11. San Miguel Brewery v. Law Union and Rock Insurance Co.

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  San Miguel Brewery V. Law Union And Rock Insurance Co. (192! AC#S$  In the contract of   mortgage, the owner P.D. Dunn had agreed, at his own expense, toinsure the mortgaged property for its full value and to indorse the policies in such manner as to authorize the Brewery Company to receive the proceeds in case of loss and to retainsuch part thereof as might be necessary to satisfy the remainder then due uponthe mortgage debt. Instead, however, of effecting the insurance himself Dunn authorizedand reuested the Brewery Company to procure insurance on the property in the amountof P! ,### at Dunn$s expense. %an &iguel insured the property only as mortgagee. Dunn sold the property to 'enry'arding. (he insurance was not assigned by Dunn to 'arding. )hen it was destroyed byfire, the two companies settled with %an &iguel to the extent of the mortgage credit. *(C+ bsolved the - companies from the difference. 'enry 'arding is not entitled to thedifference between the mortgage credit and the face value of the policies. 'enry 'ardingappealed. ISSU%$ !. )/ %an &iguel has insurable interest as mortgagor only to the extent of the mortgage credit 0 12%-. )/ 'arding has insurable interest as owner 0 /3 RULI&'$ affirmed  section 19 of   the Insurance Act: a change of interest in any part of a thing insured unaccompanied by a correspondingchange of interest in the insurance, suspends the insurance to an euivalent extent, untilthe interest in the thing and the interest in the insurance are vested in the same person  section 55: the mere transfer of a thing insured does not transfer the policy, but suspends it until thesame person becomes the owner of both the policy and the thing insured. 4ndoubtedly these policies of insurance might have been so framed as to have been5payable to the %an &iguel Brewery, mortgagee, as its interest may appear, remainder towhomsoever, during the continuance of the ris6, may become the owner of the interestinsured.5 7%ec 8, ct /o. -8-9.: %uch a clause would have proved an intention to insurethe entire interest in the property, not merely the insurable interest of the %an &iguelBrewery, and would have shown exactly to whom the money, in case of loss, should be paid. But the policies are not so written. (he blame for the situation thus created rests, however, with the Brewery rather thanwith the insurance companies, and there is nothing in the record to indicate that theinsurance companies were reuested to write insurance upon the insurable interest of theowner or intended to ma6e themselves liable to that extent   If by inadvertence, accident, or mista6e the terms of   the contract were not fully setforth in the policy, the parties are entitled to have it reformed. But to ;ustify thereformation of a contract, the proof must be of the most satisfactory character, and it mustclearly appear that the contract failed to express the real agreement between the parties.In the case now before us the proof is entirely insufficient to authorize reformation.
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