Manning v. North British & Mercantile Ins. Co.

• Decision Date: 04 February 1907
• Citation: 123 Mo. App. 456,99 S.W. 1095
• Court: Missouri Court of Appeals
• Parties: MANNING et al. v. NORTH BRITISH & MERCANTILE INS. CO.<SMALL><SUP>*</SUP></SMALL>

99 S.W. 1095

123 Mo. App. 456

MANNING et al. v. NORTH BRITISH & MERCANTILE INS. CO.^*

Kansas City Court of Appeals. Missouri.

February 4, 1907.

1. VENDOR AND PURCHASER — CONSTRUCTION OF CONTRACT—INJURY BY FIRE.

On the execution of a valid contract for the sale of real estate, the equitable title passes to the vendee, and any subsequent damage to the premises by fire falls upon him.

2. SAME—POSSESSION BY VENDOR.

A valid contract of sale of real estate puts the equitable title in the vendee, although he may be out of possession.

3. INSURANCE—RIGHT TO PROCEEDS—VENDOR AND PURCHASER—POLICY—BREACH OF CONDITION.

Where a policy provided that it should be void if any change took place in the interest, title, or possession of the property, whether by legal process or by a voluntary act of the insured, the execution of a contract of sale of the insured premises was a breach of the condition, and avoids the policy.

Appeal from Circuit Court, Jackson County; H. L. McCune, Judge.

Action by E. W. Manning and another against North British & Mercantile Insurance Company. From a judgment for plaintiffs, defendant appeals. Reversed.

Fyke & Snider, for appellant. James T. Burney & Son, for respondents.

ELLISON, J.

This is an action on a policy of fire insurance insuring H. L. McElroy against loss on his frame dwelling, situated on a lot in Kansas City, for the period of five years. McElroy sold the property to Manning and his wife, and transferred the policy to him with the consent of the company. Afterwards, on September 19, 1904, Manning entered into a written contract with J. M. Molesworth, whereby the latter sold to Manning a farm in Cass county, valued at $4,000, to be paid for by paying $500 at the time and conveying to Molesworth the lot in Kansas City, the balance, $2,250, to be paid in cash on March 1, 1905. The contract of sale recited that deeds were to be made upon payment of the cash balance of $2,250. Deeds were afterwards made by the parties. But after the contract was executed and before the deeds were made and before possession was given, the house situated on the lot in Kansas City, on which the policy was issued, was destroyed by fire. The policy contained the following clause as to ownership or change of interest, viz.: "This entire policy shall be void if the interest of the insured be not truly stated herein, or if the interest of the insured be other than unconditional and sole ownership or if the subject of insurance be a building on ground not owned by the insured in fee simple, or if any change other than by the death of the insured takes place in the interest, title or possession of the subject of insurance whether by legal process or judgment or voluntary act of the insured." The trial court held that there was no change of interest or ownership, and rendered judgment for Manning.

We believe the judgment is not supported by the facts under settled rules of law applicable thereto. At the time of the fire, plaintiff had made a valid and binding contract, selling the property to Molesworth for $1,250. That contract vested an equitable interest in the property in Molesworth. He thereby obtained a right to the legal title, which he, in fact, did afterwards get by regular conveyance. The loss occasioned by the destruction of the house was Molesworth's loss, and not plaintiff's; and if we allow plaintiff to recover he will be obtaining compensation for that which he did not lose. He sold his house before it was burned. He has conveyed by deed as he agreed to do when he sold it, and he has gotten the entire consideration for which he sold it. What we have said as to who suffered the loss, is directly supported by Snyder v. Murdock, 51 Mo. 175, wherein it is held, that after an executory contract for the sale of real estate has been entered into by execution of a contract of sale by the seller and notes for the purchase money by the purchaser, the property is at the risk of the purchaser. And such is the general law. In Loventhal v. Insurance Co., 112 Ala. 108, 20 South. 419, 33 L. R. A. 258, 57 Am. St. Rep. 17, it is said that: "`The general principle prevailing in a court of equity is, that from the time a valid contract for the purchase of lands is entered into, the vendor, as to the land, becomes a trustee for the vendee, and as to the purchase money, the vendee becomes a trustee for the vendor. When, as in the present case, the agreement is, in its legal nature, executory, the vendor covenanting to make title on the payment of the purchase money at a future day, a court of equity, pursuing its own maxim of looking upon or treating that as done which ought to have been done, or which the parties contemplate shall be done in the final execution and consummation of the contract, for most purposes, regards the contract as specifically executed. The vendee is the...