54 Wis. 72 | Wis. | 1882
This is an action to'recover upon an insurance policy against loss by fire. The respondent recovered in the court below, and the company appealed from the judgment. The only error assigned by the learned counsel for the appellant is, that it was shown upon the trial that after the policy was issued and before the loss, and without the knowledge of the company or its authorized agents, the real estate insured was sold upon an execution issued upon a judgment rendered
It is claimed by the learned counsel for the appellant, that the sale of the real estate made by virtue of the execution issued upon said judgment rendered the policy void from the date of such sale, under the following condition in said policy: “This policy shall be void and immediately cease to be binding on the company, if the property be sold or transferred, or any alienation or change takes place in the title or possession, whether by legal process or judicial decree, or voluntary transfer or conveyance.” Appended to the paragraph of condit ions in which the condition above quoted is contained, there is this note: “The commencement of proceedings to foreclose a mortgage, or levy of execution, shall be deemed an alienation of the property, and the company shall not be holden for loss or damage thereafter.”
The jury found that the agents of the company had knowledge of the litigation which resulted in the judgment and sale above mentioned, before the policy was issued. They also found that they had no knowledge of the fact that judgment had been obtained,or that an execution had been issued thereunder and a sale made, before the loss occurred.
The question to be determined is, whether a sale of real estate upon execution, which had not yet become perfected by deed, and on which sale the time for redemption by the judgment debtor had not yet expired when the loss occurred, was a breach of the condition above quoted. It is not contended by the learned counsel for the appellant that this case comes within the provisions of the note appended to the paragraph
Whether a sale of real estate upon execution is a violation of the condition of the policy above quoted, depends very much upon the nature and effect of such sale under the laws of this state. Under our laws the sale of real estate upon execution does not give the purchaser any right to the possession of the property sold until fifteen months after such sale takes place. During that timé the original owner has the same right of possession,, occupancy and use of the premises sold that he had before the sale, and during the twelve months next after the sale he has the absolute right to avoid the effect of the sale by paying the sum bid upon such sale, with interest at the rate of ten per cent. If the original owner die during the twelve months, the title descends to his heirs-at-law as though he were the absolute owner, and such heirs succeed to his right to redeem. So, if he convey the lands during such time, his grantee becomes vested with the title, and may redeem,. from the sale. The right of the purchaser is conditional, not only upon the right of the owner to redeem within twelve months after the sale, but also upon the further condition that other judgment creditors and mortgagees may redeem at any time within thre'e months after the expiration of the twelve months within which the owner has such right. At the end of the fifteen months the purchaser may, if no
The purchaser has neither the title, possession nor right of possession until the time of redemption expires, and can maintain no action for any injury to the premises or the possession unless such injury amounts to such waste as would entitle a remainder-man to maintain an action pending the life or other estate upon the termination of which the estate in remainder vests.
Is a sale which only authorizes the vendee to demand a conveyance of the title at a future date, which right to so demand the title is subject to be defeated at any time before that date by the owner, his heirs, assigns or judgment creditors, upon payment of the purchase money and interest, and wdiich leaves ' the right of possession and use in the original owner until such fixed date arrives, such a sale, transfer, alienation or change in the title or possession as is contemplated by the condition in the policy above quoted?
Keeping in mind the rule which governs the construction of all contracts, where the main purpose of the contract is sought to be avoided by the breach of a condition subsequent, which by its terms cuts off all inquiry into the question of its materiality or whether the party seeking to avail himself of the breach has been injured thereby, we are clearly of the opinion that such sale was not a breach of the condition. The rule is well settled that in the construction of such conditions, if the terms are of doubtful meaning, or are susceptible of two constructions, that meaning will be given to them which is most favorable to the lights of the party seeking to uphold the contract, and most strongly against the party who seeks to avoid it, unless such latter construction be clearly against the intent of the parties, as shown by the whole contract. The words “sold,” “transferred,” “alienation,” and “change of title,”
In the case of Jackson v. Silvernail, 15 Johns., 278, where a lessee covenanted not to sell, dispose of or assign his estate in the demised premises without the permission of his lessor, and the sale contained a clause of forfeiture for the non-performance of the covenants, it was held that a lease of a part of the premises for twenty years was not a breach of the covenant and did not work a forfeiture, and that nothing but an assignment of his whole estate by the lessee would work a forfeiture. A like decision was made in Jakson v. Harrison, 17 Johns., 66. In Jackson ex dem. Schuyler v. Corliss, 7 Johns., 531, and Jackson v. Kipp, 3 Wend., 230, in case of a covenant that on every sale or assignment the reversioner should have the right to demand one-fifth of the consideration money, it was held that there was no breach of such covenant when the sale was made upon execution in a bona fide adverse proceeding.
