Phenix Ins. v. Chadbourne

Nelson, J. It is perfectly clear, from the facts agreed upon in this case, that the insurance on the advances made by Parsons & Loud on the [301] credit of the vessel and freight were effected at the defendants ’ request, at their cost, and for their benefit, and that Parsons & Loud were bound by their contract with the defendants to apply the insurance money, when received, to the payment of the debt incurred on account of the advances. The receipt of the insurance money by Parsons & Loud, therefore, operated at once as an extinguishment of the debt, and they could thereafter have maintained no action against the defendants for its recovery. The debt having been thus satisfied, nothing, of course, passed by the formal assignment of the claim by Parsons & Loud to the libelant. For the same reason, by paying the loss "the libelant acquired no right by way of subrogation to enforce the debt against the defendants. It could not, by paying the loss, get by subrogation a right which the assured did not possess, and it makes no difference that it had no notice of the arrangement between Parsons & Loud and the defendants when it issued the policy. All this has become settled law in this court by the reeout decision of the supreme court in Phœnix Ins. Co. v. Erie & Western Transp. Co., 117 U. S. 312, 6 Sup. Ct. Rep. 750, 1176. Libel dismissed, with costs.