Opinion. mitted, as contended by the defendants, that the right of the infants to the insurance has not been heretofore adjudicated and must be determined in this case, we are of the opinion that they cannot recover any portion of the insurance collected by Gearheart. [1] The life tenant was under no obligation to insure the property for the benefit of the remaindermen. Each of them had an insurable interest in the property, but a policy in the name of one could not cover the interest of the other. The nature and effect of an insurance contract is to indemnify the insured against loss or damage, and not some one else who is not a party to the contract; nor has such other party any lawful claim upon the amount realized by the assured under the policy. [2] If, as seems probable, Gearheart succeeded in collecting from the insurer money which he was not entitled to demand under his policy contract, the remaindermen were not entitled to any portion thereof. In the case of Harrison v. Pepper, 166 Mass. 288, 44 N. E. 222, 33 L. R. A., p. 239, 55 Am. St. Rep. 404, the Supreme Court of Massachusetts, considering a similar case said: "In the absence of anything that requires it in the instrument creating the estate, or of any agreement to that effect on the part of the life tenant, we think that the life tenant is not bound to keep the premises insured for the benefit of the remaindermen. Each can insure his own interest, but, in the absence of any stipulation or agreement, neither has any claim upon the proceeds of the other's policy, any more than in the case of mortgagor and mortgagee, or lessor and lessee, or vendor and vendee." Burlingame v. Goodspeed, 153 Mass. 24, 26 N. E. 232, 10 L. R. A. 495; International Trust Co. v. Boardman, 149 Mass. 158, 21 N. E. 239; Suffolk Fire Ins. Co. v. Boyden, 9 Allen (Mass.) 123; Warwick v. Bretnall, L. R. 23 Ch. Div. 188; Leeds v. Opinion. Cheetham, 1 Sim. 146; Rayner v. Preston. L. R. 18 Ch. Div. 1; Kearney v. Kearney, 17 N. J. Eq. 59, 71. The court further on says, "Nor can the defendant be converted into a trustee for the plaintiff by the mere fact that the amount which she received was equal to the full value of the house. It was paid to and received by her as indemnity for the loss which she had sustained, and, as already observed, does not stand in the place of the property * If the contract is one of indemnity to the insured for the loss sustained by him, it is difficult to see how a sound public policy could be subserved by holding that he shall use what belongs to him for the benefit of some one else." ** In the case of Quarles v. Clayton, 87 Tenn. 308, 10 S. W. 505, 3 L. R. A. 171, in a well considered opinion delivered by Lurton, J., the Supreme Court of Tennessee held that in the absence of any contract, covenant, agreement or understanding that the husband should insure for the benefit of his wife, the property in which she acquired a life interest on his death in virtue of an antenuptial contract, she has no equitable interest in the proceeds of a policy of insurance thereon taken out by her husband in his lifetime; and that an insurer's option to pay or rebuild, when premises are destroyed by fire, is not sufficient to raise an equity in favor of third persons who are disappointed by the exercise of the insurer's election to pay, although they would be entitled to the use of the structure if rebuilt. The defendant relies on Haxall v. Shippen, 10 Leigh (37 Va.) 536, 34 Am. Dec. 745; Brough v. Higgins, 2 Gratt. (43 Va.) 409, and Clyburn v. Reynolds, 31 S. C. 91, 9 S. E. 973; but neither of these cases is controlling in the instant case. The standard fire insurance policy contract contains a provision that the policy shall become void "in case Opinion. any change shall take place in title, except by succession by reason of the death of the assured.' In the Haxall-Shippen Case, supra, the testator insured his dwelling in his own name, loss payable to himself, his heirs and assigns, and devised the property to his wife for life, remainder to his two daughters in fee. The house burned down after his death and during the life of his wife. His wife collected the insurance and spent it in erecting a new house upon the premises. Under the provisions in the policy, upon the death of the insured, the policy followed the title and covered the interests of the life tenant and the remaindermen just as if it had been re-written in their names. The court held that the life tenant had the right to receive the money, but when received it was personal estate of which she had a right to the use for life, and her daughters to the remainder; and that she had no right to convert the money into real