In Strong v. Ins. Co., 10 Pick., 40, it was held that .a condition in the policy, which provided “ that if the property should be sold @r conveyed in whole or in part, the policy should l>e void,” was not broken by a sale upon execution, and that the provision in the policy referred only to voluntary assignments. See also Smith v. Putnam, 3 Pick., 221; Doe v. Carter, 8 Term R., 57; Stetson v. Ins. Co., 4 Mass., 330; Franklin Ins. Co. v. Findley, 6 Whart., 483; Wood on Ins., § 326; Baley v. Ins. Co., 80 N. Y., 21; Barlow v. Ins. Co., 63 N. Y., 399; Commercial Ins. Co. v. Spankneble, 52 Ill., 53; Starkweather v. Ins. Co., 2 Abb. (U. S. C. C.), 67. These cases, and numerous others that might be cited, seem to settle the question that the condition prohibiting a sale, transfer or conveyance of the insured property is to be construed as limited to a voluntary transfer, and not to a sale or transfer made by adverse legal proceedings. In all these and similar cases
In Perry v. Lorillard Ins. Co., 61 N. Y., 214, the court
In Abbot v. Ins. Co., 30 Me., 414, it was .held that a by-law of the company which prohibited the insured from selling- or alienating the property in 'whole or in fart, was broken by a sale of. the property insured, although the insured upon such sale took back a mortgage for a part of the purchase money. Upon this sale the purchaser was let into possession, and he was in possession when the loss occurred.
In Tomlinson v. Ins. Co., 47 Me., 232, where by the terms of the policy it was to be absolutely void “if-the insured, without the assent of the company, alienated the property i/n whole or in part, ” it was held that the insured having mortgaged the insured property after the policy issued, and, after making such mortgage, having transferred his equity of redemption to another person, from whom he took back a bond of defeasance, which was not recorded as required by law in order to convert such second transfer into a mortgage, avoided the policy. It does not appear in this case whether the insured remained in possession at the time of the loss or not.
In Springfield F. & M. Ins. Co. v. Massasoit Ins. Co., 43 N. Y., 389, it was held that an absolute sale and transfer by the mortgagor of the insured premises, before the loss, avoided the policy, though the loss was made payable to a mortgagee of the insured property. In Savage v. Ins. Co., 52 N. Y., 502, the policy contained the following condition: “If the property be sold or transferred, or any change talces place iii title or possession, whether by legal process or judicial de
In all these cases it will be seen that there was an alienation or conveyance of the property itself; the title of the insured was changed and transferred to another, either by his own act or by operation of some legal process, judgment or decree; and in all but one the possession was also changed.
In Orrell v. Fire Ins. Co., 13 Gray, 431, the policy contained th'e following condition: “In ease of any sale, transfer, or change of title in the property i/nsured hy this company, such i/nsuranoe shall he void.” Upon the trial the court instructed the jury as follows upon the question of forfeiture: “That to constitute an alienation it must be such as to pass the legal title as between ihe parties to it; that it need not be such a sale as would be valid as against the creditors of the plaintiff; that a mere agreement of the parties to represent to creditors that there had been such sale, to protect the property from attachment, when, in fact, nothing had been done by way of formal transfer of the property, would not constitute such alienation as would defeat the policy.” This instruction was upheld by the supreme court.
In Conover v. Ins. Co., 3 Denio, 254, it was held that under the statute creating the corporation, which provided thatwhen the property insiored hy the corporation should he alienated hy sale, or otherwise, the policy should be void, the givii g of a mortgage upon the property insured after it was issued, and before loss, did not avoid die policy; that a mortgage was not an “ alienation, by sale or otherwise,” within the meaning of the charter.
