also been held, that if the parties choose to make such a bargain they are bound by it. (d)

An alienation of the property, to have the effect of discharging the insurers, must amount to an absolute conveyance of the title of the insured thereto. (e) 1 (x) Hence, a mortgage of real estate has no such effect, until entry for breach and foreclosure; (f)2 (y) or a

1

(d) Dey v. Poughkeepsie Ins. Co., 23 Barb. 623.

(e) Masters v. Madison Co. Ins. Co., 11 Barb. 624; Van Deusen v. Charter-Oak Ins. Co., 1 Rob. 55; Ayres v. Home Ins. Co., 21 Iowa, 185.

(f) Conover v. Mut. Ins. Co., 1 Comst. 290, 3 Denio, 254; Jackson v. Mass. Ins. Co., 23 Pick. 418; Judge v. Conn., &c. Ins. Co., 132 Mass. 521; Byers v. Farmers' Ins. Co., 35 Ohio St. 606. Nor a mortgage of personal property without a transfer of possession to the mortgagee. Rice v. Tower, 1 Gray, 426. See also Holbrook v. Am. Ins. Co., 1 Curtis C. C. 193; Nussbaum

v. Northern Ins. Co., 37 Fed. 524. Nor a levy on execution. Clark v. New Eng. Ins. Co., 6 Cush. 342; Rice v. Tower, 1 Gray, 426. Nor a sale of the equity of redemption, so long as the party has the right to redeem. Strong v. Manufacturers Ins. Co., 10 Pick. 40. But a mortgage is considered a material alteration in the ownership of the property insured. Edmands v. Mutual Ins. Co., 1 Allen, 311. And sometimes alienation by mortgage is directly prohibited. Edes v. Hamilton Ins. Co., 3 Allen, 962. See Shepherd v. Union Ins. Co., 38 N. H. 232.

1 A conveyance in fee with mortgage back is an alienation, Savage v. Howard Ins. Co., 52 N. Y. 502; Home Ins. Co. v. Hauslein, 60 Ill. 521. See also Farmers' Ins. Co. v. Archer, 36 Ohio St. 608. But the deed must be delivered. Farmers' Ins. Co. v. Graybill, 74 Penn. St. 17; Manhattan Ins. Co. v. Stein, 5 Bush. 652. See also Marts v. Cumberland, &c. Ins. Co., 44 N. J. L. 478. But a sale of the equity of redemption is not an alienation, so long as the seller can redeem, Loy v. Insurance Co., 24 Minn. 315. A conveyance by a husband and wife to a third person, and by him back to the wife to effectuate the provisions of a will, was held an alienation, in Langdon v. Minn. Ins. Co., 22 Minn. 193. See also Walton v. Agricultural Ins. Co., 116 N. Y. 317. Where a husband having right of curtesy insured buildings, and during the term of the policies the wife conveyed to a third person, the husband releasing curtesy, and the grantee then reconveyed to the husband, the whole transaction being merely for the purpose of vesting a complete title in the husband, it was held that a condition making the policy void if "the property shall be sold" was not broken. Kyte v. Commercial, &c. Ins. Co., 144 Mass. 43. - W.

2 Foreclosure, however, is complete, although proceedings are pending to correct an error. McKissick v. Millowners' Ins. Co., 50 Iowa, 116. See Commercial Union Ass. Co. v. Scammon, 102 Ill. 46; Bishop v. Clay Ins. Co., 45 Conn. 430; Georgia, &c. Ins. Co. v. Kinnier, 28 Gratt. 88; Phoenix Ins. Co. v. Union, &c. Ins. Co., 101 Ind. 392. - K.

(x) So long as the insurer has an insurable interest even by way of redemption, a provision in a standard policy that the property shall not be sold without the written consent of the insurer is not violated by an execution on foreclosure sale. Stuart v. Reliance Ins. Co., 179 Mass. 434, 60 N. E. 929.

