Farmers' Etc. Bk. v. Hartford F. Ins. Co. , 43 Idaho 222 ( 1926 )

Although there is no provision in the policy of insurance prohibiting the alienation or change of the interest of the assured, it is earnestly and ably contended by appellant that when Barnhart and White assigned to Maughan the contract for the purchase of the land and "released" their interest in the insured crop, they thereby lost any and all rights under the policy to recover for loss to the insured crop and that the right of the bank to recover on the policy was no greater than that possessed by Barnhart and White.

As to the effect on the insurable interest of Barnhart and White of their transfer of the insured property, it may be said that one has an insurable interest in property who is benefited by its continuing to exist or suffers pecuniary loss by its damage or destruction, even though without title to the property, possession or right to possession thereof. (32 C. J. 1110, sec. 204; 26 C. J. 20, sec. 3; p. 228, sec. 279; 14 Rawle C. L. 915, sec. 92; 1 Cooley's Briefs on the Law of Insurance, 153 (i), 185 (b); Hanover Fire Ins. Co. v. Bohn, 48 Neb. 743, 58 Am. St. 719, 67 N.W. 774; Lumbermen's Nat. Bank v. Corrigan,167 Wis. 82, 166 N.W. 650; Warren v. Davenport Fire Ins. Co.,31 Iowa, 464, 7 Am. Rep. 160; Herkimer v. Rice, 27 N.Y. 163;Norcross v. Insurance Companies, 17 Pa. 429, 55 Am. Dec. 571;Springfield F. M. Ins. Co. v. Allen, 43 N.Y. 389, 3 Am. Rep. 711; Williams v. Roger Williams Ins. Co., 107 Mass. 377, 9 Am.Rep. 41; Rohrback v. Germania Fire Ins. Co., 62 N.Y. 47, 20 Am.Rep. 451; Buffalo Co. v. Sun Mutual Ins. Co., 17 N.Y. 401.) Before the assignment, Barnhart and White had indorsed promissory notes to the bank, payment of which had been secured by a mortgage on the insured crop. On their transfer the crop remained subject to the lien of the mortgage. After parting with the crop, they remained personally liable for the payment of any balance remaining due on the note after the proceeds of the crop had been credited thereon. Barnhart and White, therefore, retained an insurable interest in the property, measured by the extent of their liability on the mortgage debt.

As to the right of the bank to recover, it is well settled that under this particular "loss payable clause" the bank was the appointee of Barnhart and White, and its right to recover is measured by that of Barnhart and White. (Coffin v.Northwestern Mutual Fire Assn., 43 Idaho 1, 249 P. 89; Hill v.International Indemnity Co., 116 Kan. 109, 225 P. 1056.) As stated in the original opinion, the bank was entitled, as against appellant, to recover the amount of the loss.

We adhere to the original opinion.

Budge, Givens, Taylor and T. Bailey Lee, JJ., concur.