Millville Mutual Fire Ins. v. Wilgus

Mr. Justice Sharswood delivered the opinion of the court, January 6th 1879. These cases all involve the same principle, and were argued together. The plaintiff below had purchased the premises upon which these insurances were effected, at an Orphans’ Court sale, the terms of which were one-half cash, and the other half in one year. •He made the first payment, and before the year expired the loss occurred. The condition of the policies relied on to avoid them, was, “ that if the interest of the assured in the property, be any other than the entire unconditional and sole ownership of the property for the use and benefit of the assured,” it must be so represented and expressed. The plaintiff’s title was an equitable one, but it nevertheless vested in him the entire unconditional and sole ownership, subject to the payment of the balance of the purchase-money. This balance was practically an encumbrance. It is true the legal title was in the vendors, but they could use it only to enforce the payment of the price agreed upon. In this respect it is exactly the case of a mortgage which vests the legal title in the mortgagee for the same purpose. Had the property been swallowed up by an earthquake, the entire loss would have fallen on the plaintiff. In Reynolds v. The State Mutual Ins. Co., 2 Grant’s Cases 329, there was a representation that the property was not encum [111] bored. The language of the opinion indeed favors the idea that an equitable owner cannot insure beyond the purchase-money paid. Yet, Mr. Justice Biack adds: “ If we regard the difference between a legal and an equitable title as totally immaterial (and perhaps we ought so to regard it) then the unpaid balance of the purchase-money must be treated as an encumbrance.” It is clear, that if the owner could not insure beyond the purchase-money paid —he would be often entirely without indemnity. He is personally liable for the balance of the purchase — he may have made expensive improvements, or the property may have greatly appreciated. It is very easy for the insurance company, by proper questions, to draw out the exact nature of the title of the insured. In the cases before us, nó inquiry was made as to encumbrances. According to the law of Pennsylvania, the insured had a right to consider himself as the entire unconditional and sole owner. There is nothing in the remaining assignments requiring notice. Judgment affirmed.