Page:Federal Reporter, 1st Series, Volume 4.djvu/288

 274 FEDERAL BËFOBTEB. �premises, and hence the stringent provisions to that end in theagreement of January, 1872; and it waa, of course, under- stood that the restoration of the building on the premises would enure as well to the beneût of the owners of the fee as to that of the owner of the life estate. So I say complainant dealt with the insurance not as Mr. Scammon's money, but as & f urther security f urnished under the mortgage, and as some- thing which affected the rights of ail the mortgagors in the property, and in which ail were interested. �If this be the correct view of the question the remaining question, which relates purely to the rights of the parties, ■would seem not to be difficult of solution. The provision of the policy, that the loss should be payable to the mortgagee, operated to give the mortgagee precisely the same rights and interest in the policy which it would have had if, without such words, the polioy had been assigned as collateral security to the mortgage debt. 1 Jones on Mortgages, § 407, and cases cited. The proceeds of the insurance in the hands of complainant represented the insured property and the inter- ests of ail the mortgagors therein. The control exercised over the same by the mortgagee was equivalent to an election by it under the provisions of the mortgage to collect and re- ceive the money. This being so, it was complainant's duty to use and apply it in accordance with the spirit of the pro- visions of the mortgage, and for the benefit of the parties ben- eficially interested, unless they consented to some other dis- position of it. Indeed, it is difficult to perceive why, upon general principles of equity, so far as the rights of the owners of the reversion were concerned, complainant could not have been required to have had recourse to the insurance money as collateral security for payment pro tanto of the mortgage. If, in any view of the equities of the case, complainant might, without the knowledge of the owners of the fee, agree with the life tenant to place the money back on the mortgaged prem- ises, it was bound to see that such agreement was carried out, and that the money was so used. FaUing in this, and having as mortgagee received and undertaken to deal with the insurance proceeds as a fund representing the property. ����