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Before taking up these questions we think the statement of facts should show that a copy of the land contract was attached to the declaration and made a part thereof. This contract is dated October 28, 1911. It contained, among others, the following provisions :
“Second. The said parties of the second part, in consideration of the covenants herein contained on the part of the said parties of the first part to be performed, agree to purchase of the said parties of the first part the above-described land and to pay for the same to the said parties of the first part, or their legal representatives, the sum of two thousand seven hundred and thirty dollars, lawful money of the United States in manner follows, that is to say: One hundred and fifty dollars on July 1st, 1913; two hundred dollars on July 1st, 1914; and not less than two hundred dollars on July 1st of each and every year thereafter until the full sum of said $2,730.00 is wholly paid, with interest at the rate of 6 per centum per annum, payable annually on the 1st day of July in each year on the whole sum that shall from time to time remain unpaid, both principal and interest to be paid at the First State Bank of Petoskey, in the city of Petoskey, State of Michigan; and also that they will keep all buildings now on, or that may hereafter be placed on, said premises insured for the benefit of, and in the manner and amount and by insurers approved by, first parties, and leave the policy with first parties, and in case of loss, the insurance, unless by mutual agreement used to repair or rebuild, shall be paid to the first parties, and be indorsed on this contract to the extent of the amount unpaid thereon, and the balance, if any, shall belong to the said parties of the second part; and also that they will enter said premises for taxation in the name of second parties; and so long as any part of the principal or interest of the said consideration money remains unpaid, well and faithfully, in due season in each and every year pay, or cause to be paid, all taxes and assessments, ordinary and extraordinary (including the taxes due in December, A. D. 1910), that may for any purpose whatever, be levied or assessed on said premises, and that they will not commit, or suffer any other person to commit, any waste or damage to the said lands, or the appurtenances, except for firewood for their own use and consumption upon said premises, and except while clearing off the lands for cultivation in the ordinary manner; and in no event shall any standing timber measuring five inches (or over) in diameter, at the butt, be cut down, or removed from said premises. And should second parties fail to pay any tax or assessment when due, or to keep said buildings insured as above provided, first parties may pay such taxes, and may have the buildings insured, and the amounts thus expended shall be a lien on said premises, be added to the amount of the consideration money then unpaid hereon, be due at once, and bear interest until paid at the rate of 7% per annum.”
The questions involved may be divided into three groups:
(1) Does the loss payable clause create contract relations between plaintiff and defendant?
(2) Was the policy forfeited prior to the loss because of a change of title or interest in the property insured without the consent of defendant?
(3) Was the assignment of the policy to plaintiffs before the loss without the consent of the defendant of no effect?
1. It is urged under this head that the vendor under a land contract is not the unconditional owner, and that his interest in the insurance is only as security for his debt, and that it is the vendee who is the insurer, and the vendor cannot maintain a suit against the insurance company, citing Van Buren v. Insurance Co., 28 Mich. 398; Hartford Fire Ins. Co. v. Davenport, 37 Mich. 609; Clay Fire, etc., Ins. Co. v. Manufacturing Co., 31 Mich. 346; Jaskulski v. Insurance Co., 131 Mich. 603 (92 N. W. 98); and the other authorities. A reference to these authorities will show they are not controlling. The cases cited are easily distinguishable from the instant case.
There are many cases which hold that under a loss payable clause in substance the same as in this case, a mortgagee or vendor in a land contract can maintain a suit in his own name on the policy, when, as in this case, the amount of his claim exceeds the amount of the loss. Trust Co. of Georgia v. Insurance Co., 119 Ga. 672 (46 S. E. 855); Donaldson v. Insurance Co., 95 Tenn. 280 (32 S. W. 251); Hartford Fire Ins. Co. v. Olcott, 97 Ill. 439; Bartlett v. Insurance Co., 77 Iowa, 86 (41 N. W. 579); Hastings v. Insurance Co., 73 N. Y. 141; Palmer Sav. Bank v. Insurance Co., 166 Mass. 189 (44 N. E. 211, 32 L. R. A. 615, 55 Am. St. Rep. 387); Maxcy v. Insurance Co., 54 Minn. 272 (55 N. W. 825, 40 Am. St. Rep. 299); Hammel v. Insurance Co., 50 Wis. 240 (6 N. W. 805); and many other cases found in appellee's brief.
