
    Ohio Farmers' Insurance Co. v. Waters et al.
    
      Insurance policy prohibits sale or transfer of insured property— Assured assigns property to assignee for benefit of creditors —Insurance invalidated — That assignor retains possession-does not prevent — Property mortgaged — Claim by assured of homestead rights out of insurance money.
    
    1. Where an insurance policy has a condition to the effect that a sale or transfer of the property shall render the policy void, and the assured makes' a deed of assignment whereby he sells, grants, conveys, and transfers the property to an assignee for the benefit of creditors, such transfer will avoid the policy.
    2. The fact that the assignor retains possession of the property at sufferance, will not have the effect to prevent the policy from becoming void.
    
      3. Where all homestead and exemption rights are reserved in such deed, and there is a mortgage on the premises as against which no exemption can be allowed, and the assured asks an allowance in lieu of a homestead out of the insurance money, such claim is not an interest in lands, but a claim for money. r
    
    (Decided October 22, 1901.)
    • Error to the Circuit Court of Brown county.
    The Ohio Farmers’ Insurance Company issued its policy of insurance to G. A. Boebm, insuring bis farmhouse in the sum of two thousand dollars from August, 1892, to August, 1897. A building and loan company held a mortgage on the premises upon which the farmhouse stood for over |2,200.00, the loss, if any, payable to said company as its mortgage interest might appear, and the policy was delivered to and held b} that company.
    On the 8th day of March, 1897, said G. A. Boehm, by his deed duly executed, acknowledged and attested, assigned the same premises, along with other property, "to one Loudon for the benefit of his creditors, and Mr. Loudon accepted the trust and proceeded to execute the same according to law. In September, 1897, Mr. Loudon died, and John Q. Waters was appointed trustee of the assigned property.
    On the 27th day of April, 1897, after said assignment, the house was destroyed by fire, said Boehmhaving resided therein up to that time. After the assignment and while the policy was in the possession of the building and loan company, Mr. Boehm made an unsuccessful attempt to have the policy endorsed to said Loudon as his assignee.
    After said John Q. Waters had been duly appointed and qualified as trustee, he filed his petition in the court of common pleas of Brown county, in due and ample form, against the insurance company for the recovery of the amount of the policy with interest, and made a copy of the policy, and a copy of the deed of assignment, parts of his petition. The policy had the following condition: “If the realty on which the insured building is situate, or any part thereof, be sold or transferred * * * then and in every such ease this policy shall be void.” The deed of assignment makes “known by these presents” that G. A. Boehm upon sufficient consideration “has and does hereby sell, grant, convey, transfer, set over and assign nnto the said D. W. C. Loudon, his successors, heirs and assigns, as trustee in trust for the benefit of all his creditors,” the realty upon which the insured building was then situate.
    G. A. Boehm was made a- party defendant, and filed his answer and cross-petition, and therein admitted the facts stated and allegations in the petition to be true, and claimed five hundred dollars in lieu of a homestead, out of the money to be collected on the policy of insurance.
    The insurance company filed general demurrers to the petition and cross-petition and to the amended petition and amended cross-petition. The court of common pleas sustained the demurrers, and there being no desire to further plead, rendered final judgment in favor of the insurance company. The circuit court on petition in error affirmed the judgment against the trustee, and reversed the judgment against Mr. Boehm, and remanded the case as to him for further proceedings, to which the insurance company excepted. After the case got back into the court of common pleas there were various pleadings, motions and demurrers filed, and judgment was finally rendered against the insurance company for the full amount of the policy with interest, and that judgment was affirmed by the circuit court, and thereupon the insurance company came here to reverse the judgment and proceedings below.
    Lee Elliott and Rufus L. Fite, for plaintiff in error, cited the following authorities:
    
      Raymond v. Railway Co., 57 Ohio St., 271; Durbin v. Fisk, 16 Ohio St., 533; Commissioners v. Andrews, 18 Ohio St., 49; Shields v. Barrow, 58 U. S. (17 How.) 130; 1 Enc. Pl. & Pr., 472; Shinners v. Brill, 38 Wis., 648; Barnes v. Gibbs, 31 N. J. L., 317; Flanders v. Cobb, 51 Am. St. Rep., 410, Tiffany v. Bowerman, 2 Hun., 643; Bernard v. Tuplitz, 106 Mass., 162; Joyce on Ins., 2288; May on Ins., Sec. 276a; Ostrander on Ins., Sec. 211; Freydenhall v. Baldwin, 103 Ill., 328; May on Ins., 264; Orr v. Insurance Co., 25 Ins. L. J., 624; Perry v. Insurance Co., 4 Ins. Law J., 673; Guenzburger v. Insurance Co., 4 Dec. 220 (3 N. P., 140) ; May on Insurance, Sec. 74.
    
