Gilman v. Dwelling-House Ins. Co.

• Decision Date: 23 April 1889
• Citation: 17 A. 544,81 Me. 488
• Parties: GILMAN v. DWELLING-HOUSE INS. CO.
• Court: Maine Supreme Court

17 A. 544

81 Me. 488

GILMAN

v. DWELLING-HOUSE INS. CO.

Supreme Judicial Court of Maine.

April 23, 1889.

Report from supreme judicial court, Waldo county.

Assumpsit on a policy of fire insurance.

G. E. Johnson, for plaintiff. W. H. Fogler, for defendant.

FOSTER, J. The parties to this policy of insurance have, by the terms of their contract, avoided some of the questions arising in other cases. Oftentimes the numerous conditions annexed to the contract, upon the breach of any one of which the parties agreeing that the policy shall be void, have given rise to embarrassments and discussions in different courts, and led, in some instances, to an apparent conflict of opinion, if not of decision. The present case is free from all embarrassments arising out of any conditions ingrafted upon the policy, and but two questions are presented for our consideration: First. Had the plaintiff an insurable interest in the property destroyed? Second. Was that interest sufficiently described?

1. That the plaintiff had not the legal title to the premises or buildings destroyed is conceded. She held an agreement in writing from the one having the legal title, and upon the performance of certain conditions to be by her performed, as therein specified, the title was to be conveyed to her. The party executing this agreement had agreed to convey by quitclaim deed, on or before six years from its date, the premises in question, provided the plaintiff first pay the sum of $723.03 in certain specified amounts, and at certain specified times, agreeably to seven promissory notes. At the time this contract of insurance was entered into all the notes had matured, the last one being nearly a year overdue. Two of the notes had been paid, and the other five, with interest thereon from February 25, 1879, remained unpaid, except $55, paid January 30, 1884, being the last payment upon the notes, and more than three years prior to the loss by fire. Notwithstanding the whole amount unpaid upon the remaining notes was overdue at the time the contract of insurance was effected, the vendor had taken no steps in relation to the contract or the premises mentioned, nor had any action been taken looking towards the enforcement of the payment of the notes. The contract was therefore executory, and still subsisting between the parties to it.

If it were necessary, in order for the plaintiff to recover, that she should prove the existence of a legal title to the premises, her case would present a different question from that now under consideration. The law does not require this. An equitable title or interest in the plaintiff is all that is necessary to give validity to the contract of insurance. Strong v. Insurance Co., 10 Pick. 43. An equitable interest held under an executory contract is a valid subject of insurance. Insurance Co. v. Lawrence, 2 Pet. 25; Bone Co. v. Insurance Co., 64 Me. 470; Insurance Co. v. Dunham, (Pa.) 12 Atl. Rep. 668. In Picker v, Moore, 77 Me. 292, numerous authorities are there cited sustaining the doctrine laid down in that case, that where one executes and delivers to another an agreement to convey land to him for a fixed price payable at a certain time he thereby transmits an equitable estate; and the equitable vendor thereupon becomes the trustee of the estate for the equitable vendee, retaining the legal title as security for the purchase money. Prof. Pomeroy, in his work on Equity Jurisprudence, (section 368,) says that the vendee under an executory contract at once becomes the equitable owner of the land, and the vendor equitable owner of the purchase money, upon the execution and delivery of the contract, even before any portion of the price is paid. "It is true," he says, "that the vendee's equitable estate is incumbered or charged with a lien as security for the unpaid price, and he may by the enforcement of this lien, upon his final default in making payment, lose his whole estate in the same manner as a mortgagor may lose his interest by a foreclosure." So in Siter's Appeal, 26 Pa. St. 180, the court say: "It does not seem to be necessary to produce this effect that any part of the purchase money should be paid; it results from the contract. When a part of the purchase money is paid, the interest of the purchaser in the land is not circumscribed by the extent of the money paid, but embraces the entire value of the land over and above the purchase money due. He is treated as the owner of the whole estate, incumbered only by the purchase money. If the land increase in value it is his gain; if it decrease,—if improvements are destroyed by fire or otherwise,—it is his loss." And in Reed v. Lukens, 44 Pa. St. 200, the doctrine there stated is to the same effect,—that, after a contract for the sale of real estate, the purchaser is the equitable owner thereof, and, being responsible for the purchase money, is liable to the whole loss that may befall it, including the loss of the buildings by fire. The leading case upon this point in this country is Insurance Co. v. Lawrence, 2 Pet. 25. The assured in that case, though in possession, had only a contract for the purchase of the property, subject to a condition which had not been complied with, but of which the vendor had taken no advantage at the time of effecting the insurance, or at the time of the loss. Chief Justice MARSHALL, delivering the opinion of the court, says: "That an equitable interest may be insured is admitted. We can perceive no reason which excludes an interest held under an executory contract. While the contract subsists, the person claiming under it has undoubtedly a substantial interest in the property. If it be destroyed, the loss in contemplation of law is his. If the purchase money be paid, it is his in fact. If he owes the purchase money, the property is its equivalent, and is still valuable to him. The embarrassment of his affairs may be such that his debts may absorb all his property; but this circumstance has never been considered as proving a want of interest in it. The destruction of the property is a real loss to the person in possession, who claims title under an executory contract, and the contingency that his title may be defeated by subsequent events does not prevent...