San Miguel Brewery v. Law Union Inc., 40 Phil.

674 (1920)
FACTS:
In the contract of mortgage, the owner P.D. Dunn had agreed, at his own
expense, to insure 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 retain such part thereof as might be necessary to
satisfy the remainder then due upon the mortgage debt. Instead, however, of
effecting the insurance himself Dunn authorized and requested
the BreweryCompany to procure insurance on the property in the amount of P15,
000 at Dunn's expense. San Miguel insured the property only as mortgagee. Dunn
sold the propert to Henry Harding. The insurance was not assigned by Dunn to
Harding. When it was destroyed by fire, the two companies settled with San
Miguelto the extent of the mortgage credit.
ISSUE: W/N San Miguel has insurable interest as mortgagee only to the extent of
the mortgage credit
RULING:
Yes. Now the Brewery, as mortgagee of the insured property, undoubtedly
had an insurable interest therein; but it could not, in any event, recover upon these
policies an amount in excess of its mortgage credit.