(y) Foreclosure proceedings are treated as increasing the risk, and a stipulation avoiding the policy if such proceedings are commenced applies though the insured was ignorant of their commencement. Schroeder v. Imperial Ins. Co., 132 Cal. 18, 63 Pac. 1074.

A stipulation avoiding the policy if the

insured property becomes involved in litigation is not against public policy. Small v. Westchester F. Ins. Co., 51 Fed. 789. That clause refers only to litigation respecting the insured's title or possession, and not to a suit to eject a tenant. Hall v. Niagara F. Ins. Co., 93 Mich. 184, 53 N. W. 727.

"Increase of risk," when provided against in a policy, relates to change of structure, heating, &c., and not to sales under existing judgments. Collins v. London Ass. Corp., 165 Penn. St. 298, 30 Atl. 924.

Incumbrances are immaterial when the insurer issues the policy without inquiring

sale of the equity of redemption; (f)1 nor a contract to convey; (g) nor a conditional sale, where the condition is precedent and not yet performed; (h)2 nor a mere agreement between the owner of property insured and another person, to represent to the creditors of the owner, in order to prevent attachments, that it had been sold to such other person. (i) But it has been held that a policy on an undivided half of a building was avoided by a partition made by the court between the insured and his cotenant. (ii) And that a sale and release of the interest of one partner in the business and property, does not avoid the policy. (ij) A transfer of a part of the property does not avoid the policy as to the part not transferred. (ik) 3

The effect of bankruptcy, or of voluntary assignment to assignees in trust, may not be certain. It may be an inference

(f) Lawrence v. Holyoke Ins. Co., 11 Allen, 387.

(g) Trumbull v. Portage Co. Ins. Co., 12 Ohio, 305; Masters v. Madison Co. Ins. Co., 11 Barb. 624; Perry Co. Ins. Co. v. Stewart, 19 Penn. St. 45; Kempton v. State Ins. Co., 62 Iowa, 83. See, however, Davidson v. Hawkeye Ins. Co., 71 Iowa, 532.

(h) Tittemore v. Vt. Ins. Co., 20 Vt. 546.

(i) Orrell v. Hampden Ins. Co., 13 Gray, 431. The policy provided that the insurance should be void "in case of any sale, transfer, or change of title."

(ii) Barnes v. Union Ins. Co., 51 Me. 110. See Plath v. Minn. Farmers' Ins. Co., 23 Minn. 479.

(ij) Hoffman v. Ætna Ins. Co., 1 Rob. 501; Pierce v. Nashua Ins. Co., 50 N. H. 297; West v. Citizens' Ins. Co., 27 Ohio St. 1; Cowan v. Iowa Ins. Co., 40 Iowa, 551; Burnett v. Eufaula Ins. Co., 46 Ala. 11.

(ik) Manley v. Ins. Co., 1 Lans. 20; Quarrier v. Insurance Co., 10 W. Va. 507. Contra, Baldwin v. Hartford Fire Ins. Co., 60 N. H. 422, 424.

1 Contra, by statute, if the owner of the equity takes an unrecorded bond for a reconveyance. Foote v. Hartford Ins. Co., 119 Mass. 259. — K.

2 Nor a deed absolute in form if intended merely as security, so that a court of equity would treat it as a mortgage. Bryan v. Traders' Ins. Co., 145 Mass. 389; Barry v. Hamburg-Bremen, &c. Ins. Co., 110 N. Y. 1; cf. Tomlinson v. Monmouth, &c. Ins. Co., 47 Me. 232. W.

3 So where the insured exchanges one horse for another. Mills v. Farmers' Ins. Co., 37 Iowa, 400.-K.

or ascertaining whether they exist. Skinner v. Norman, 165 N. Y. 565, 59 N. E. 309. There is an incumbrance of the title as to insurance if the insured takes the property under a will at a stated sum, to be paid in annual instalments. Renninger v. Dwelling-House Ins. Co., 168 Penn. St. 350, 31 Atl. 1083. If the policy does not stipulate against incumbrances, or if it requires disclosure of incumbrances, mortgages upon the property made after the insurance do not affect it. Hartford Steam Boiler Insp. Co. v. Lasher Stocking Co., 66 Vt. 439, 29 Atl. 629; Collins v. Merchants' Mut. Ins. Co., 95 Iowa, 540, 64 N. W. 602; Koshland v. Hartford F. Ins. Co., 31 Oregon, 402, 49 Pac. 866.

