5 N.Y.S. 526 | N.Y. Sup. Ct. | 1889
The action was to recover the amount of a policy of insurance issued by the defendant upon the 19th of April, 1883, upon two five-story brick buildings, adjoining and communicating, and being 62 and 64 Rutgers Slip, $1,250 being insured upon each building. At the time when the policy was issued the property was owned by S. Ellis Briggs. A mortgage existed upon it which was held by Angelina Butler, to secure the sum of $15,000 and interest. The insurance, by the policy, was to extend over the period of one year. On the 29th of May, 1883, S. Ellis Briggs, with his wife, conveyed the premises insured to Louis J. McKenna by a warranty deed, subject to the outstanding mortgage securing $15,000 with interest, and on the 1st of June of the same year McKenna conveyed the property by a warranty deed to the plaintiff. This change in the title divested Briggs of all his insurable interest, and by a clause in the policy it was declared that it should become void, unless consent in writing should be indorsed upon it, if any change took place in the title, interest, location, or possession of the property, excepting the ease of succession by reason of the death of the insured, whether by sale, transfer, or conveyance in whole or in part. After the plaintiff acquired title by the deed delivered to him, and in the month of June, 1885, evidence was given tending to show that notice of this change in the title was given verbally to officers of the insurance company; but no indorsement was either requested in writing or made by the company of that fact upon the policy, and the omission to obtain the indorsement under this language avoided and terminated the insurance so far as it could inure to the benefit of the plaintiff. And there was no obligation at any time affecting the defendant by which it was bound to make the indorsement upon the policy unless it consented so to do. When the policy was issued, the loss, if any, was made payable to Angelina Butler, the mortgagee, and a mortgage clause or agreement was annexed to the policy by which the company agreed that the insurance—as to the interest of the mortgagee only—should not be invalidated by any act or neglect of the mortgagor or owner of the property insured, or by the occupation of the premises for purposes more hazardous than was permitted by the policy, but she was required to notify the company of any ■change of ownership, or increase of hazards, which should come to her knowledge, and for which the company reserved the right to be paid by the mortgagee on reasonable demand, according to the established scale of rates for the use of the increased hazards. A fire occurred on the 17th of September, 1885, injuring the property to the extent of upwards of $16,000. At this time this and. other policies were held by the mortgagee as security for the amount mentioned in the mortgage. After the occurrence of the fire, the ■other companies having insurances upon the property satisfied by payments their liability for the injury to the property. By those payments the sum of .$7,499.05 was received and turned over to the plaintiff, and he paid to the
The agreement of the company with the holder of the mortgage provided further that, “It is also agreed, that whenever the company shall pay the mortgagee any sum for loss under this policy, and shall claim that, as to the mortgagor or owner, no liability therefor existed, it shall at once be legally subrogated to all the rights of the mortgagee under all the securities held as collateral to the mortgage debt, to the extent or such payment, or, at its option, may pay to the mortgagee the whole principal due or to grow due on the mortgage, with interest, and shall thereupon receive a full assignment and transfer of the mortgage and all other securities held as collateral to the mortgage debt; but no such subrogation shall impair the right of the mortgagee to recover the full amount of her claim.” And as the plaintiff as the owner of the property had no legal right to enforce the policy against the company in his own behalf, if he should be permitted to do so as the assignee of Mrs. Butler, then, under this part of the agreement, the company would be entitled to resort to the mortgage for the reimbursement of the amount it would be compelled to pay out of the property. In other words, whatever sum it might pay to the plaintiff as the assignee of Mrs. Butler it would be entitled to reimburse itself for out of the property owned by the plaintiff himself, and incumbered by the mortgage. And, where that may be the relation of the parties to a transaction, the law, to avoid circuity of actions, will hold this right of reimbursement to be a defense against the enforcement of the agreement itself. There would be no legal propriety in allowing the plaintiff to collect the amount of this insurance from the company when upon its payment
It did appear further by the evidence, after it is stated that the defendant denied its liability upon the policy, that the plaintiff took out another insurance for the same amount in the Phoenix Insurance Company. That insurance extended from the 25th of July, 1885, to the 1st of May, 1886, and the plaintiff, in August, 1887, demanded of Briggs a return of the premium allowed in the settlement for the policy issued by the defendant, on the ground that it had at that time been canceled, and he had obtained an insurance for the same amount in another company. This insurance was paid by the Phoenix Company, and the payment probably formed a part of the money received by Mrs. Butler to reduce the mortgage to the amount for which Mr. Abbott took it as security against the land alone. From the time when the settlement was made with her this policy was no part of the security for the mortgage debt, and its assignment merely as a policy, in which neither she nor Mr. Abbott any longer had any interest to transfer to the plaintiff, gave him no legal benefit under the arrangement which had previously existed through which she held the policy as a further security. When this transfer was made it was no more than an insurance on the property itself for the benefit of the person to whom it had been issued; and assigning it subsequent to that time to Mr. Abbott, and by Mr. Abbott to the plaintiff, vested him with no right of action upon it. It was practically no more than the assignment of a mortgage would be without the transfer of an interest in the debt, and that would give the assignee no legal or equitable right to enforce it as a security. Merritt v Bartholick, 36 N. Y. 44; Warner v. Carey, 76 N. Y. 526. The judgment, under these principles, seems to have been right, and it should be affirmed, with costs. All concur.