Insurance Co. v. Updegraff

• Decision Date: 15 September 1853
• Citation: 21 Pa. 513
• Parties: Insurance Company <I>versus</I> Updegraff.
• Court: Pennsylvania Supreme Court

21 Pa. 513

Insurance Company versus Updegraff.

Supreme Court of Pennsylvania.

September 15, 1853.

ERROR to the Common Pleas of Lycoming county.

COPYRIGHT MATERIAL OMITTED

Scates, with whom was Pollock, for plaintiff in error.—As to the second assignment, relating to the rejection of evidence of the value of the lot, it was said that if Updegraff sustained no loss, neither he, nor Winegardner in his name, could recover. That Updegraff retained the legal title as security for the purchase-money. That that interest only was insured by him — after the insurance and before the fire, he received on account $1108, leaving a balance of about $1200. It was contended that if the value of the premises after the fire equalled or exceeded $1200, as it was said the defendants were prepared to prove, then Updegraff sustained no damage. That the contract of insurance is one of indemnity, and the contract was with Updegraff. That the lot of ground being full security to Updegraff for the balance of the purchase-money, and he having received from Winegardner more than the full value of the buildings before and since the insurance (the appraised value of the building being stated to be $1500), he had at the time no insurable interest and consequently sustained no loss. That in this view the value of the lot was material, and evidence of it should have been received.

It was said that in the present case Updegraff cannot recover, because he has sustained no loss; and Winegardner, his vendee, cannot recover, because he is not a party to the contract; that there was no evidence that the insurance was made for him, by his direction, with his knowledge or consent. The application was made, money paid, note given, and all other acts done by Updegraff, and his interest alone insured.

As to the third bill of exceptions: It was said that the evidence offered ought not to have been received. The contract of insurance is to be construed by its own terms, expressed in the policy, and it cannot be varied by parol proof: New York Gas-Light Co. v. The Mechanics' F. I. Co., 2 Hall 108; Thompson v. Ketchum, 8 Johnson R. 189.

That conversations at the time of its execution are inadmissible: 13 Mass. 99; Id. 172; Ham. on Ins. 79.

As to the second and third points, it was, inter alia, observed, that a policy against loss by fire is a personal contract, and a contract of indemnity to the assured only: Ham. on Ins. 7; 1 Hall 111-12.

The party insured must have a property in the subject insured, or he can sustain no loss: 4 Bro. P. Ca. 431; 2 Atk. 554; Ham. on Ins. 18.

If the insured parts with his interest before loss happens, so that he has no interest left, he cannot recover: 2 Pick. 249. It was said that if a recovery can be had in this case, it must be upon the ground that Updegraff has sustained a loss by the fire. It was said that he was not a trustee for Winegardner, and that the latter could not avail himself of the insurance, not being a party to it, and it not having been assigned to him, as prescribed in the policy, with the assent of the Company. That Winegardner was liable to Updegraff on the contract of sale. The case of Smith v. Ins. Co., 5 Harris 253-260, was cited.

It was said that if Updegraff was entitled to recover, the company have the right of subrogation to all his securities, as against Winegardner, his vendee: 5 Harris, above cited; 6 Mass. 81.

Maynard and Armstrong, for defendant in error.—The parties had valued the property at $2800. The house was said to be worth from $1500 to $1600. This latter sum deducted from $2800 will leave $1200 for the lot. There remained due to Updegraff at the time of the fire $1419.60. This would leave to Updegraff an interest in the building of $219.40. If he had an insurable interest he may recover damages done to the property not exceeding the sum insured: 9 Barr 199.

But the plaintiffs considered the value of the lot, irrespective of the buildings insured, as irrelevant. Updegraff held the legal title. The executory contract was not to be completed till April, 1855, when the last payment became due. Updegraff's interest pervaded the entire premises, and it did not attach specifically to the lot exclusive of the building. He had the legal title in both lot and building. It was a higher species of claim than a mere security. Some of the cases cited on part of the plaintiff in error, were cases where the legal title had been parted with, and security by mortgage or otherwise taken, and insurance on the security.

The insurance in this case was not on the lot, but upon the buildings; and the accidental increase or diminution of the value of the lot, on which the buildings were erected, could not affect the question as to recovery for the value of the buildings in case of their destruction. With as much propriety could it be alleged that in case the value of the real estate rise between the time the policy was effected and the time of the loss, to the value of the insurance, that no recovery could be had on the policy, in the case of injury to the building by fire.

The plaintiff was the legal owner of the property, and he insured it. The fact that he had contracted to sell it was not material, as it respected the rights of either plaintiff or defendant. The suit is in the name of Updegraff, and as far as the right of the company is concerned, it is immaterial whether Updegraff receives the amount received, or whether Winegardner receives it.

The evidence of the agent was not received to vary the terms of the contract, but for the purpose of showing that all the facts of the case were disclosed at the time of the application: 2 W. & Ser. 545.

The opinion was delivered, September 15, by LEWIS, J.

This was an action on a policy of insurance effected by the vendor after articles for the sale of the property and before conveyance. The sum due to the vendor, at the time of the insurance, was $2300, which was reduced by payments afterwards, so that the sum due to him at the time of the loss was only $1192. The verdict was in his favor for the sum of $1080.50; a sum not sufficient to cover the whole extent of his interest. The house was destroyed by fire. The defence was that the lot is sufficient security for the unpaid purchase-money, and that the insured has no insurable interest beyond.

It is sometimes stated, in general terms, that by the contract of sale the purchaser of real estate becomes in equity the owner; but this rule applies only as between the parties to the contract, and cannot be extended so as to affect the interests of others. The purchaser, before the contract is carried into effect, cannot, against strangers to the contract, enforce equities attaching to the property: Darts. Vend. & Purch. 115; 3 Mylne & Craig, 70. A stranger cannot set up the equitable title of the vendee to defeat an ejectment brought by the vendor against the clear equitable title of the vendee. At law the vendor, before payment of the purchase-money and delivery of the conveyance, is, to all intents and purposes, the owner of the estate. It is true that he is a trustee for the vendee, who, as between the parties to the contract, is bound to take the estate subject to every loss which may happen to it without the fault of the vendor, and is consequently entitled to every benefit accruing to it after the agreement: Paine v. Meller, 6 Ves. Jun. 349; Sugden 199. The right to the benefits of the purchase...