2. Was the policy forfeited prior to the loss because of a change of title or interest in the property insured? Counsel quote from the standard fire insurance policy as to the effect of a change of interest, title or possession. We quote from the brief:
“According to the allegations in the declaration, Harkness parted with all his title to the subject of insurance on August 13, 1912, by deeding the real estate to Gourlay and wife, giving them a bill of sale of the personal property, which was the subject of insurance, and surrendering the land contract and 'from thence henceforth neither the said M. S. Harkness nor Jean A. Harkness have had any interest, right, or title to the property known and described in said policy of insurance which was destroyed by fire, as hereinafter stated, and that the said plaintiffs have been the sole and unconditional owners of said property and were at the time of the loss aforesaid.' Here was a complete surrender of title, interest and possession, of the subject of insurance, not only of the real estate, which was held by Harkness under the land contract, but of the personal property on which, by the terms of the land contract, plaintiffs had only an inchoate lien.
We submit that the declaration shows change in the title, interest, and possession of the subject of insurance, both real and personal, within the rule laid down by these authorities. At the time the loss payable clause was attached, Harkness was the sole and unconditional owner within the meaning of the Michigan decisions. He could have enforced specific performance of the contract of purchase against Gourlay and wife. Gourlay and wife had only an inchoate lien on the personal property to secure performance of the land contract. At the time of the fire, Harkness had no interest whatever. He had not only submitted to cancellation of his land contract, but, in order to make sure that he had no title in any of the property, which was the subject of insurance, plaintiffs, Gourlay and wife, had taken from him a deed to the real property and a bill of sale of the personal property."
Several authorities are cited in support of this contention, among them Collinsville Savings Society v. Insurance Co., 77 Conn. 676 (60 Atl. 647, 69 L. R. A. 924). A reference to these cases will show they are distinguishable from the case before us. The authorities are not agreed as to whether a conveyance from the mortgagor to the mortgagee would be such a change of interest as would avoid the policy. In Pioneer Savings & Loan Co. v. Insurance Co., 68 Minn. 170 (70 N. W. 979), appears the following:
"Default was thereafter made in the mortgage, the same was foreclosed, the plaintiff became the purchaser at the foreclosure sale, the time to redeem expired, no redemption was made, and plaintiff became the absolute owner of the property. Thereafter, and during the term of the policy, a loss by fire occurred. No notice of the change of ownership through such foreclosure was given to the defendant, and it claims that by reason of the failure to give such notice and have permission for such change indorsed on the policy, the policy is void. This point is disposed of by the case of Washburn v. Fire Association, 60 Minn. 68, 72 (61 N. W. 828 [51 Am. St. Rep. 500]). The fact that in that case the mortgagee itself paid the insurance premium, while in this case the mortgagor paid it, does not, as appellant seems to contend, change the meaning of the language of the contract. We held in that case that 'the proviso that the mortgagee should notify the defendant of any change of ownership which should come to its knowledge evidently has reference only to changes resulting from the acts of the mortgagor or owner of the equity of redemption.' The proviso has reference to a change or transfer of title or possession to a third person, not to one from the mortgagor to the mortgagee through a foreclosure."
See Washington Ins. Co. v. Hayes, 17 Ohio St. 432 (93 Am. Dec. 628); Ft. Scott Building & Loan Ass'n v. Insurance Co., 74 Kan. 272 (86 Pac. 142).
In Westchester Fire Ins. Co. v. Dodge, 44 Mich. 420 (6 N. W. 865), it was said:
“The errors assigned will be considered in order:
"First, that the policy became void before the loss occurred under the condition in the policy providing that if the property insured be sold or transferred or any change take place in title or possession, whether by legal process or judicial decree or voluntary transfer or conveyance, the policy should be void. It was insisted that, under this provision, the policy was rendered void because of the death of Mr. Kendrick before the loss occurred, and for the farther reason that by the will of the deceased a complicated disposition of his real estate had been made, all of which changed the title, rendering the policy void.
“Whether the death of a person insured before a loss occurred would render void the policy, we are not called upon to determine in this case. By the terms of the policy the loss was made ‘payable to Chester Downer of Sharon, Vermont, as his mortgage interest may appear,' and under such a provision the mortgagee could not be cut off from the protection which the policy afforded him by the death of the person to whom the policy was issued.”
It was further held that the mortgagee was one of the persons assured within the meaning of the policy. See Watertown Fire Ins. Co. v. Sewing Machine Co., 41 Mich. 136 (1 N. W. 961, 32 Am. Rep. 146). In Hopkins Manfg. Co. v. Insurance Co., 48 Mich. 148, 150 (11 N. W. 846), it was said: