Ambrose v. First National Fire Insurance

Opinion by

Beaver, J.,

The appellant clearly states the question involved, based upon facts which were agreed upon, because of the death of the stenographer, and is as follows: “ A vendor agreed to sell a house and piece of land to a vendee who paid part of the purchase money and entered into possession. Thereafter defendant insured the vendor against loss by fire to said house. The insurance policy provides that it be void ‘ if the interest of the insured be other than unconditional and sole ownership.’ The house was destroyed by fire within the time mentioned in the policy. Can the insured recover ? ”

The converse of this proposition was decided in Imperial Fire Ins. Co. v. Dunham, 117 Pa. 460, in which it was held that the assured, though but a purchaser under articles of agreement of the land on which stood the insured property and the purchase money unpaid, was such an owner in fee that the policy was not void under a similar condition. The reasons for this ruling are clearly stated by Mr. Justice Clark in his opinion at page 475, and need not be repeated here.

It is evident, as is clearly pointed out by the court below in entering judgment for the defendant, non obstante veredicto, that the vendee and vendor cannot both at the same time be the sole and unconditional owners of the property. If loss occurs before the legal title passes from the vendor to the vendee, it falls, of course, entirely upon the vendee who is liable for the entire purchase money, notwithstanding the loss by fire of buildings erected upon the property sold.

The vendor, after possession has been delivered, has no control thereof. He can secure it again only by the voluntary surrender of the vendee or by equitable ejectment or other legal process.

The vendor doubtless had an insurable interest, as has a mortgagee, but the character of that interest should have been fairly made known to the insurer, so that the moral hazard as well as the ordinary risk could have been taken into account, when the contract of insurance was made. The fundamental condition upon which the insurance in this case was effected was wanting, when the policy was issued. It was, therefore, void and neither the vendor nor his assignee, who is the use party here, was entitled to recover.

Judgment affirmed.