      White & Campbell and John Q. Waters, for defendants in error cited the following authorities:
    1 Bate’s Pl., 42; Kincaid’s Pl., 127; Bradford v. Andrews, 20 Ohio St., 208; Sec. 5012, Revised Statutes; Anderson v. Sharp, 44 Ohio St., 260; Morrison v. Insurance Co., 59 Am. Dec., 299; Insurance Co. v. Lawrence, 81 Am. Dec., 521; Blackwell v. Insurance Co., 48 Ohio St., 533; Guenzburger v. Insurance Co., 4 Dec., 220; 3 N. P., 140; May on Insurance, Sec. 264; Williams v. Insurance Co., 39 Am. St. Rep., 906; Insurance Co. v. Sampson, 38 Ohio St., 672; Trumbull v. Insurance Co., 12 Ohio, 305; 5 Pick., 76; Commonwealth v. Judd, 2 Mass., 330.
   Burkkt, J.

If the transfer of the lands and house to Loudon for the benefit of the creditors of Boehm was in violation of the terms and conditions of the policy, the amended petition stated no cause of action in favor of the trustee, and the amended cross-petition stated no cause of action or ground for relief in favor of Mr.’ Boehm; because the policy by that transfer became void, and of no binding effect as against the company, and in that event the demurrers to the amended petition and amended cross-petition were properly sustained, and judgment was properly rendered in favor of the insurance company, and it was error for the circuit court to reverse the judgment against Boehm and remand the cause for further proceedings. And if this be so, then all the subsequent proceedings were erroneous, and should be reversed, and the first judgment in favor of the company should be affirmed. So that the one question of controlling importance is, whether the transfer by the deed of assignment for the benefit of creditors, avoided the policy. As the policy and deed of assignment are made part of the petition, and are thereby brought into the record, the question is fairly and fully raised by the demurrers. The wolds of the policy are, “If the realty * * * or any part thereof, shall be sold or transferred,” the policy shall be void. The words of the deed of assignment are, “has and does hereby sell, grant, convey, transfer, set over and assign.” If there was not a sale out and out for value, there certainly was a transfer; and it was provided in the policy, which is the contract between the parties, that a transfer should render the policy void; and a transfer being conceded, it must follow that the policy is void, and that the petition, the amended petition, the cross-petition and amended cross-petition state no cause of action. Freydendall v. Baldwin, 103 Ill., 328; Perry v. Lorillard Insurance Co., 6 Lansing’s Reports N. Y., 201; 16 Commission of Appeals, N. Y., 214; 4 Ins. Law Journal, 673; Joyce on Insurance, 2288; May on Insurance, Sec. 276a; Guenzburger v. Insurance Co., 3 N. P., 140.

Defendants in error claim that as Mr. Boehm was in possession of the house up to the time of the fire, that there was no complete transfer, and cite May on Insurance, Section 264; but his was not a possession of right, but at sufferance. The deed of assignment conveyed the full title, and that title carried with it the right of possession. Jones v. Timmons, 21 Ohio St., 596. There can be no right of possession as against a deed conveying the whole title without reservation, but there may be possession at sufferance after the making and delivery of such a deed.

The citation from May is as follows: “And of course, a voluntary assignment for the benefit of creditors is equivalently a transfer, unless possession be retained by the assignor.” The authority cited by May for the exception in favor of the assignor where he retains possession is Phoenix Insurance Co. v. Lawrence, 4 Met. (Ky.), 9. In that case there was a special. assignment of a stock of goods by deed by a debtor to one of his creditors, to pay the debts owned to such creditor, and to pay certain debts to other named creditors. There was a question as to whether the deed had been delivered and accepted, and it was conceded that the creditors had not receipted the debts. The court held that under such circumstances the debtor had still an insurable interest in the goods, but also held that if the title to the goods passed under the deed, that constructive possession passed with the title. That case is, therefore) not an authority as against a general assignment for' the benefit of creditors in this state. In the case at bar the assignee accepted the trust, and proceeded to execute it according to law,‘and the full title passed to him under the deed of assignment, and that carried with it the right of possession, and the possession of the tenant at sufferance was the possession of the holder of the legal title.

It is also- urged by defendants in error, that as Mi*. Boehm reserved all homestead and exemption rights under-the--laws of Ohio, he did not part with all his rights in the premises, and still retained an insurable interest. But the petition shows that this property was mortgaged to the building and loan company at the time the assignment was made, for over $2,200.00, only part of which was afterward paid by a sale of the lands, which mortgage would prevail over all homestead and exemption rights, and all there was left to him was the possible right to receive out of the proceeds of the sale, a sum of money not exceeding five hundred dollars. This was a claim for money, and not a title in real estate. “One may be interested in the avails of property alienated, and yet have no right to the property itself.” May on Insurance, Sec. 264. The company did not place a policy of two thousand dollars upon a contingent claim for money which could not exceed five hundred dollars. The company placed the policy upon the building as a whole, and it would take the whole to keep the policy in force. The transfer of any part would avoid the policy. To compel the company to pay the policy because of the reservation of a possible claim for five hundred dollars, would be to make a new contract, a contract which the company evidently would not have made.

The judgment of the circuit court reversing the judgment in favor of the. insurance company and against G. A. Boehm is reversed, and the judgment of the common pleas court is affirmed, and all the judgments and proceedings had in the cause after the first judgments in favor of the insurance company, are reversed and set aside and held for nought.

Judgments reversed, and, common pleas affirmed.

Minshall, O. J., Speae, Davis and Shauck, JJ., concurred.

Williams, J., dissented.  