The existence of a lien or incumbrance on the insured property is not a breach of a condition requiring sole and unconditional ownership. Steinmeyer v. Steinmeyer, 64 S. C. 413, 42 S. E. 184. A mechanic's lien is an "incumbrance within the meaning of a fire policy, and a suit thereon works a forfeiture under a condition against proceedings affecting the title. Smith v. St. Paul F. & M. Ins. Co., 106 Iowa, 225, 76 N. W. 676. A sale under such lien does not increase the risk when the period for redemption has not expired. Greenlee v. North British and Mercantile Ins. Co., 102 Iowa, 427, 71 N. W. 534.

from the weight of authority, that in either case this is an alienation. Policies sometimes provide for such circumstances. In the absence of such provisions, we should say on general principles that where property insured against fire is *452 taken into the possession of the law, for the benefit of creditors, the insurance would remain valid for their benefit, until the property was sold by the assignees. () But if the insured on his own application is declared an insolvent or a bankrupt, this may be an alienation. (k) 2 So if there is a voluntary assignment to assignees in trust. (1)

The death of the insured is no alienation of the property insured, within the meaning or the prohibition of alienation. (m) (x) Policies of insurance are certainly not negotiable. (n). They may be however, and often are, assigned with the consent of the insurers. Generally the assignor of a chose in action cannot prejudice the rights of the assignee after the debtor has assented to the assignment. (o) But where the owner of property mortgaged effects insurance in his own name, " loss payable to the mortgagee,"

(j) See Bragg v. New England Ins. Co., 5 Foster, 298; Hine v. Woolworth, 93 N. Y. 75.

(k) Adams v. Rockingham Ins. Co., 29 Maine, 292; Young v. Eagle Ins. Co., 14 Gray, 150.

(1) Dadmun Manuf. Co. v. Worcester Ins. Co., 11 Met. 429, 434. See Hazard v. Franklin Ins. Co., 7 R. I. 429.

(m) Burbank v. Rockingham Ins. Co., 4 Foster, 550; Grant v. Eliot, &c. Ins. Co., 75 Me. 196. See also Sherwood v. Agricultural Ins. Co., 73 N. Y. 447.

(n) Lynch v. Dalzell, 4 Brown, P. C. 431; Carroll v. Boston Ins. Co., 8 Mass. 515; Smith v. Saratoga Co. Ins. Co., 3 Hill, 508; Bodle v. Chenango Co. Ins. Co., 2 Comst. 53; Carpenter v. Providence Ins. Co., 16 Pet. 502, 503; Sherman v. Fair, 2 Speers, 647; Nevins v. Rockingham Ins. Co., 5 Foster, 22.

(0) Hackett v. Martin, 8 Greenl. 77; Hatch v. Dennis, 1 Fairf. 244; Matthews v. Houghton, id. 420; Frear v. Evertson, 20 Johns. 142.

1 An assignment in bankruptcy by a mortgagor of chattels, the legal title to which is in the mortgagee, will not avoid a policy, providing that a change in title by "legal process, judicial decree, or voluntary transfer or conveyance," would avoid it, loss, if any, payable to mortgagees. Appleton Iron Co. v. Brit. Am. Ass. Co., 46 Wis. 23. K.

2 A condition in a policy of fire insurance forfeiting it in case the property insured becomes incumbered in any way without the consent of the company written thereon, refers to incumbrances created by the act of the insured, and not to those created by judgment or otherwise in invitum by operation of law. Baley v. Homestead Fire Ins. Co., 80 N. Y. 21. See Starkweather v. Cleveland Ins. Co., 5 Bennett's Cas. 328. — K.

