Gaylord v. Lamar Fire Insurance

Holmes, Judge, delivered the opinion of the court. It appears that the property insured was sold on the 2d day of August, 1862, under a decree of foreclosure of a mortgage, and that a certificate of purchase of that date was delivered by the special commissioner to the purchaser, who assigned it to the plaintiffs under the laws of Illinois, which allowed fifteen months for redemption before the final deed was to be executed; that the plaintiffs, as owners of the property, effected this insurance on the 5th day of September, 1863; that the loss occurred on the 9th day of October following, and that on the 3d day of December, 1863, the special commissioner executed and delivered to the plaintiffs, as assignees of the certificate of purchase, his final deed conveying the property in fee, no redemption having taken place. The policy contained a clause to this effect: “that if the interest in the property to be insured be a leasehold, trustee, morfgagee, or l'eversionary interest, or other interest not absolute, it must be so represented to the company, and expressed in the policy in writing; otherwise the insurance shall be void.” No written application was made before the policy was issued. The verbal representation was simply to the effect that the insured were the owners of the property. The [17] ground of objection is, that they were not the absolute owners in fee simple title at the date of the policy or of the loss, and that there was a breach of warranty in this respect, or a misrepresentation of the interest of the insured, that, under this clause, avoided the policy. The object and intent of this clause would seem to have been, that if the interest of the insured in the property was only that of a lessee, trustee, mortgagee, or other estate less than a freehold, or carved out of the fee simple, the same should be particularly stated and described in the policy. As to the absolute or full ownership of the property, whether it were by virtue of a legal or equitable title, it would seem to have been left to the general law on the subject of the interest of the insured. If he were the owner at the time of the loss, that would be enough ; if he were not the owner, there could be no recovery on the policy. Under a somewhat similar claim, it has been held that the 11 absolute interest ” referred rather to the actual ownership than to the nature of the title, and meant a vested interest of which the owner could not be deprived without his consent, “in contradistinction to a contingent or conditional interest”—Haight v. City Fire Ins. Co., 29 Conn. 10. An equitable title that would be protected by a court of equity as such, may be an ownership as absolute as the legal title. The clause docs not concern the particular character of the owner’s title. This title was subject, it is true, to be divested by redemption under the statute, and may be said to have been so far conditional, or rather defeasible. We are inclined to think such a contingency did not come within the special intent of this clause, which rather related to lesser estates, or interests, of the class particularly enumerated; nor do we see .any reason for a different construction : for if the title had failed by reason of a redemption, there could have been no recovery, on the policy even without this clause ; not failing, the loss would fall on the plaintiffs, and they would be justly entitled to indemnity. The indefeasibilitv of the title is not the criterion of an insurable interest; an expectancy coupled with a pres [18] ent existing title is enougk—Stirling v. Vaughan, 11 East. 618; 1 Arnold on Ins. 230; Hildy. Ins. 66.) But whatever doubt there may have been on this point, we think the whole controversy is closed by the operation of the fiction of relation, whereby, for all tthe purposes of this insurance, the commissioner’s deed is to be considered as relating back to the date of the sale and certificate, and as vesting the full legal title in the plaintiffs as of a date anterior to the date of the policy; and that they are to be regarded as having been the absolute owners of the title at that date and at the time of the loss—Crowley v. Wallace, 12 Mo. 145; Jackson v. McCall, 3 Cow. 75; Boyd v. Longworth, 11 Ohio, 235. We see no reason why this principle should not be applied here. The certificate filed was equivalent to a deed taken and recorded, so far as the purchaser’s security from any intervening claims ; but the right of redemption was concerned, and the deed operated by way of execution of a statute power to pass the absolute title from the date of the sale by relation—4 Kent’s Com. (7th ed.) 456-60. It is consistent with the maxim, ut res magis valeat quam per eat. It is in furtherance of justice. It does not interfere with the rights of a stranger, nor injuriously affect the intervening rights of any third party. It .does not take away any defence which the defendants would be entitled to make by virtue of any stipulation in the policy. The interest of the assured was not of the character of any of these lesser estates, which were required to be disclosed and particularly described in the policy. It merely avoids a technical objection to the nature of the plaintiffs’ title. It is a fiction of law which may be properly applied in support of justice, and to obviate a failure of the contract on a purely technical ground. No injustice is done to the defendants. It was not a matter of any importance to them that this title was subject to be divested by a possible redemption ; for if there had been a redemption before the loss, there would have been no title, no insurable interest in the plaintiffs, and, of course, no pos [19] sible right to recover. But there was no redemption. The defeasible title became an absolute one, and by relation was fully vested before the loss, and all substantial ground of objection outlie part of the defendants entirely disappears. Judgment affirmed. The other judges concur.