Cromwell v. . the Brooklyn Fire Ins. Co. ( 1870 )

Cromwell, as assignee of the contract between Chesley and Eichenlaube, became entitled to its performance. Part of that agreement was, that Eichenlaube should keep the premises to which the contract related insured for the benefit of Chesley.

At the time of the fire, Eichenlaube had a policy with the defendants covering the premises, in his own name and for his own benefit, but none for the benefit of Chesley or Cromwell. Cromwell recovered judgment against Eichenlaube upon the contract assigned to him by Chesley for an amount greater than the sum insured. The judgment was good evidence in this case to prove that the contract with Eichenlaube was in full force, and that the obligation to insure still rested on him.

As between Cromwell and Eichenlaube there can be no doubt of the right of Cromwell in equity to receive the insurance money upon the happening of a loss. That right arises from Eichenlaube's contract to insure for the benefit of Chesley, and the fact that he had not paid the sum due under the contract. Had there been no judgment, Cromwell must have proven in this action that there was a sum due to him on the contract with Chesley. The judgment established that fact without other proof, as Eichenlaube, the defendant in that action, was the only party interested in contesting the amount due.

The plaintiff in due season notified the insurance company of his equitable claim to be paid the amount due under the policy to Eichenlaube, by reason of the loss against which the company had insured. The company have not denied their policy, nor their loss, nor their liability to pay the amount. On the contrary, admitting their liability, the company have paid the loss to Eichenlaube, and insist that such payment is a full discharge of their liability. The company thereby refused to recognize the right of Cromwell to charge them as a trustee of the fund due upon the policy. The company assumed the hazard of resisting the equity claimed by the plaintiff.

If the company erred in their interpretation of the law, their payment to Eichenlaube is no discharge of their liability for the loss arising under their policy.

The case of Carter v. Rockett (8 Paige, 437), is against the construction of the law assumed and acted upon by the company. That case is a full authority for the claim made by Cromwell. This claim does not operate as an assignment of the policy, against which the company by a condition of that instrument stipulated. They become by reason of the facts, and the notice given by Cromwell, trustees of a fund which they were equitably bound to pay to the party justly entitled. The party entitled in this case was the plaintiff, and the payment to Eichenlaube is no discharge.

The judgment should be affirmed with costs.

All concur, except LOTT, J., who did not sit.

Judgment affirmed with costs.