Grevemeyer v. Southern Mutual Fire Insurance

The opinion of the court was delivered,

by Thompson, C. J.

Four years after the plaintiff had effected an insurance on the property covered by the policy of the defendant on which the suit was brought,.he sold and conveyed it to a third party, one Donahoe, and having received a portion of the purchase-money, took a judgment for the balance. Some months after this the property was destroyed by fire. Not having assigned the policy to the purchaser, he now claims to recover on it in satisfaction of his judgment, on the ground that to that extent he has an interest in the property sold and conveyed.

That there is material difference, especially in the law of insurance, between a mortgage and judgment is beyond question. The able argument of the counsel for the defendant in error, and the authorities cited by them, very clearly show this. In Britton’s Appeal, 9 Wright 172, Strong, J., said: “They (mortgages) are in form defeasible sales, and in substance, grants of specific security, or interest in land for the purpose of security. Ejectment may be maintained by a mortgagee, or he may hold possession on the footing of ownership and with all its incidents.”

That a mortgagee has an insurable interest on property is so well understood, that it would be a waste of time to cite authorities to prove it. Hence it is a very common thing to strengthen the ■security by insurance of the property for the benefit of the mortgagee. That its purpose is ordinarily a security, does not destroy the legality of the insurance. The interest in the property pledged or mortgaged is co-extensive with the security it is to satisfy. Being a specific lien, no other property is answerable. It is therefore a specific pledge of definite property, and the mortgagee has necessarily an interest in it.

But a judgment is a general, and not a specific lien: Ruth’s Appeal, 4 P. F. Smith 173. If there be personal property of the debtor, it is to be satisfied out of that. If there be not, then it is a lien on all his real estate without discrimination, and hence the plaintiff is not interested in the property as property, but only in his lien. As was said in Coover v. Black, 1 Barr 493, the judgment-creditor has neither jus in re nor ad rem, as regards the defendant’s property. He has a lien, and the law gives a right to satisfaction out of the property, and that is all. Eor the same doctrine see Reid’s Appeal, 11 Harris 476, and Conrad v. Atlantic Ins. Co., 1 Peters 384. To these might be added citations of authorities almost without limit.

The. result of all this is, that the plaintiff having sold and conveyed the property in question before its destruction by fire, taking only a judgment for the unpaid purchase-money, had no interest in the property when it was destroyed. That the judgment, being for purchase-money, did not draw after it a specific pledge of the land, as in case of a mortgage, is shown by Ruth’s Appeal, supra. Like any other judgment, it was a general lien, and to be satisfied by execution of the personal property of the debtor first, and after that out of any other estate as well as that for which it was given to secure purchase-money.

This want of interest in the property was a complete answer to the plaintiff’s action, and renders it unnecessary to consider other questions considered in the argument.

Judgment affirmed.