that property, and contemplates that not only will he himself be protected from loss, but every one else who acquires his interest, and acquires the benefit of his policy. Even where there is a clause against alienation of property or policy, his conception of the policy is not changed. Insurance companies readily give their consent to the alienation, and in that case the alienee is protected.
When the property and policy have been assigned, and the insurers have consented to the assignment, if there be a condition against assignment without consent, the assignee becomes substituted to all the rights and duties of the assignor with respect to the policy. It is the assignee whose interest is insured; it is the assignee whose act will occasion a breach of condition. The assignor drops out of the contract entirely, and the assignee steps into his place with all his rights and liabilities.[1] No act of the assignor will then affect the rights of the assignee, but the distinction above indicated between an assignment of the policy only and an assignment of the property and policy must be carefully drawn. This distinction has become very important in the common case of an assignment of a policy by a mortgagor to a mortgagee as collateral security for the debt. After the assignment is made and consent is given, the question arises, Who is the insured? Is it the mortgagor or the mortgagee? If it is the mortgagee, it is obvious that any breach of condition by the mortgagor, as, for instance, an alienation of the equity of redemption, will not affect the mortgagee; while, if it is the mortgagor, such alienation will defeat the mortgagee. The question rests entirely upon the distinction between an assignment of the property and policy and the assignment of the policy only; and the courts, though inclined at first to protect the mortgagee, have finally adopted the view that the mortgagor is still the insured, and that his acts will avoid the policy. This view seems to be the prevailing view.[2]
The question arises, How far do the acts of the assignor, done before the assignment of the policy, affect the assignee? Obviously this involves the question, whether an insurance policy is negotiable or not; and it is an interesting one, though, unfortunately, one on which there is no authority. There are many dicta that a policy of insurance is not negotiable, and the tendency of the
