latter is defended in learned and instructive opinions, delivered by Justices Brett, Cotton, and Bowen, of which the first two are given among the selected cases of the second part of this book, but it is not easy to find in them any adequate reason for the conclusion at which the court arrived. Where a wrong-doer causes the loss to the insured, and the insurers pay it, their right to subrogation is plain. Where a mortgagee holds a mortgage as collateral security for the payment of a debt, and the insurers pay the mortgagee under the mortgagee's policy, many courts, though not those of Massachusetts, regard the insurance and the mortgage as two securities for the payment of the same loss in such a sense as to demand the application of the doctrine of subrogation in favor of the insurers; though it may not be clear, upon principle, why the insurers should be subrogated to the mortgage, rather than the mortgagor to the insurance. But it cannot be maintained that the purchase price arranged for in an executory contract of sale is in any respect the subject of the insurance already existing upon the land. It is rather the fruits or profits incidental to the ownership of the property which is still vested in the insured. The contract of sale is altogether independent of the contract of insurance, and, unless prohibited by the terms of the policy, has no relation to it; and this may be well illustrated by supposing that the purchase price under the executory contract is to be paid in services instead of money. In that event, it would seem almost grotesque to contend that, after a settlement and payment under the policy, from which the English court admitted there was no escape, the insurers may claim the benefit of future services to be rendered to the insured by virtue of a contract made subsequent to the policy. No such agreement of recoupment ought to be read into the contract of insurance by the court, unless equity or public policy imperatively demands it. If the contract to sell violates one of the conditions of the policy, the insurers will be exonerated. If it does not, then they ought to pay according to their promise, and whether the insurance money ultimately remains with the vendors or the vendees depends upon contract relations with which the insurers are not in privity. A re-insured is entitled to recover the amount which he is obligated to pay by the original insurance, and this he may recover by reason of his liability before he has actually made payment thereof to the insured.1 Under a policy for loss of use. and occupation of a mill or other building while undergoing repairs or while being rebuilt after the fire, the amount of recovery is usually defined by the policy as so much per day; and provision is often made for ascertaining by appraisal the amount of probable loss of time. § 33. Contract is Personal.—A contract of insurance on property is personal; that is, it does not pass to the new owner by virtue of a transfer of the title of the property.2 Hence, upon closing a sale or conveyance, it is of consequence to the vendee to see that new policies are taken out, or that the proper indorsements consenting to the transfer are made by the insurers upon the old policies. This rule is reasonable; for, as was explained in the introductory chapter, the moral risk assumed by the insurers depends upon the character and circumstances of the insured. They have a right to know with whom they are contracting, and no new party can be thrust upon them without their consent. However important the policy of insurance may be to the owner, for the time being, of the property, it in no respects runs with the land or other property. § 34. Contract is an Entirety.-If the risk has not attached at all, the premium is returnable, unless the policy is avoided by fraud of the insured from the inception of the contract; but, if the risk has once attached, the premium is not to be apportioned, unless by special agreement.3 35. Assignment of Policies. Before loss a fire policy is not assignable without the consent of the insurer; but in case of a marine or life policy the rule is otherwise,* 1 Hone v. Sandf. 137. Mutual Safety Ins. Co., 1 747. Joshua Handy Works v. Ins. Co., ? Powles v. Innes, 11 M. & W. 10. Lett v. Guard. Fire Ins. Co., 125 N. Y. 82. Raynor v. Preston, 18 Ch. D. 1. Blaeser v. Milwaukee Mut. Ins. Co., 37 Wis. 31; s. c., 19 Am. Rep. 86 Cal. 248; s. c., 21 Am. St. Rep. 33 (1890). Ins. Co. v. Pyle, 44 Ohio St. 19; s. c., 58 Am. Rep. 781. Heinely v. So. Car. Ins. Co., 1 Mill, 153; s. c., 12 Am. Dec. 623. Earl v. Shaw, 1 Johns. Cas. 314; s. c., 1 Am. Dec. 117. Often, however, in the policy of life insurance an assignment is made ineffectual until after written notice thereof is given to the company. The assignability of the marine policy was early established by custom, and grew out of the demands of mercantile business, which overrode the theory that the contract is strictly personal. The value of a life policy, too, would often be seriously diminished unless the owner of it were able to make it the source of immediate benefit. Inasmuch as it is payable upon an event which sooner or later is certain to occur, it very much resembles an ordinary chose in action, and in most cases no just reason could be given why it should not be assignable, provided the insured is also the beneficiary. Under the New York Act of 1840, chap. 80, designed to secure to the wife and children of the insured the benefits of life insurance free of creditors' claims, it was held that neither the insured nor his wife could assign or disturb the irrevocable interest thereby created.1 But by the Act of 1873, chap. 821, provision is made for surrendering the policy in favor of a married woman or of her and her children; also, if she has no children or issue thereof, for disposing of such policy by will or deed. And by the Act of 1879, chap. 248, the wife or her legal representatives may, with her husband's written consent, assign any policy issued within the State upon his life for her benefit and use, to any person, or may surrender it to the insurer. The policy is assignable whether the wife have children or not, and the husband's assent is sufficiently shown by his joining with the wife in the assignment.3 Similar statutes have been passed in other States (see appendix). $ 36. Vested Interests: Life Insurance.