Underwood v. Winslow , 234 Mass. 550 ( 1920 )

Braley, J.

We treat the supplemental bill as amended as an original bill, and come to the merits of the questions raised by the record.

The plaintiff under the final decree was entitled, upon affirmance by a decree after rescript, to an immediate reconveyance of the real property which the bankrupt in fraud of creditors had conveyed to the defendant Winslow, who acted as the agent of the defendant bank, a preferred creditor, for whose sole benefit he took and retained title. But no transfer as yet has been made, and, Winslow having insured the property in his own name, the cost of which was paid by the bank which had the beneficial interest, and the buildings having been totally destroyed by fire and the loss adjusted, the plaintiff seeks to obtain the proceeds which by stipulation, of the parties is held by a depositary to abide the result of the litigation.

The plaintiff as well as Winslow, to whom hereafter we shall refer as the defendant, had an insurable interest in the property at the date of the policies and of the fire. Fowle v. Springfield Fire & Marine Ins. Co. 122 Mass. 191. Wainer v. Milford Mutual Fire Ins. Co. 153 Mass. 335, 341. Insurance Co. v. Thompson, 95 U. S. 547.

To maintain the bill the plaintiff, who did not insure, must show that in equity and good conscience the money belongs to him, or, in other words, that it was received to his use. Foote v. Cotting, 195 Mass. 55, 63. Cole v. Bates, 186 Mass. 584, 586. It was said by Morton, J., in Harrison v. Pepper, 166 Mass. 288, 289, where the questions were, whether the neglect by a tenant for life to insure was in the nature of voluntary or permissive waste, and the dwelling house which was insured by the tenant in his own name for his own benefit having been damaged by fire, whether the remainderman could in equity recover the sum received by the tenant, that “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. . . . The contract of insurance is a personal contract, and inures to the benefit of the party with whom it is made, and by whom the premiums are paid.” It is a contract of indemnity against loss which does not rim with the land, for the sum paid is in no proper or just sense the proceeds of the property. King v. State Mutual Fire Ins. Co. 7 Cush. 1.

The plaintiff contends and the judge has found, that in a conversation the plaintiff said to the defendant, he should hold him “responsible for any loss or injury to that property or any loss of it,” and “furthermore, you must keep that property insured,” to which the defendant replied, “You needn’t worry about that, the property is amply insured, ... it is just as much for the benefit of the bank as it is for your benefit that the property should be kept insured, and it will be kept insured.” But the evidence is reported, and on examination it is shown that this conversation is only part of the negotiations. The letter to counsel for the bank, which is subsequent to the conversation, unequivocally states the plaintiff’s position, and is his final word. It reads in substance, that having discussed with the referee in bankruptcy the suggestions made by the bank’s counsel, that in the event of the decree being affirmed on appeal, that “I, as trustee, will reimburse Mr. Winslow if he proceeds to pay . . . the cost of the insurance. ... I wish to state that ... I can see no reason for making any such agreement and . . . shall certainly endeavor to hold Mr. Winslow responsible if he neglects to keep the property insured and a loss results.” The judge also found that while the bank paid for “ and took out insurance in the name of Winslow after the decision and decree of the trial court,” the president of the bank and its counsel “intended the insurance to be for the benefit of the bank solely, and that meant the plaintiff should have no advantage from it, though at the time they knew they had no valid claim to the property unless the decree were reversed.”

The defendant and the bank sustained no fiduciary relations to the plaintiff. They were adversaries, each striving to hold the property. It apparently would have been for their mutual advantage to have come to some agreement whereby insurance could be effected, payable in case of loss as their respective interests might appear. The plaintiff however with a full understanding of the situation deemed it inadvisable to bear any part of the cost, and having refused to contribute, neither the defendant nor his principal is called upon to make him a donation.

It is manifest under our decisions that no valid and binding contract has been shown, and, the money received from the insurance not having taken the place of the property, the plaintiff has no equitable rights. Harrison v. Pepper, 166 Mass. 288, 289. Boston Marine Ins. Co. v. Proctor, 168 Mass. 498. Brighton Packing Co. v. Butchers Slaughtering & Melting Association, 211 Mass. 398. The decree for the plaintiff must be reversed, and a decree is to be entered dismissing the bill.

Ordered accordingly.