estate by applying it to the building of a new house, without the consent of the remaindermen. In Brough v. Higgins, supra, the court simply held that where a building insured, in which one person is entitled to a life estate and another to the reversion, sustains a partial injury by fire, for which indemnity is due from the insurer, the tenant for life, and the reversioner, are each entitled to have the insurance money applied to the repair of the building. In Clyburn v. Reynolds, supra, James Chester, Jr., was executor of his father's estate, with power to manage the property. He had a life estate in the property in question, with power of appointment. For some time he had insured the property in his own name. Just before his death he insured it in his name as executor. Presumably, he had exercised his power of appointment at that time and took the insurance in his name as ex Opinion. ecutor to indicate that the insurance was intended for the benefit of the then owner of that portion of his father's estate. Under these circumstances, the court reaches the conclusion that the life tenant is a trustee for the remainderman and that a sound public policy requires that any money collected by a life tenant as a total loss by fire should be used in rebuilding or should go to the remainderman. This holding is at variance with the universally accepted doctrine that a contract of insurance is a personal contract and inures to the benefit of the party with whom it is made, and indemnifies him against loss; and that the amount paid by the company "is in no proper or just sense the proceeds of the property." Lerow v. Wilmarth, 9 Allen (Mass.) 382, 385; Wilson v. Hill, 3 Metc. (Mass.) 66; King v. Mut. F. Ins. Co., 7 Cush. (Mass.) 1, 54 Am. Dec. 683; Columbian Ins. Co. v. Lawrence, 35 U. S. (10 Pet.), 507, 9 L. Ed. 512. [3] In the instant case, the plaintiff, being a life tenant for the life of another then dead, could not legally collect any sum of money from the company since he was not damaged by the fire. The remaindermen held no contract with the insurance company by which it agreed to indemnify them against loss or damage. Under these facts, there was no liability upon the insurance company in favor of either party and the settlement made by it with Gearheart must have been made without knowledge of the status of the title to the property, or to prevent a threatened law suit. The remaindermen are entitled to no part of the money collected by him. The decree complained of is without error and must be affirmed. Affirmed. Syllabus. Staunton. TURNER-JENNINGS MOTOR COMPANY, INC., ET AL., V. BECKLEY'S ADMINISTRATOR.. September 20, 1923. 1. LANDLORD AND TENANT-Assignment-Secret Agreement between Assignor and Lessor for Benefit of Assignor-Case at Bar.-A lessee of a garage agreed to assign his lease to a corporation to be formed to take over his business. The lessor at first agreed to the assignment of the lease, but afterwards at the instance of the lessee refused to assent to an assignment unless the rent was increased from $175.00 to $225.00 a month. Accordingly, a new lease was executed to the lessee at a rental of $225.00 a month, and by another instrument executed on the same day the lessor agreed to allow the lessee $50.00 per month should he sublet the property to some one else. The lessee then assigned the lease in accordance with his previous agreement and the assignee subsequently paid the rental of $225.00 per month. Held: That upon a sound interpretation of the two papers executed at the same time, in the light of the lessee's relationship to all the parties, the lessee took a lease from the lessor for $175.00 per month, and transferred that lease to the assignee, who proceeded to overpay the lessor the sum of $550.00, and that fund not being claimed in any way by the lessor, the right to recover it clearly followed, and that right belonged to the assignee, as it alone had made the excess payments, and not to the administrator of the lessee. 2. LANDLORD AND TENANT-Assignment-Overpayment of Rent by Assignee Waiver by Assignee of Right to Recover-Case at Bar.-In the instant case it was contended that the assignee of a lease waived the right to recover back overpayments to the lessor, induced by a secret agreement between the lessor and the assignor, by making payments after discovery of the secret agreement. Held: That there was no force in this contention, as the overpayments were made with the understanding on the part of the lessor that the same should not prejudice the right of the assignee to recover back the amount paid. Error to a judgment of the Court of Law and Chancery of the city of Roanoke, in a proceeding by motion. |