MORTGAGOR AND MORTGAGEE   751

(b) MORTGAGOR AND MORTGAGEE.4
(1) Where the Mortgagor Agrees to Insure.
CHIPMAN v. CARROLL.

Supreme Court of Kansas, 1894.
53 Kans. 163, 35 Pac. 1109, 25 L. R. A. 305.

HORTON, C. J.: The judgment upon the mortgage of Frank S. Carroll and wife to Daniel L. Chipman was rendered November 27, 1889, for $1,636.64. The insurance policy which is involved in this case was obtained by Frank S. Carroll on March 29, 1890. The dwelling was burned and loss occurred on the 13th of April, 1890. The judgment rendered has not been paid or satisfied in whole or in part. The insurance company issuing the policy admitted that it was ready to pay $1,200 due under the policy, to the party entitled to receive it.

The question that we are called upon to decide in this case is, whether Chipman has an equitable claim or lien upon the money due on the policy. If there was no covenant in the mortgage or agreement between the parties that the premises would be insured for the benefit of the mortgagee, the mere fact that Chipman's mortgage covers the property insured and the insurer is personally liable for the debt gives Chipman, the mortgagee, no corresponding claim upon the policy or the proceeds of it. * * * But where a mortgage provides that the mortgagor shall keep the premises insured for the benefit of the mortgagee, and in fulfillment of this covenant he takes out a policy of insurance in his own name, which is not assigned to the mortgagee or made payable to him, the mortgagee is regarded as having an equitable lien upon the proceeds of the policy. (1 Jones, Mort., sec. 400, and cases cited.)

It was expressly ruled in Mills v. Aldrich, 31 Mich. 408, that

himself of his contract right against the vendee for the purchase-price, has the grantor suffered any "loss" by the destruction of the building sold?

Illinois takes the view that under a contract to convey the vendor has parted with neither the legal nor equitable title until all conditions precedent to a duty to convey have been performed. Until that time apparently the risk of loss is on the vendor and he may recover the insurance on his own account. See Budelman v. American Ins. Co. (1921) 297 Ill. 222, 130 N. E. 513, and Lombard v. Chicago Sinai Congregation (1872) 64 Ill. 477.

4 For the respective rights of a debtor and an unsecured creditor in a policy payable to the creditor see Chap. 3, Section 4 (a), p. 708.

For valuable discussions of the problems involved in this section, see Harvey, Wm., Insurance of Limited Interests (1894) 10 L. Quar. Rev. 48: McClain, Emlin, Insurance of Limited Interests (1898) 11 llarv. L. Rev. 512; Bament, W. N., The Interest of a Mortgagee under a Policy of Fire Insurance published as Chapter XI, The Fire Insurance Contract (1922) and Levy, Leo, The Interest of a Mortgagee under a Policy of Fire Insurance published as Chapter XII, The Fire Insurance Contract (1922).