Hill v. Cumberland Valley Mutual Protection Co.

• Decision Date: 04 January 1869
• Citation: 59 Pa. 474
• Parties: Hill <I>versus</I> The Cumberland Valley Mutual Protection Co.
• Court: Pennsylvania Supreme Court

59 Pa. 474

Hill versus The Cumberland Valley Mutual Protection Co.

Supreme Court of Pennsylvania.

November 16, 1868.

January 4, 1869.

November 16th 1868.

Before THOMPSON, C. J., READ, AGNEW, SHARSWOOD and WILLIAMS, JJ.

Error to the Court of Common Pleas of Washington county: No. 161, to October and November Term 1868 D. S. Wilson, for plaintiff in error.—The construction of the policy is to be most favorable to the insured: Western Ins. Co. v. Cropper, 8 Casey 351; Buckley v. Garrett, 11 Wright 209.

Hopkins & Lazear, for defendants in error.—It is not necessary the property should be alienated by conveyance: 1 Bouv. Law Dict. ad verbum Alienate. Hill's agreement with the company that he was sole owner, and that he would not transfer without the written consent of the company, was a warranty with which he must strictly comply: Ellis on Insurance 28; Angell on Insurance, § 193, note, 199-201; 1 Phillips on Insurance, § 874 a.; 1 Marsh. on Insurance 347; Finley v. Lycoming M. Ins. Co., 6 Casey 311; Buckley v. Garrett, supra; Dix v. Mercantile Ins. Co., 22 Ill. 272; Dreher v. Ætna Ins. Co., 18 Mo. 128; McLaren v. Hartford Fire Ins. Co., 1 Seld. 157; Murdock v. Chenango County Mut. Ins. Co., 2 Comst. 210; Adams v. Rockingham Mut. Ins. Co., 29 Maine 292; 1 Amer. L. Cases 612.

The opinion of the court was delivered, January 4th 1869, by THOMPSON, C. J.

The policy on which this suit was brought, was issued by the defendants to the plaintiff, to continue for five years from the 9th day of March 1865. On the 4th of December following, the plaintiff contracted by articles of agreement with one William D. Doak to sell to him the insured property and ground on which it stood, for $4000. One thousand dollars of the purchase-money he received; the balance was payable in three equal annual instalments from the 1st of April 1866. The possession was to be delivered on the 1st of April 1866, but as no time was fixed in the article of agreement for making title to the purchaser, it was not demandable until payment of the whole purchase-money. On the 18th January subsequent to the contract, the mills were entirely destroyed by fire; and the principal question below was, whether the plaintiff was entitled to recover on his policy, having during its currency contracted for a sale of the insured property, without the written assent of the secretary of the company, as provided by clause 6th of its regulations; or whether it was void by the terms of the supplement to the charter, passed 11th April 1844. On the trial, the learned judge reserved the question as to the effect of the contract of sale and receipt of a portion of the purchase-money without the assent of the company endorsed upon the policy, and submitted the case to the jury on the facts, who found for the plaintiff. Afterwards on argument of the reserved question the court set aside the finding of the jury, and entered judgment in favor of the defendants non obstante veredicto, and this raises the question to be considered here.

This result was arrived at by the court on technical grounds, that is, on the strength of the stipulation in the policy requiring the assent of the company to the contract of sale, and not upon the untenable ground that the plaintiff by the contract did not hold an insurable interest in the property after the execution of the contract of sale, he retaining the title as his security for the unpaid purchase-money. That could not be assumed, as a host of authorities to the contrary might be cited to show: Am. Lead. Cases, 4th ed. 626, 19 Pick. 81, 16 Wend. 385, 4 Mass. 330, 12 Ohio 305, and 7 Harris 45, are some of them. It admits not of a doubt that the plaintiff held an insurable interest in the property when it was burned. He held the legal title and possession, and three-fourths of the purchase-money remained unpaid. This is of no practical consequence as a consideration in this case, further than it meets an objection fatal in all cases of a policy separated from an interest in the subject of it. Such a policy is classed as a gambling policy, and is of no force or obligation.

The error, we think, of the learned judge below was in assuming that the contract of sale was a transfer of the insured property; a change of ownership, which being unassented to by the company, rendered the policy void. The terms of the contract itself seem to me to be a refutation of this idea. It was an executory contract, and was dependent on the payment of the purchase-money, for a transfer of the legal title. True, the vendee had a contract which might entitle him to a conveyance, and he had an equity to the extent of the purchase-money paid, contingent as to both for title, on full performance of his contract. This was an interest in the property, but was not title or ownership. According to Bouvier's Law Dictionary, ownership means "title to property; the right by which a thing belongs to some one in particular, to the exclusion of all other persons." In such contracts as this the vendee, while he has an interest in the property, has not title. He has an equity, and whether that will ripen into title, will depend upon the future; it is within the range of possibility that it never may. The nature of the equity and how it may result, is a...