-Where the insured designates another person as beneficiary, the right of the latter, as a rule, at once becomes vested so that it cannot be disturbed by assignment or will or in any way without his consent, unless the right to make a new appointment is reserved by the terms of the policy itself, or by the regulations of the company subject to which the policy is issued, or by provision of law.1 A different rule is adopted in Wisconsin, where it has lately been held that one who has procured a policy upon his own life for the benefit of another, and has paid the premiums thereon, may dispose of the insurance money to the exclusion of the beneficiary named in the policy, during the lifetime of such beneficiary.2 If a husband insures his life for his wife, and pays all the premiums with money embezzled from his firm, the proceeds of the policy will belong to it; but if the first premium is honestly paid by him, and subsequent premiums with money stolen from his firm, the proceeds of the policy will belong to the wife, charged with a lien to the firm for the amount of its money used for premiums.3 If the beneficiary named in a policy of life insurance dies before the insured, the latter having taken out the insurance and paid the premiums, a new appointment may be made by the insured, provided the first appointment was purely gratuitous, especially if the insured has kept possession of the policy. This rule proceeds upon the principle that the intent of the insured to benefit the person of his selection having been defeated by death, he ought to have the opportunity of decid 1 In re King, 14 Ch. D. 179. Washington Cent. Bank v. Hume, 128 U. S. 195. Garner v. Germania Life Ins. Co., 110 N. Y. 266. Fowler v. Butterly, 78 N. Y. 68. Stilwell v. Mutual Life Ins. Co., 72 N. Y. 385. Lemon v. Phenix Life Ins. Co., 38 Conn. 294. Unity Mut., etc., Assoc. v. Dugan, 118 Mass. 219. Norris v. Mass. Mut. Life Ins. Co., 131 Mass. 294. Ricker v Charter Oak Life Ins. Co., 27 Minn. 193; s. c., 38 Am. Rep. 289. Glanz v. Gloeckler, 104 Ill. 573; s. c., 44 Am. Rep. 94. Re Richardson, 47 Law Times, N. S., 514. Butler v. State Mut. Life Assur. Co., 55 Hun. 296. Phipard v. Phipard, 55 Hun. 4:3. 2 Estate of Breiton, 78 Wis. 33 (1890). But this case is in conflict with many adjudications by other courts, and the dissenting justice wisely remarks: "The Holmes v. Davenport, 27 Abb. N. C. L ing whether the policy shall inure to the benefit of the representatives of the deceased, or shall go to some other beneficiary. The decisions are somewhat inharmonious, but any rule depriving the insured of control, in such a case, over a policy taken out and kept alive by him, would not only be inequitable but also in many cases ineffective, for when the next premium became due the insured might allow the policy to lapse. In case, however, a new appointment is not made by the insured before his death, the representatives of the deceased appointee, and not the representatives of the insured, will receive the proceeds of the insurance.1 In case the insured, having an insurable interest in the life of another, takes out a policy upon that life, and pays the premiums for the benefit of himself, the policy belongs to him, and the life insured has no interest in it or control over it. The legislatures of some of the States have provided that a change of beneficiary may be made in certain cases by the insured without the consent of the payee first named, provided of course the first appointment was not founded upon any valuable consideration moving from the payee (see appendix). § 37. Relations between Insurer and Insured: Life. The policy holder is a creditor, and not a cestui que trust of the company, and hence he cannot call upon the company, in the absence of fraud, to disclose to him their affairs in general, or to make an account to him for his share of dividends or profits; and he is not a partner in the company.3 As soon as the risk attaches, the insured, under the usual form of policy, becomes debtor to the insurer for the first premium, if it has not been paid. But as to the future premiums payable in advance, the relation of debtor does not exist, for the contract does not contain a promise on the part of the insured to pay the premium, but the payment is simply made the condition of the continuance of the contract.' 1 Walsh v. Mutual Life Ins. Co., 61 Hun. 91 (1891). Continental Life Ins. Co. v. Palmer, 42 Conn. 60. Uhlman v. N. Y. Life Ins. Co., 109 N.Y. 421. Matthew v. Northern Assur. Co., 9 Law Rep. Ch. Div. 80. 3 ' People v. Security Life Ins., &c., Co., 78 N. Y. 114. Goodwin v. Mass. Mut. Life Ins. Co., 73 N. Y. 480. Worthington v. Charter Oak Life Ins. Co., 41 Conn. 372; s. c., 19 Am. Rep. 495. |