
    The National Union Fire Ins. Co. v. Mulholland et al.
    (Decided October 24, 1927.)
    
      Messrs. Ford, Taylor & Hasselman, for plaintiff in error.
    
      Mr. P. J. Berry, for defendant in error.
   Sullivan, P. J.

This cause is here on error, and a reversal of the judgment of the municipal court is sought on the ground that the judgment is contrary to law.

In August, 1924, the National Union Fire Insurance Company, defendant below, executed and delivered to George E. and Mary T. Mulholland, defendants in error, plaintiffs below, a fire insurance policy, indemnifying them against loss by fire upon premises located at 1345 Granger avenue, in the city of Lakewood, Ohio.

The family of one Steve O’Neil moved into said premises, and lived there until August 27, 1926, when a fire occurred, and it was claimed that the damages hy reason thereof amounted to some $2,-402.12. Within 60 days, as provided by the terms of the policy, a proof of loss was' furnished, and thereupon the insurance company refused to pay the claim, on the ground that the proof of loss failed to show what is called the equitable interest of Steve O’Neil in the premises damaged by fire, and it claimed that the requirement to do so is one of the provisions of the contract of insurance.

The clauses in the contract of insurance which relate to the issue are as follows:

“This entire policy shall be void, if the insured has concealed or misrepresented in writing, or otherwise, any material fact or circumstance concerning this insurance or the subject thereof, or, if the interest of the insured in the property be not truly stated herein or in case of any fraud or false swearing by the insured, touching any matter relating to this insurance or subject thereof, whether before or after a loss.

“Or if the interest of the insured be other than unconditional and sole ownership, or if the subject of insurance be a building on ground not owned by the insured in fee simple.

“If fire occurs, the insured shall give immediate notice of any loss thereby, in writing, to this company, protect the property from further damage, forthwith separate the damaged and undamaged personal property, put it in the best possible order, make a complete inventory of the same, stating the quantity and cost of each article * * * the interest of the insured, and of all others in the property * * * the incumbrances thereon, all other insurance. ’ ’

The plaintiffs below began suit for the recovery of damages by reason of the fire and the statement of defense set up a failure and neglect to set forth the equitable interest of the said O’Neil in the premises in question.

The cause was tried to a court and jury, and resulted in a verdict in favor of the plaintiffs.

The evidence is conflicting as to whether the O’Neils, the tenants, were paying the rent or making ^partial payments upon the property. There is evidence that the O’Neils were paying rent in advance, whereas the insurance company claims that these payments were to apply upon the purchase of the property, which still remained in the name of the Mulhollands. If it were a question of the weight of the evidence, we would consider this conflict in the evidence, but, inasmuch as we think that this is not the decisive point, we have come to the conclusion that from the record it appears that, when the proof of loss was filed, as required under the provisions of the policy, the insurance company itself became aware of the exact situation as to whether the O’Neils had an equitable interest or whether the payments were for rent.

The authorities are unanimous on the proposition that one of the purposes of serving proof of loss is to acquaint the insurer with the facts, or with the medium by which the facts may be ascertained fully by the insurer. It is conceded that the company became aware of the facts in plenty of time to protect itself in the payment of the insurance, and, inasmuch as there is no evidence of collusion or fraud, the mere fact that there was no disclosure of the situation appearing in the record would not in and of itself avoid the policy, for the reason that no harm could come to the insurance company and there is no evidence of intent to defraud, although it would appear from the evidence that the serious conflict thereof is sufficient to warrant inquiry as to the purpose of the payments. We think, however, that it is a question of pure law, and that under the record there is no prejudicial error. It is not clear that the O’Neils had any equitable interest that was based upon any document which would make the foundation for such a claim.

We quote the following from Ayres, Ex’r., v. United States, 42 Ct. Cl., 385, 413:

“An equitable title * * * is a right imperfeet at law, but which may be perfected by the aid of a court of chancery, either by compelling parties to do that which in good faith they are bound to do, or by removing obstacles interposed in bad faith to the prejudice of another.”

In that case it was held that when a party’s grantors were not the possessors of a legal right, and could neither sell nor convey, he acquired nothing which could be perfected by a court of equity; nor will a court of equity decree an equitable title where conveyances are shown to have been taken under a treaty which provided for valid conveyances upon conditions, unless such conditions appear to have been complied with.

We do not think that the situation in the record comes within the rule above laid down.

The attitude of courts under a situation such as appears by the record in this case is apparent in Acer v. Merchant’s Ins. Co., 57 Barb. (N. Y.), 68, 83, which is worth reading in connection with the questions at issue here. In that case a loss occurred under a policy which provided:

“If the assured, or any other person or parties interested, shall have existing, during sthe continuance of this policy, any other contract or agreement for insurance (whether valid or not) against loss or damage by fire, on the property hereby insured, * # * not consented to by this company, * * * then this insurance shall be void.”

A person having an interest in the property under a contract of sale, without the knowledge or consent of the insured, obtained a policy covering his interest, and,the first company claimed that thereby its policy was invalidated. In considering this claim, the court said:

“It was not the understanding or intention that any other person who might have a separate interest in the property, and not connected in interest with the plaintiff, and having no interest in his insurance, might avoid the plaintiff’s contract by obtaining an insurance of his own interest in the property, without the plaintiff’s knowledge or consent. Such a construction would render the contract exceedingly harsh, unreasonable and oppressive, and the parties will not be deemed to have so contracted, if the language used by them fairly admits of a different interpretation. * * * By this rendering, ‘the parties interested’ is considered to mean those interested with the plaintiff in his contract, instead of outside persons who might have some distinct and separate interest in the property.”

The judgment of the court below is hereby affirmed.

Judgment affirmed.

Levine and Vickery, J J., concur.  