Loy v. Home Ins. Co.

• Decision Date: 13 December 1877
• Citation: 24 Minn. 315
• Parties: JANE LOY <I>vs.</I> THE HOME INSURANCE COMPANY, ETC.
• Court: Minnesota Supreme Court

24 Minn. 315

JANE LOYvs.

THE HOME INSURANCE COMPANY, ETC.

Supreme Court of Minnesota.

December 13, 1877.

Appeal by defendant from an order of the district court for Olmsted county, Mitchell, J., presiding, denying a motion for a new trial in an action on a policy of insurance.

Henry C. Butler, for appellant.

Start & Gove and P. M. Tolbert, for respondent.

CORNELL, J.

The policy on which this action is brought contains the following among other conditions:

"If the property be sold or transferred, or any change takes place in title or possession, (except by reason of the death of the insured,) whether by legal process or judicial decree, or voluntary transfer or conveyance, * * * this policy shall be void."

The property insured consisted of a dwelling-house, and certain furniture and wearing apparel therein contained, situate upon premises belonging to the respondent. After the issuance of the policy the respondent mortgaged the premises, and the same were sold under a power of sale, upon a foreclosure of the mortgage by advertisement, pursuant to the statute. After the sale, and before the period for redemption had expired, the loss occurred, the respondent still being in possession of the premises.

The question for consideration is, whether this foreclosure sale was "a sale, transfer, or change in title," within the meaning of the foregoing condition, such as avoided the policy.

In construing a condition of this character, if, upon a consideration of the whole contract, it is uncertain whether the language of the stipulation is used in an enlarged or restricted sense, or if it is fairly open to two constructions, one of which will uphold and the other defeat the claim of the insured to the indemnity which it was his object in making the insurance to obtain, that should be adopted which is most favorable to the insured, and most in harmony with such, the main purpose of the contract on his part. The reasons for this are two-fold: the tendency of any such stipulation is to narrow the range and limit the force of the underwriter's principal obligation. It is also inserted by him for his own benefit and in language of his own choice. If any doubt arises as to its meaning the fault is his in not making use of more definite terms in which to express it; hence the rule of strict construction against him, and the liberal one in favor of the assured, which prevail under such circumstances. Hoffman v. Ætna Ins. Co. 32 N. Y. 405; Westfall v. Hudson Riv. Ins. Co. 2 Duer, 495; Ins. Co. v. Wright, 1 Wall. 456; West. Ins. Co. v. Crapper, 32 Pa. St. 351.

Applying these principles, a correct interpretation of this condition of the policy would seem to be attended with but little difficulty. In the first place it makes a sale or transfer of the property a cause for avoiding the policy. Within the meaning of the stipulation this refers to an absolute and completed, and not a conditional or incomplete, sale or transfer; in other words, a sale that wholly divests the owner of the property of all insurable interest therein.

The succeeding clause, which gives a like effect to any "change in title, * * *...