Connecticut Mutual Life Insurance v. Scammon

Citations

• 117 U.S. 634
• 6 S. Ct. 889
• 29 L. Ed. 1007
• 1886 U.S. LEXIS 1884

Syllabus

<p>A father owning in fee an equal undivided one third part of a lot of land, and having a life tenancy in the other equal undivided two third parts, and his two daughters each owning in fee an equal undivided one third part, subject to such life tenancy, the three executed a mortgage on the lot, for a loan of $30,000, in which the mortgagors agreed to keep the building on the lot insured against fire, in' its fair insurable value, and assign the policy to the mortgagee, to beheld by him “as collateral and additional security,” with the right to collect the insurance money and apply it on the mortgage. - On a partition of the lot between the father and the daughters, they paid $10,000 to the mortgagee, on the principal, and he released from the mortgage the part belonging to the father. The father, with the money loaned, had erected a building on the part of the lot allotted to the.daughters, and he thereafter collected for his own use the rents, and paid the interest on the mortgage, and the taxes, and the fire insurance premiums. The building, being insured for $15,000 by a policy in the name of the father, the loss being made payable to the mortgagee, was destroyed by fire. The loss being , more than that sum, the mortgagee received a draft for $15,000 on the insurance company, drawn by its agent, to the order of the mortgagee, and agreed in writing with the father, by an instrument which stated that the moi'tgagee held the policy as collateral security for the payment of the loan, that the right to apply the $15,000 on the debt was waived, and that the money should be deposited in a bank to be selected by the father, to his credit and at his risk, to be used in erecting a building on the lot, the < money to be paid out on the father’s checks, countersigned by the mortgagee, within six months, or the waiver to be of no effect, and the mortgagee to have the right to apply the money .on the debt. - Thereupon the mortgagee endorsed the draft to the order of the fath