Dailey v. Westchester Fire Insurance

Colt, J. This policy of fire insurance contained a clause which provided that it should become void “if the property” insured “should be sold.” When John Dailey, the plaintiff’s intestate, procured the insurance, the premises were subject to a mortgage to John Lyons, and the policy was on its face made payable to him in case of loss as mortgagee. After the death of Dailey, the land and building insured were conveyed by his heirs to Lyons, by a deed absolute in form and containing no mention of his mortgage and no declaration of trust in favor of the grantors. There is nothing to control the effect of this deed. It does not appear that it was given in consequence of fraud, or under any undue influence; or without a sufficient consideration ; or with the intention not to transfer what equity of redemption the grantors had; or to create a trust in their favor in the land itself. In the absence of fraud, such a conveyance is effectual to transfer the mortgagor’s right of redemption. [174] although as between mortgagor and mortgagee the transaction is suspiciously viewed in a court of equity. Falis v. Conway Ins. Co. 7 Allen, 46. Trull v. Skinner, 17 Pick. 213. The testimony of Lyons to the effect that, when he took the deed, he agreed orally to sell the estate in the following May or June, and account to the heirs for the proceeds after paying his mortgage, does not show an intention to charge the estate with a trust, or operate to prevent the title of the whole, both legal and equitable, from vesting in him. It follows that there was a sale of the property within the terms of the policy, which avoided the insurance. Exceptions overruled.