this case the mortgagees insured at their own cost, without privity with the mortgagor and without his knowledge, and when the company paid the debt due them from the mortgagor, it indemnified them against loss and was entitled to be subrogated to their claim. The mortgagor, having had no connection with the insurance, can not claim its benefit. As the premium was not paid by-him or chargeable to him, as he was not aware even that an insurance had been effected until after the fire, it is difficult to see how such insurance, even when paid, can affect his liability upon his note. Even the case of King v. The State Mutual Fire Insurance Co. 7 Cush. 10, on which the appellant chiefly relies, holds that in such cases the liability of the mortgagor upon his note remains the same, but that the mortgagee may recover it for his own use, although already paid by fhe insurance company. Certainly it is much more consonant to every principle of equity to say that the debt may be recovered for the benefit of the insurance company, than that the mortgagee should be twice paid. The doctrine of that case would sanction wager policies, and furnish a dangerous temptation to incendiarism.
That the insurance company is entitled to be subrogated to the claims of the mortgagee, in such a case as the present, is held in Carpenter v. Providence Washington Ins. Co. 16 Pet. 501, Sussex Ins. Co. v. Woodruff, 2 Dutcher, 555, and Ætna Fire Ins. Co. v. Tyler, 16 Wend. 391. In Concord A. M. Ins. Co. v. Woodbury, 45 Maine 452, where the assured had voluntarily assigned his claim to the insurance company upon payment by it, as in the present case, the court held the company entitled, to recover. The question of the right to subrogation against the will of the mortgagee, was not presented in that case, nor is it in this, because the assignment was made by the mortgagee upon payment of the loss. The only question strictly presented here is, whether the mortgagor has been discharged from his debt by the payment of the mortgagee’s policy, and on this point there is no disagreement among the authorities. The debt is still in existence, and the strong equity of the insurance company has been united to the legal title.
The circuit court committed no error in dismissing the bill.
Decree affirmed.. ■