Shadgett v. Phillips & Crew Co.

| Ala. | Nov 15, 1901

SHARPE, J.

Unless tlio mere fact that Mrs. Shadgett received the piano as a gift- from her husband with knowledge of his obligation to insure it for complainant’s benefit placed her in the Shoes of her husband with respect to that obligation, it is impossible to recognize any principle upon which complainant can claim the insurance money in controversy. The contract of insurance was wholly between the defendant and the Insurance Company and was personal in the sense that the money agreed to be paid in case of loss was' not. to stand in the place of the piano itself hut was a mere indemnity against the loss of defendant’s interest therein. If her interest was small on account of incumbrances existing in favor of complainant, that fact was for the consideration only of the insurer and defendant, for complainant has no concern with the adjustment of the loss between them. We know of no principle either of law or equity which ■would hind defendant to 'carry out her donor’s contract to insure in the absence of any agreement on her part to do so, even though the property in her hands was subject to complainant’s rights therein as a conditional vendor.

In the case of Miller v. Aldrich, 31 Mich. 408" court="Mich." date_filed="1875-04-13" href="https://app.midpage.ai/document/miller-v-aldrich-7927983?utm_source=webapp" opinion_id="7927983">31 Mich. 408, relied on for complainant, not only was there an agreement on the part of the mortgagor that mortgaged property should he kept, insured by the mortgagor for the mortgagee's benefit, but a policy had been taken out. accordingly and thereafter the mortgagor sold the property and Ins vendee in conjunction with the mortgagor procured a discontinuance of that policy and the issuance of another payable to the vendee alone. This was held to be a wrong to the mortgagee, in that it deprived him of that which had been already prodded for his security, and to prevent such wrong the court, of equity interposed by decreeing payment, of the proceeds of the second insurance to the first, mortgagor whose lights he had helped to displace. It. is true it was said by tlie 'court that the agreement with the mortgagee to insure for his benefit “was in equity a sort of adjunct to the mortgage and was binding on Chapman (the mortgagor) and on all others in his shoes with notice.” It was also said the vendee appears to have taken the place of the mortgagor and to have occupied a position which required him to recognize and respect the terms of the agreement intended to fortify the mortgagee’s security under the mortgage; but it was further said that instead of recognizing and respecting it he joined in the transaction to set aside and to so place himself that if the mortgaged property should burn he might put the mortgage money in liis own pocket. Thus it. seems to have been upon the vendor’s participation in the displacement of a -security already provided, rather than upon any contract obligation, that the proceeds were in that case held to enure to the mortgagee’s benefit.'

A contract for insurance made'for the insurer’s indemnity only, as where there is no agreement express or implied that it -shall be for the benefit of a third person, does not attach to or run with the title to the insured property on a transfer thereof personal as between the insurer and the insured. In such case strangers to the contract cannot acquire in their own right any interest in the insurance money except tlirough an assignment or some contract with which they are connected.- — Vandergraff v. Medlock, 3 Port. 389" court="Ala." date_filed="1836-06-15" href="https://app.midpage.ai/document/vandegraaff-v-medlock-6529119?utm_source=webapp" opinion_id="6529119">3 Port. 389; May Ins., § 449; Carter v. Rockett, 3 Paige (N. Y.), 436; Dunlop v. Averg, 89 N.Y. 592" court="NY" date_filed="1882-10-10" href="https://app.midpage.ai/document/dunlop-v--avery-3613249?utm_source=webapp" opinion_id="3613249">89 N. Y. 592; Nordyke v. Gerg, 112 Ind. 535" court="Ind." date_filed="1887-10-19" href="https://app.midpage.ai/document/nordyke--marmon-co-v-gery-7049089?utm_source=webapp" opinion_id="7049089">112 Ind. 535.

The foregoing and many -other authorities recognize the doctrine that where a mortgagor lias contracted to-insure for the benefit of the mortgagee, or to pay to him the proceeds of a policy, and in disregard of the contract effect® insurance in his own name and resists payment of the proceeds to the mortgagee, equity will upon the principle of treating as done 'that which should have been done, establish a lien on such proceeds in favor of the mortgagee. It may be conceded that a conditional purchaser or his vendee contracting to like effect for the 'conditional vendor’s benefit would be liable to the enforcement of a similar equity, but here there was no undertaking on the part of Mrs. Shadgett to either insure for complainant’s benefit or to ’ assume her husband’s obligation to so insure, and mere knowledge of that obligation did not impose it upon her.

The bill has not averments appropriate to present a ease of fraud and is without equity. It will be -here dismissed but without prejudice and the decree appealed from will be reversed. Complainant will pay the costs in this court and in the chancery court.

Reversed and rendered.