There is an almost uniform line of decisions upon conditions similar to the one in the policy under consideration, which
In the case of Shepherd v. Ins. Co., the court, in commenting on' the construction which should be put upon the terms “when the title shall be changed by sale, mortgage,” etc., say: “The title may be changed by a mortgage and foreclosure, but it is not either a vulgar or technical expression to speak of a. change of title by the mere execution of a mortgage. In equity, and even at law, a mortgage is not regarded as a title to land. It is considered a lien, or incumbrance, which may transfer the title to the mortgagee; but the mortgagor is regarded as the owner-until entry of the mortgagee or foreclosure. We may so readily imagine a great variety of forms of expression which would make a policy void if the property should be mortgaged, that it may be fairly inferred from the use of the phrase, ‘when the title shall be changed,’ that it was not designed to include a mere mortgage.” These comments are, quite applicable to the condition under consideration. It is admitted that suffering a judgment to be obtained against the insured, which would be a lien upon the real estate insured, would not be within the terms of the condition, and it seems to us equally clear that the giving of a mortgage would not; otherwise there would be no sense in the condition contained
Arguing from analogy, it would seem to follow that a sale of real estate upon exec ition, which has the limited effect given to it by our laws in the way of conveying title, would no't amount to an alienation, conveyance, sale, or change of title, within the meaning of the condition in the policy in question. "We are not, however, without authority upon this specific question.
In Strong v. Ins. Co., 10 Pick., 40, it was held that a sale of real estate upon execution, which left in the owner the right of redemption, was not a breach of a condition in the policy which provided, “ that if the property should be sold
In Loy v. Ins. Co., 24 Minn., 315, it was held that, under a policy containing the exact language contained in the policy in this case, the giving of a mortgage by the holder of the policy on the property insured, and a sale made upon the mortgage by advertisement,‘'which left a right of redemption in the policy-holder at the time of the loss, did not avoid the policy, and was not a breach of the condition. The court in this case state the rule adopted by all the courts in construing contracts of this kind, in the following clear and very plain manner:
“The question for consideration is, whether the foroclofure sale was a ‘sale, transfer, or change of title’ within the meaning of the foregoing condition, such as avoided the policy.
“In construing a condition of this character, if, upon 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 twofold: 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.”
In the following cases it is held that executory contracts for the sale of the insured property do not avoid the policy under similar conditions: Phœnix Ins. Co. v. Lawrence, 4 Metc. (Ky.), 9; Masters v. Ins. Co., 11 Barb. (N. Y.), 624; Clinton v. Ins. Co., 45 N. Y., 454; Phillips v. Ins. Co., 10 Cush., 350; Hill v. C. V. Mut. Protection Co., 59 Pa. St., 474; Washington Fire Ins. Co. v. Kelly, 32 Md., 421; Jackson v. Ins. Co., 16 B. Mon. (Ky.), 242; Power v. Ins. Co., 19 La., 28; Hutchinson v. Wright, 25 Beav., 444. The last case was a marine insurance, and before loss the assured transfe Ted his interest to a third person by an absolute conveyance, and his vendee was entered as owner on the register; but upon the trial it was proved that the transfer wa.s in fact a mortgage. The defendant insisted that the policy was avoided under two provisions of the association. The first was, that if the ship was sold the risk should -cease from the date of the sale, unless
It seems to us that the words used in the condition in this policy clearly look to such a sale, transfer or alienation as passes the title and carries with it the right of possession. Such is the definition of the words “ sold,” “ transferred,” “alienated;” and, if they are made to include a sale upon execution, it is by giving them a meaning which they do not ordinarily receive. The added words, “ change in the title or possession,” do not extend the meaning. It is the title to the estate which is to be changed, not a mere right which mayor may not ripen into a change of title. If the words “ whether by legal process or judicial decree ” were omitted, the condition would read: “If the property be sold or transferred, or any alienation or change takes place in the title or possession by voluntary transfer or conveyance.” If that were the condition, it would be quite clear that the sale, transfer, alienation, or change of title would not include a mere agreement to sell, where the legal title still remained in the vendor, for the reason that such agreement would not be a transferor conveyance of such property or the title, unless the possession were transferred in fact to the purchaser.
If the plaintiff had made a written agreement with his judgment creditor to convey the title to him in satisfaction of his debt, or any definite part thereof, such conveyance to be made one, two, or ten years after the date of the contract, unless within that time he paid the amount of the judgment, or such part of it as was agreed upon, with interest, the plaintiff to have
We think the execution sale was not a breach of the condition in the policy.
By the Oourt. — The judgment of the circuit court is affirmed.