## Facts

- A vendor and a purchaser entered into a contract for the sale of real property.
- The purchaser took possession before legal title transferred and before the purchase price was fully paid.
- The contract required the purchaser to maintain fire insurance on the premises in the vendor’s name, and the purchaser paid the premiums.
- A fire destroyed a building on the property before closing.
- The vendor, as named insured, received about $4,650 in insurance proceeds.
- The purchaser tendered the unpaid contract balance minus the insurance proceeds and demanded that the proceeds be credited against the purchase price.
- The vendor refused, seeking to keep the insurance proceeds and also collect the full unpaid balance.
- The case was submitted on stipulated facts, including that the insurance was for the protection of both parties.

## Issues

1. When a land sale contract requires the purchaser in possession to procure and pay for fire insurance in the seller’s name, must insurance proceeds received by the seller after a pre-closing fire be credited against the unpaid purchase price?
2. May the seller retain the insurance proceeds and still demand the full contract balance from the purchaser?

## Decision

- The Court of Appeals of New York affirmed judgment for the purchaser.
- The court held that the vendor had to apply the fire insurance proceeds as a credit against the remaining balance of the purchase price.
- Because the purchaser tendered the balance net of the proceeds, the vendor was not entitled to demand additional payment of the amount covered by the insurance.

## Legal Principles

- If a land sale contract requires the purchaser to insure the property against fire in the seller’s name and the purchaser pays the premiums, insurance proceeds received by the seller after a pre-closing loss must be credited against the unpaid purchase price.
- The result turns on whether the insurance was maintained pursuant to the parties’ contract and at the purchaser’s expense for mutual protection, rather than obtained independently by the seller for the seller’s own account.
- Allowing the seller to retain the proceeds and also collect the full contract balance would amount to an impermissible double recovery for the same loss.

## Conclusion

Because the purchaser was contractually obligated to procure and pay for fire insurance in the seller’s name for both parties’ protection, the seller was required to credit the insurance proceeds against the unpaid purchase price and could not keep the proceeds while also demanding the full remaining contract balance.


Raplee v. Piper, 143 N.E.2d 919 (N.Y. 1957)