Certain persons incorporated as a fire insurance company.the proprietors of the stock of the late fire insurance company of the town of Alexandria, on the eighth day of March, eighteen hundred and thirty-five, and the representatives and assigns of such of them as have since that time died, or transferred their interests be, and the same are, hereby incorporated and declared to be a body politic, under the name and style of the Fire Insurance Company of Alexandria.
The description of the property insured must be such as the property is, and not such as will in any way reduce the rate of the premium. Ibid. 56.
The doctrine, as applied to policies against fire on land, has for a great length of time prevailed, that losses occasioned by the mere fault or negligence of the assured, or his servants, unaffected by fraud or design, are within the protection of the policy, and as such are recoverable from the underwriters. This doctrine is fully established in England and America. Waters v. The Merchants’ Ins. Co., 11 Peters, 313.It is a well established principle of the common law, that in all cases of loss we are to attribute it to the proximate cause, and not to the remote cause. This has become a maxim to govern cases arising under policies of insurance. Ibid.L. & P. at the time an insurance was made for them against loss by fire, were entitled to one third of the property by deed, and to two thirds as mortgagees; but one moiety of the whole was held under an agreement which had not been complied with, and which purported on its face to be void, if not complied with; but the other contracting party had not declared it void, nor called for a compliance with it. L. & P. had an insurable interest in the property. The Columbian Ins. Co. v. Lawrence, 2 Peters, 46.That an equitable interest may be insured, is admitted; and the court perceive no reason which excludes an interest held under an executory contract. While the contract subsists, the person claiming under it has undoubtedly a substantial interest in the property. If it be destroyed, the loss, in contemplation of law, is his. If the purchase money be paid, it is his in fact. If he owed the purchase money, the property is equivalent, and is still valuable to him. The embarrassment of his affairs may be such that his debts may absorb all his property; but this circumstance has never been considered as providing a want of interest in it. The destruction of the property is a real loss to the person in possession, who claims title under an executory contract; and the contingency that his title may be defeated by subsequent events does not prevent this loss. Ibid. 46.Action on a policy of insurance on the “Glenco Cotton Factory,” against loss or damage by fire. The policy was dated the 27th day of September, 1838, and was to endure for one year. The policy contained a clause by which it was stipulated by the assured, that if any other insurance on the property had been made, and had not been notified to the assurers, and mentioned in or endorsed on the policy, the insurance should be void; and if afterwards any insurance should be made on the property, and the assured should not give notice of the same to the assurers, and have the same endorsed on the policy, or otherwise acknowledged by the assured in writing, the policy should cease; and in case any other insurance on the property, prior or subsequent to this policy, should be made, the assured should not, in case of loss, be entitled to recover more than the portion of the loss should bear to the whole amount insured on the property; the interest of the assured in the property not to be assignable, unless by consent of the assurers, manifested in writing; and if any sale or transfer of the property without such consent is made, the policy to be void and of no effect. On all the policies of insurance made by the insurance company, there was a printed notice of the conditions on which the insurance was made. The declaration alleged that Carpenter was the owner of the property insured, and was interested in the same to the whole amount insured by the policy; and that the property had been destroyed by fire. The facts of the case showed that the property had been mortgaged for a part of the purchase money, and the policy of insurance was held for the benefit of the mortgagor. Another insurance was made by another insurance company, but this was not communicated in writing to the Providence Washington Insurance Company; nor was the same assented to by them, nor was a memorandum thereof made on the policy. By the court: No doubt can exist that the mortgagor and the mortgagee may each separately insure his own distinct interest in property against loss by fire. But there is this important distinction between the cases; that where the mortgagee insures solely on his own account, it is but an insurance of his debt; and if his debt is afterwards paid or extinguished, the policy ceases from that time to have any operation; and even if the premises insured are subsequently destroyed by fire, he has no right to recover for the loss, for he sustained no damage thereby; neither can the mortgagor take advantage of the policy, for he has no interest whatsoever therein: on the other hand, if the premises are destroyed by fire, before any payment or extinguishment of the mortgage, the underwriters are bound to pay the amount of the debt to the mortgagee, if it does not exceed the insurance. Upon such payment, the underwriters are entitled to an assignment of the debt from the mortgagee, and may recover the same from the mortgagor. The payment of the insurance is not a discharge of the debt, but only changes the creditor. Carpenter v. The Providence Washington Insurance Company, 16 Peters, 495.When the insurance is made by the mortgagor, he will, notwithstanding the mortgage or other encumbrance, be entitled to recover the full amount of his loss, not exceeding the insurance, since the whole loss is his own. The mortgagee can only insure to the amount of his debt; whereas the mortgagor can insure to the full value of the property, notwithstanding any encumbrances thereon. Ibid.An assignment of a policy by the assured only covers such interest in the premises as he may have had at the time of the insurance, and at the time of the loss. If a loss takes place after the policy has been assigned, the assignee alone is entitled to recover. The rights of the assignee under the policy cannot be more extensive than the rights of the assignor. Cited the The Columbia Insurance Company v. Lawrence, 10 Peters, 507, 512; 2 Peters, 25, 49.Policies of insurance against fire are not deemed in their nature incidents to the property insured, but they are mere special agreements with the person insuring against such loss or damage as they may sustain; and not the loss or damage that any other person having an interest as grantee, or mortgagee, or creditor, or otherwise, may sustain by reason of the subsequent destruction by fire. Ibid.The public have an interest in maintaining the validity of the clauses in a policy of insurance against