(x) Virginia F. & M. Ins. Co. v. Thomas, 90 Va. 658, 19 S. E. 454; Pfister v. Gerwig, 122 Ind. 567, 23 N. E. 1041. The clause against alienation does not apply to a deed invalid because of the grantor's insanity. Gerling v. Agricultural Ins. Co., 39 W. Va. 689, 20 S. E. 691. A provision forbidding transfer of the title applies to the interest acquired by a new co-partner of the insured. Germania F. Ins. Co. v. Home Ins. Co., 144 N. Y. 195, 39 N. E. 77. A deed absolute on

its face, but intended only as security, though really a mortgage, does not prevent the vendee being held the "sole and unconditional owner," if he is in possession and his claim is overdue. Carey v. Liverpool, &c. Ins. Co., 92 Wis. 538, 66 N. W. 693; Sun Fire Office v. Clark, 53 Ohio St. 414, 42 N. E. 248; Hawley v. London, &c. Ins. Co., 102 Cal. 651, 36 Pac. 926; see Carey v. Allemania F. Ins. Co., 171 Penn. St. 204, 33 Atl. 185.

or has such a clause afterwards indorsed on the policy with the assent of the insurers, the insurance is still upon the interest of the mortgagor, and he does not cease to be a party to the original contract with the insurers; and any act of his which would otherwise render the policy void, will have this effect, although the policy is in the hands of the mortgagee. (p) But if the insurers, at the time of their assent to the transfer of the policy, impose any further obligation on the transferee, this is evidence of a new contract with him, and then the acts of the mortgagor cannot affect his rights as mortgagee. (q)

* 453 *In practice it is usual, and always proper, that due notice of transfers should be given to the insurers, and their consent obtained, and duly indorsed or approved, as their rules may require. But notice and consent may be entirely sufficient, although they do not precisely conform to the formal requirements. 1

An agent of an insurance company, to receive premiums and applications for insurance, and transmit policies, has no authority to waive notice of an assignment of a policy. (r) 2

Policies against fire sometimes contain a provision that the policy shall be void if the building be used for an unlawful purpose. Such a policy is held to be avoided by a sale of ardent spirits therein without a license, where that sale is prohibited by law; and this when the violation of law was made without the knowledge of the policy-holder. (rr) 3 So a policy on intoxicating liquors is void if they are kept for sale and that sale is illegal. (rs)

(p) Hale v. Mechanics Ins. Co., 6 Gray, 169; Bowditch Ins. Co. v. Winslow, 8 Gray, 38; Loring v. Manuf. Ins. Co., id. 28; Edes v. Hamilton Ins. Co., 3 Allen, 362; State Ins. Co. v. Roberts, 7 Am. Law Reg. 229; Grosvenor v. Atlantic Ins. Co., 17 N. Y. 391; Bidwell v. Northwestern Ins. Co., 19 N.Y. 179. See Buffalo SteamEngine Works v. Sun Ins. Co., 17 N. Y. 401; Pollard v. Somerset Ins. Co., 42 Maine, 221; Franklin Savings Institution v. Central Ins. Co., 119 Mass. 240. State Ins. Co. v. Maackens, 9 Vroom, 564; Continental Ins. Co. v. Hulman, 92 Ill. 145. (q) Foster v. Equitable Ins. Co., 2 Gray,

3

216. In Edes v. Hamilton Ins. Co., 3 Allen, 362, Bigelow, C. J., speaking of the above case, said: "The decision in that case, although fully warranted by the peculiar facts which were there shown to exist, was nevertheless going as far as the rules of law will permit, in order to sustain a claim for loss under a policy which has been assigned by the original assured."

(r) Tate v. Citizens Ins. Co., 13 Gray, 79. But see Millville, &c. Ins. Co. v. See Mechanics', &c. Assoc., 43 N. J. L. 652. (rr) Kelly v. Worcester, &c. Ins. Co., 97 Mass. 284.

