been paying premiums for full insurance, whereas in reality he has only been paying premiums for part insurance. § 24. Double Insurance Contribution.-Growing out of the doctrine of indemnity is another; namely, that where different policies exist on the same insurance, subject and risk, the co-insurers stand somewhat in the attitude of cosureties toward one another, to this extent, that each insurer in fire insurance must contribute ratably toward the loss without regard to the dates of the several policies-assuming, of course, that the policies are subsisting at the time of loss. Except for the usual contract limitation called the pro rata clause, the insured might recover his loss in full against any of the co-insurers, but not exceeding the amount of the policy, leaving the insurers to apportion the loss by subsequent contribution among themselves.' The rule of double insurance contribution in marine insurance as applied in America is quite different, and is founded upon the theory that policies attach in the order of their date. This rule will be considered in discussing the clauses of the marine policy. § 25. Subrogation.-Another corollary incident to the doctrine of indemnity is that of subrogation. Upon paying the loss under a policy the insurer becomes subrogated pro tanto to such rights and remedies as the insured may have against any third persons who are primarily liable to him for his damage sustained. This rule likewise grows out of the principle that insurance is designed to protect the insured from loss, and not to be the occasion of gain to him. Otherwise the insured on pursuing his double remedy might be indemnified twice over.1 The United States Supreme Court says: "In fire insurance, as in marine insurance, the insurer, upon paying to the assured the amount of a loss of the property insured, is doubtless subrogated in a corresponding amount to the assured's right of 1 Wiggin v. Suffolk Ins. Co., 18 Pick. 145. Lucas v. Jefferson Ins. Co., 6 Cow. 635. Note in 28 Am. Dec. 121. * Castellain v. Preston, 11 Q. B. D. 381. Jackson Co. v. Boylston Mut. Ins. Co., 139 Mass. 510. Liverpool & G. W. Steam. Co. v. Phenix Ins. Co., 129 U. S. 397. action against any other person responsible for the loss. But the right of the insurer against such other person does not rest upon any relation of contract or of privity between them. It arises out of the nature of the contract of insurance as a contract of indemnity, and is derived from the assured alone, and can be enforced in his right only. By the strict rules of the common law, it must be asserted in the name of the assured. In a court of equity or of admiralty, or under some State codes, it may be asserted by the insurer in his own name; but in any form of remedy the insurer can take nothing by subrogation but the rights of the assured, and if the assured has no right of action none passes to the insurer." 1 Thus if a common carrier carelessly starts a fire by sparks from a locomotive, which burns the property of the insured, the insurer upon paying the loss under the policy becomes subrogated to the right of recourse which the insured had against the common carrier. The latter must not be exonerated or released without the consent of the insurer.2 A release given to the negligent party by the insured without the consent of the insurer will in such a case bar his right of action upon the policy.3 If the wrong-doer pays the assured after the insurers have made a payment under the policy, it is a fraud upon the latter, provided the wrong-doer has knowledge of the fact, and will not protect him from liability to the insurers. If the insurers, after payment of the damage by the wrong-doer to the insured, voluntarily pay the policy, they cannot maintain an action. against the wrong-doer; and if the assured receives his damages from the wrong-doer before payment is made by the insurers under the policy, the amount so received will be applied pro tanto in discharge of the policy. Inasmuch as the insurers are only entitled to such rights as are vested in the insured, there will be no subrogation in case the insured has stipulated in a bill of lading from the common carrier that the latter shall have the benefit of insurance; and St. Louis, I. M. & S. Railway Co. v. Commercial Union Ins. Co., 139 U. S. 235. 2 Newcomb v. Cincinnati Ins. Co., 22 Ohio State, 382; s.c. 10 Am. Rep. 746. Dilling v. Draemel, 16 Daly, 104 (1890). Hall v. The Railroad Companies, 13 Wall. 367. Conn. Fire Ins. Co. v. Erie Ry. Co., 73 N. Y. 399. in case the insured has been so imprudent as to agree to give the insurers the benefit of subrogation, and has also made an inconsistent stipulation with the common carrier, he may find himself without security for his loss.1 Similarly, where a mortgagee has taken out a policy for his own benefit, and not for the benefit of the mortgagor, upon the property of the mortgagor covered by the mortgage, it is held by the better authority, that, even in the absence of an express provision to that effect in the policy, the insurer upon paying the mortgagee the insurance money becomes subrogated pro tanto to the mortgage security as against the mortgagor.2 But where the mortgagor has any interest in the policy, either by payment of premiums or by agreement with the mortgagee, then there will be no subrogation in favor of the insurers, for the latter take only such rights as the assured can give.3 A mortgagee is not required to exhaust his remedy upon the mortgage before enforcing his policy, and he can maintain his action on the policy although the property after the fire is still equal in value to the amount of the mortgage debt.