Coates v. Pennsylvania Fire Insurance

Ritcuim, J., delivered the opinion of the Court. The single question to be determined on this appeal is whether the plaintiffs, to whom the policy of insurance on which they seek to recover, was issued by the defendant, are entitled to maintain this action in their own name, because of the policy’s containing the clause, “Loss, if any, payable to the Havings Bank of Baltimore, mortgagee,” notwithstanding the mortgagee had given its written consent to the plaintiffs, so to bring the suit, and such consent was averred in the narr. The plaintiffs were the party with whom the company contracted; were the owners of the property insured, when the policy was issued, and at the time of the loss, and had paid the intermediate renewals by which the policy was kept in force. There was no consideration moving from the mortgagee to the company; and the company assumed no enhanced risk or burden in consenting to pay the insurance money ¹⁷⁸ to the mortgagee.

This application or disposition of the money was an arrangement, in substance, as between the assured and the mortgagee, for the greater security or indemnity of the latter, and was not of the essence of the company's obligation. The right to the money really accrued to the assured, in case of loss, by virtue of their having been the contracting party; of their property being the subject of the insurance; and of their having paid the premiums which constituted the consideration. But because of their (direction simply, incorporated at their instance in the policy, and not because of any independent liability incurred to the mortgagee by the company, the mortgagee was designated as the recipient of the payment, though in fact such payment enured to their own benefit. It is true, that by reason of this provision, the mortgagee acquired such an interest under it, that suit could have been brought by it, had it so elected. “If, (says Bulles,, J.,) one person makes a promise