(rs) Same case.

1 It is not sufficient for the insured merely to give notice, and the insurer is not bound to express its dissent. Girard, &c. Ins. Co. v. Hebard, 95 Penn. St. 45.

2 Nor does an authority to take one kind necessarily authorize the taking of all kinds of risks. Smith v. State Ins. Co., 58 Iowa, 487. — K.

The policy in such a case does not attach, although an application is made for a license immediately after the unlawful business is begun. Johnson v. Union Ins. Co., 127 Mass. 555. -K.

SECTION V.

OF VALUATION.

This is seldom made in fire policies, and perhaps never made with the purpose and effect of valuation in marine policies. Whether a loss be total or partial, the insurers are bound to pay so much of the sum insured as will indemnify the insured, and no more. (s) (x) Where personal chattels are insured, of which the value is uncertain, as, for example, works of art, it is not uncommon to agree and express what shall be held to be their value in case of loss; and such agreement is of course binding. (t)

The value which the insurers on goods pay for, is their value at the time of loss; and it is a common practice to determine this value by a sale at auction of such part of the goods as remains uninjured. But the insurers must have notice, and due precautions must be taken, to make the auction a fair measure of their value. (u)

It is quite certain that the profits which the insured sustains by the interruption of his business caused by the fire, are not

(s) Niblo v. North American Ins. Co., 1 Sandf. 551.

(t) The parties may make a valued policy on any subject, if they see fit. Harris v. Eagle Fire Co., 5 Johns. 368. See Laurent v. Chatham Ins. Co., 1 Hall,

(x) "Total loss" does not mean an absolute extinction of a building, but the test is whether it has lost its identity and specific character so that it can no longer be called a building. Lindner v. St. Paul F. & M. Ins. Co., 93 Wis. 526, 67 N. W. 1125; Santa Clara Female Academy v. Northwestern National Ins. Co., 98 Wis. 257, 73 N. W. 767; Royal Ins. Co. v. McIntyre, 90 Texas, 170, 37 S. W. 1068, 59 Am. St. Rep. 797, 810, and note; Corbett v. Spring Garden Ins. Co., 155 N. Y. 389, 50 N. E. 282; Penn. F. Ins. Co. v. Drackett, 63 Ohio St. 41, 57 N. E. 962; Monteleone v. Royal Ins. Co., 47 La. Ann. 1563, 18 So. 472; Murphy v. American Central Ins. Co. (Tex. Civ. App.), 54 S. W. 407. When there is such a total loss a provision of the policy for arbitration becomes void, as there is nothing to arbitrate. O'Keefe v. Liverpool, &c. Ins. Co., 140 Mo. 558, 41 S. W. 922; German F. Ins. Co. v. Eddy, 36 Neb. 461, 54 N. W. 856.

41; Wallace v. Ins. Co., 4 La. 289; Millaudon v. Western Ins. Co., 9 id. 32, and cases infra, p. * 455, n. (d).

(u) Hoffman v. Western Ins. Co., 1 La. An. 216.

If the policy is in specific amounts on furniture and fixtures and on stock, and the petition alleges loss on both classes through one fire, there being but one cause of action, the plaintiff, though there might be defences as to one class not applicable to the other, is not required to elect which cause of action he would prosecute. Rissler v. American Cent. Ins. Co., 150 Mo. 336, 51 S. W. 755. When a policy insures various items in specific sums, the plaintiff, though he alleges a total loss, may abandon such claim as to some of the articles, the cause of action being divisible, and proofs are admissible to show partial loss. Pioneer Manuf. Co. v. Phoenix Ass. Co., 110 N. C. 176, 14 S. E. 731. When a power house and the machinery therein are insured by a single policy in separate amounts for the face of the policy, the power house may be recovered for in full as a total loss, though the machinery is only a partial loss. Etna Ins. Co. v. Glascow Electric and P. Co. (Ky.), 52 S. W. 975.