* In case the insured under a life policy is killed, or in case property of the insured under a fire policy is feloniously destroyed, no right of subrogation exists in favor of the insurers." § 26. Insurable Interest: Fire.-Every interest in property, or in relation thereto, or liability in respect thereof, of such a nature that a contemplated peril might directly damnify the insured, is an insurable interest. A learned justice of the New York Court of Appeals, who has made the subject of insurance law his profound study, states the rule in the following words: "It would seem, therefore, that whenever there is a real interest to protect, and a person is so situated with respect to the subject of insurance that its destruction would or might reason ' Platt v. Richmond, Y. R. & C. R.R. Co., 108 N. Y. 358. Fayerweather v. Phenix Ins. Co., 118 N. Y. 324. 2 * Carpenter V. The Providence Washington Ins. Co., 16 Peters, 495. Contra, International Trans. Co. v. Boardman, 149 Mass. 158. Kernochan v. N. Y. Bowery Fire Ins. Co., 17 N. Y. 441. Louden v. Waddle, 98 Penn. State, 242. Excelsior Fire Ins. Co. v. Royal Ins. Co., 55 N. Y. 343. Ins. Co. v. Brame, 95 U. S. 754. ably be expected to impair the value of that interest, an insurance on such interest would not be a wager within the statute, whether the interest was an ownership in, or a right to the possession of the property, or simply an advantage of a pecuniary character having a legal basis, but dependent upon the continued existence of the subject. It is well settled that a mere hope or expectation, which may be frustrated by the happening of some event, is not an insurable interest." 1 An insurable interest may be legal or equitable, vested or contingent. It may be an existing interest-as, for example, the ownership in fee, or for life, or for years, or a right by mortgage or other lien-or it may be merely an inchoate interest, like a ship-owner's right to freight on goods laden on his ship, or the equitable right to a title under an executory contract of purchase, or an interest in expected profits on goods consigned for sale. A tenant by curtesy or dower may insure. The interest may arise from some title to the property or from a mere liability in respect to the property. An insured owner of property does not lose his insurable interest by giving a lease or a mortgage, or making an executory contract to sell the property, or even by a foreclosure, so long as any title or equitable right to the property remains in him. And although his title to the insured property may be defective or voidable, it may still be the basis of a valid insurance. But a mere contingent or expectant interest in anything, not founded upon an actual right to a thing, nor upon any valid contract for it, is not insurable. Lord Eldon illustrates this distinction in an elaborate opinion upon marine insurance, where the same general doctrine prevails. Suppose A to be possessed of a ship limited to B in case A dies without issue; 1 6 66 Franklin Fire Ins. Co. v. Drake, 2 B. Mon. (Ky.), 47. 5 2 Fenn v. New Orleans Mut. Ins. Co., 53 Ga. 578. Nat. Filtering Oil Co. v. Citizens Ins. Co., 106 N. Y. 535. Hubbard v. Hartford Fire Ins. Co, 33 Iowa, 325. 'Davis v. Quincy Mut. Fire Ins. Co., 10 Allen, 113. Strong v. Manufs. Ins. Co., 10 Pick. 40. Essex Savings Bank v. Meriden Fire Ins. Co., 57 Conn. 335 (1889). that A has twenty children, the eldest of whom is twenty years of age; and B is ninety years of age; it is a moral certainty that B will never come into possession, yet this is a clear interest. On the other hand, suppose the case of the heir-at-law of a man who has an estate worth £20,000 a year, who is ninety years of age, upon his death-bed, intestate, and incapable from incurable lunacy of making a will, there is no man who will deny that such an heir-at-law has a moral certainty of succeeding to the estate; yet the law will not allow that he has any interest, or anything more than a mere expectation." 1 It would be difficult to enumerate all the classes of persons who may have an insurable interest in property their own, or held by them for others, or to which they have some right. Among them may be named owners, trustees and cestuis que trust, executors and administrators, co-partners consignees, factors, agents, mortgagors and mortgagees, lienors, vendors and vendees, lessors and lessees, sureties, indorsers, common carriers, warehousemen, wharfingers, innkeepers, pledgees, and depositaries generally, stockholders in property of the corporation, and creditors and sheriffs in property attached.2 8 A mere trespasser or intruder, or one who has no color of title to property, has no insurable interest in it; and it has also been held that a creditor at large, having no specific lien upon the property of his debtor, has no insurable interest in such property. Whether a judgment creditor has an insurable interest before an attachment or levy upon his debtor's property, is open to question. On principle, as well as on the authority of a New York case, it would seem that he has.5 But the question is probably of no great practical importance, for an insurer would not be apt to take such a risk. From the list just enumerated, the fact will be inferred that the same person may have different insurable interests in the same property, and also that different persons may have sepa.rate insurable interests in the same property. Where the 1 Lucena v. Craufurd, 2 B. & P. N. R. 324. 2 Strong v. Mfrs. Ins. Co., 10 Pick. 40; s. c., 20 Am. Dec. 507, note 510518. 3 * Grevemeyer v. Southern Mut. Ins. Co., 62 Pa. St. 340. Rohrback v. Germania Fire Ins. Co., 62 N. Y. 47. 6 Ins. Cos. v. Thompson, 95 U. S. Sweeny v. Franklin Ins. Co., 20 547. Carruthers v. Sheddon, 6 Taunt. Pa. St. 337. 14. |