The Massachusetts standard form of fire insurance policy provides, that the policy shall be void if assigned without the assent of the company in writing or print. Such a policy was taken out by a mortgagor and made payable to the mortgagee "as his interest may appear." The mortgagee assigned the mortgage and also without the assent or knowledge of the insurance company assigned to the assignee of the mortgage all his "right and interest" in the policy. Held, that this was not a transfer of the policy within the above prohibition, but merely an assignment of the right to receive the proceeds as security for the mortgage debt.
One to whom an insurance policy is payable as "mortgagee, as his interest may appear," may assign to the assignee of the mortgage the right to receive on the same terms the proceeds of the policy.
The Massachusetts standard form of fire insurance policy, prescribed by St. 1894, c. 522, § 60, contains the following provision: "If this policy shall be made payable to a mortgagee of the insured real estate, no act or default of any person other than such mortgagee or his agents, or those claiming under him, shall affect such mortgagee's right to recover in case of loss on such real estate." It also provides, that the policy shall be void if the property is sold without the assent of the company in writing or print. A standard policy on mortgaged real estate was made payable to the mortgagee in case of loss. Without the assent or knowledge of the company, one of the two mortgagors who took out the policy conveyed his interest in the mortgaged property and his interest was also sold on execution. Held, that this conveyance and sale did not affect the right of the mortgagee to recover on the policy.
The objection to a bill in equity that the plaintiff has a plain, adequate and complete remedy at law not set up in the defendant's answer cannot be taken for the first time in this court.
LORING, J.
The assignment by Jewell of all his right and interest in the policy was not a violation of the provision that the "policy shall be void . . . if . . . without the assent in writing or in print of the company . . . this policy [shall be] assigned." The object of that provision, (coupled with the provision declaring the policy void if the property insured is sold,) is to prevent the company becoming the insurer of the property of a person who is not acceptable to it; an insurance company has the right to refuse to insure a person whose character is such that the moral risk (to use a term employed in the insurance business) is greater than it is where the same property is owned by an honest man, and is a risk, which they do not care to assume. The transfer prohibited by this provision is a transfer of the contract of insurance; that is to say, a transfer by Guptill and Burkhardt, the persons insured; not a transfer by Jewell, who was the person designated as the person entitled to receive the proceeds of the insurance, if any, due under the contract between the company on the one hand and Guptill and Burkhardt on the other. The distinction is plainly and fully pointed out in Fogg v. Middlesex Ins. Co. 10 Cush. 337, 346; Phillips v. Merrimack Ins. Co. 10 Cush. 350, 353; New York Mutual Ins. Co. v. Allen, 138 Mass. 24, 28, 29; Merrill v. Colonial Mutual Ins. Co. 169 Mass. 10, 13, 14. What Jewell did by assigning his "right and interest in this policy" was not to transfer the policy, but to assign to another his right to receive the proceeds, if any, under it; the policy remained after the assignment, as it was before, the policy of Guptill and Burkhardt.
We see no reason why Jewell should not make the assignment made by him; the policy was made payable to him as "mortgagee, as his interest may appear"; he assigned his right to receive the proceeds, if any, to the assignee of the mortgage in question, and the plaintiff's right to receive the proceeds of the insurance was subject to this clause in the hands of the plaintiff and could not be held by him for any debt other than the debt secured by that mortgage.
The conveyance by Guptill of his interest in the building insured did not affect the right of the plaintiff to recover in case of loss; it is provided in the policy, that "If this policy shall be made payable to a mortgagee of the insured real estate, no act or default of any person other than such mortgagee or his agents, or those claiming under him, shall affect such mortgagee's right to recover in case of loss on such real estate." This mortgage was originally made payable to "Jewell, mortgagee," and after the assignment by Jewell of his interest to the plaintiff, who had in fact become the assignee of the mortgage in question, it continued to be "payable to a mortgagee," and, as we have said, it could not have been held by the plaintiff for any debt other than the mortgage debt in question.
The objection that there is a plain, adequate and complete remedy at law was not set up in the answers or any of them, and being raised for the first time in this court, is not taken in time. Jones v. Keen, 115 Mass. 170. Crocker v. Dillon, 133 Mass. 91. Parker v. Nickerson, 137 Mass. 487.
A decree must be entered directing the defendant insurance company to pay to the plaintiff the amount of the policy with interest from September 4, 1899.
So ordered.