Williamson v. Michigan Fire & Marine Insurance

The plaintiff could not maintain an action upon the policy in question as sole plaintiff. The legal right of action was in the insured, and the provision in the policy, “loss, if any, first payable to Jennie Perkins or assigns, as her mortgage interest may appear,” operated only as a conditional appointment or order to pay so much of the proceeds of the policy as might be equal to the amount due on the mortgage at the time of, and in the event of, a loss under it. It was not operative in prmsenti, and the insured was still the owner of the policy. If the mortgage was paid before any loss occurred it could not become effective. These considerations serve to show that, whether the mortgage debt be greater or less than the amount of *396the policy when written, such a provision in favor of a mortgagee does not operate as an assignment of the policy. It is still the owner of the premises who is insured, and the contract of the company is with him alone, and the continued validity of the policy is dependent upon the performance by him of the conditions embraced in it. It is not the interest of the mortgagee in the premises that is insured; and it seems clear, therefore, that an action for the recovery of the money in case of loss must be brought in the name of the insured, but that the mortgagee, in respect to his interest, may be joined with him as a coplaintiff. The recent cases of Hodgson v. German Ins. Co., ante, p. 323, and Chandos v. American F. Ins. Co. 84 Wis. 184, are decisive of the question involved. 2 Wood, Ins. 1122; Martin v. Franklin F. Ins. Co. 38 N. J. Law, 140; Hartford F. Ins. Co. v. Davenport, 37 Mich. 613; Warbasse v. Sussex Co. Mut. Ins. Co. 42 N. J. Law, 206,— may be referred to in addition to the authorities cited in these cases.

It is not the interest of the mortgagee that is insured, but the interest of the mortgagor; and it seems illogical to say that whether such an appointment will operate as an assignment of the policy, if it can so operate at all, is dependent upon'Whether the sum due on the mortgage is greater or less than the amount of the loss. The company says, in substance, to the insured: “In consideration of the stipulated premium, we insure you against loss by fire on the property described, in the sum of $400; and at your request, in case a loss occurs, we will pay it to J. P., to the extent that any sum may then remain due on his mortgage.” This is clearly not an assignment of'the policy so that in case of loss the mortgagee alone may sue and recover for it. It is no more than a conditional appointment or agreement for the future appropriation of all or a part of the moneys that may become due under the policy, according to future events, depending for its opera*397tion upon an actual loss and something remaining clue on the mortgage. The case is not one of a defect of parties, but of a want of sufficient interest in the plaintiff to enable him to recover. The judgment of the county court is erroneous and must be reversed.

By the Court.— The judgment of the county court of Winnebago county is reversed, and the cause remanded for a new trial and with directions that the insured be properly made a party to the action.