72 N.J.L. 289 | N.J. | 1905
The opinion of the court was delivered by
The fire insurance policy, the subject of this suit, was executed August 21st, 1902, between one Garretson and the defendant, and contains the following standard policy insurance conditions, authorized by statutory forms (Gen. Stat., p. 1766; Pamph. L. 1902, p. 437, § 77), viz., that “if the interest of the insured be other tiran unconditional and sole ownership, * * * or if any change, other than by the death of an insured, takes place in the interest, title or possession of the subject of insurance (except change of occupants without increase of hazard), whether by legal process or judgment, or by involuntary act of the insured or otherwise, * * * the entire policy * * * shall be void.” At the execution of the policy one Garretson was the owner in fee-simple of the insured premises, consisting of a dwelling-house and the lands upon which it stood, but at the issuance of the policy a mortgagee clause was attached by which any loss thereunder was payable to one Manson, a mortgagee, and in February, 1903, when the property was convejed by Garretson to plaintiffs, they as
On July 1st, 1903, Mrs. Speck paid to plaintiffs, upon account of the consideration mentioned in the contract, the specified $1,000, and thereafter, on the first days of each month following, before the loss, paid not only the agreed $10, but also $30 per month additional, making for the four months $160. During this period she made in the house certain permanent improvements, adding three rooms in the attic, a china closet in the kitchen and various other additions, at a cost of about $250, and obtained a policy of insurance upon her insurable interests in the premises, in her
Passing to the consideration of the latter condition, we think that the judgment below holding that it was violated by reason of the change of interest, title and possession of the assured in the premises, as shown by the recited facts, can readily be vindicated. It is not open to question that under the admitted facts a change at least in the possession and right of possession of the insured in the premises had taken place. The period of interest in the insured embraced in the condition is incontestably from the beginning to the expiration of the policy. That such conditions are reasonable and valid even though they tend to create forfeiture of the policy cannot be denied. 1 May Ins., ¶ 287a. The effect of the recited acts of the insured upon the condition in question has not as yet, it seems, received judicial consideration in this state, but the references below will assist in determining the nature and extent of the change of interest effected by the contract to convey. Undoubtedly such a contract creates the relation of trustee and cestui que trust between vendor and vendee. It produces in equity a complete transition of the vendor’s holdings from real to personal, and gives the vendee the equitable ownership. After such contract the vendor’s interest is no longer real estate, and the unpaid
The reasoning thus adopted in our Supreme Court was in entire accord with the principle previously declared in this court in Franklin Fire Insurance Co. v. Martin, 11 Vroom 568, where the proof was that the plaintiff (the insured) had contracted to purchase the insured property of another, and had paid all the purchase-money except $2,000 and had gone into possession and expended money in improvements. The late Chief Justice Depue there said that “a person in possession under an agreement for a conveyance has a substantial and an insurable interest. If the property is destroyed, it will be his loss, in contemplation of law. If he had paid the purchaseymoney the property is his property in fact, and its destruction by fire would be his loss as much as if the formal legal title was in him.” In the recent case of Ordway v. Chace, 12 Dick. Ch. Rep. 478, the question of the effect, of the clause first above set forth arose in Chancery in a
The judgment of the Supreme Court should be affirmed.