
    The Farmers’ Insurance Company v. Archer.
    The condition of a policy of insurance upon a dwellingliouse was, that it would he void if there was any sale, transfer or change of title, without the consent of the insurer. The insured, without such consent, sold, and, hy deed of general warranty, conveyed the'land on which the property insured was situated, and, in part consideration therefor, took from the purchaser a bond, acknowledged under the deeds act, covenanting to permit the insured to use and occupy the dwelling-house as his own during his natural life. Held, that this avoided the policy.
    Error to the District Court of Noble County.
    The plaintiff in error issued to Simon Archer a policy of insurance for five years, from July 19th, 1871, for $700; $500 of which was on his dwelling-house, and $200 on furniture and clothing, of which the insured was the owner.
    The action below was to recover $500 for a total loss of the dwelling-house, by fire, on the 24th of August, 1874.
    Several defenses were pleaded, but one only will be stated, as it presents the legal point considered by the court.
    It was a condition of the policy that it should be void “if the property be sold or transferred, or any change takes place in the title by legal process. or otherwise.” The defense pleaded was, that on the 22d of December, 1873, the insured sold and conveyed by deed, with covenants of general warranty, the farm on which the insured property was situated, to one Michael Archer, who continued to own the same at the time of the loss.
    It appears from a copy of this deed that the conveyance was in fee, without any reservation, and it is averred that this transfer was without the knowledge or consent of the company.
    The reply admits the sale and the execution of this conveyance, but alleges that it was in trust; but as part of said transaction, and as part consideration therefor, said Michael Archer, by his deed dated January 27, 1874, conveyed to the insured said dwelling-house, for his exclusive use and occupancy, for the term of his natural life, and therefore he was the owner of the building at the time of the fire.
    This instrument of January 27, 1874, denominated in the reply as a conveyance to plaintiff of the dwelling-house, is set out in the bill of exceptions.
    It is in form a bond, executed by Abraham Archer, Patrick Archer and Michael Archer, to Simon Archer, in the penal sum of $6,000. The obligors recite, that in consideration of deeds with covenants of general warranty, to them executed by Simon Archer, whereby he has conveyed to them all his lands and tenements in Noble county, and has set over to them all his personal property absolutely and equally to them, they obligate themselves to pay all his debts; also to pay to sundry named persons specified amounts. This obligation then stipulates that they, the said Abraham, Patrick and Michael, will “ permit him, the said Simon, the sole use and occupancy of his present mansion house and household goods as long as he shall live, as completely and fully as if it was his own;” that they give and secure to him as good a living off said lands as if they were his own; permit his daughters to remain with him; give him one-fifth of the products of said lands, which is made a perpetual charge on the whole of said lands, during his natural life ; furnish him with all necessary fuel and the use of a good riding horse during the same period.
    
      This bond was acknowledged before a justice of the peace, the same as a deed or lease.
    A demurrer to this reply was overruled, and on the trial the court refused to charge the jury that the facts above stated amounted to a change of title, but did charge, that if the deed to Michael of the land on which the dwelling-house was situate, and the above recited bond were parts of the same transaction, the insured was still the owner of the house, within the terms of the policy, and that the transaction did not amount to such a change of title as to avoid the policy.
    A verdict and judgment were rendered on the policy for the loss of the dwelling-house.
    This judgment was affirmed by the district court.
    
      Chritchfield & Graham, for plaintiff in error :
    I. It was stipulated that if the property should be sold, transferred, or any change made in the title, the policy should become void. To hold that the defendant’s breach of these conditions, consequent to his deed to Michael Archer, was obviated by the bond, is to destroy the agreement of the parties and render the language of the policy meaningless. Savage v. Howard Ins. Co., 52 N. Y. 502; Foot v. Hartford Ins. Co., 119 Mass. 259 ; Wood on Insurance, § 325, p. 551; Western Mass. Ins. Co. v. Ricker, 10 Mich. 279; Home Ins. Co. v. Hauslein, 60 Ill. 521; Grevemeyer v. Southern Ins. Co., 62 Penn. St. 340; McIntire v. Norwich Fire Ins. Co., 102 Mass. 230 ; Abbott v. Hambden Ins. Co., 30 Me. 414; Perry v. Lorillard Ins. Co., 6 Lans. 201; Young v. Engle Ins. Co., 14 Gray (Mass.) 150 ; Adams v. Rockingham Ins. Co., 29 Mo. 292; Barnes v. Union Ins. Co., 51 Me. 110; Hazard v. Franklin Ins. Co., 7 R. I. 427; Reynolds v. Mutual F. Ins. Co., 34 Md. 280; McEwan v. Frase, 1 Mich. (N. P.) 118; Dadmun Manuf'g. Co. v. Worcester Ins. Co., 11 Met. 429 ; Bilson v. Manuf’g Ins. Co., 7 Am. Law Reg. 661; Buchanan v. Westchester Ins. Co., 61 N. Y. 661; Burger v. Farmers’ Ins. Co., 71 Penn. St. 422; Hoxie v. Providence Ins. Co., 6 R. I. 567; Mt. Vernon Man’f’g Co. v. Summit Co. Ins. Co., 10 O. S. 347.
    II. The application was made a part of the policy. Byers v. 
      Farmers Ins. Co., recently decided by this court; and see cases there cited.
    
      B. F. Spriggs, for defendant in error.
   Johnson, J.

Did the courts below err in holding that the condition of the policy against alienation was not broken by the deed of the insured to Michael Archer of the land on which the dwelling-house insured was situate ?

We presume from the nature of the transaction that it was a family settlement. Simon Archer, the insured, had several tracts of land in Noble county.

By several deeds of general warranty he sold and conveyed all these lands, in distinct parcels, to Abraham, Patrick and Michael Archer, and at the same time sold and set over to them, in equal shares, all his personal property; in consideration of which, they bound themselves, under a penalty of $6,000, to pay all his debts, pay certain females bearing his name specified amounts, sell certain of the lands so conveyed to pay his debts, permit him the sole use, as his own, of the insured dwelling-house on the lands conveyed to Michael, as long as he shall live, give and secure to him a good living off all the lands so conveyed, permit his daughters to live with him, and give him one-fifth of the products of all lands so conveyed, which were made a charge thereon, during his natural life. These and other stipulations for the support and comfort of the grantor, they, the said Abraham, Patrick and Michael, jointly and severally bind themselves to perform, and this instrument is acknowledged before a justice.

We assume that this deed in fee to Michael Archer for the land, including the dwelling-house, and the covenants of the bond, by which a home and a support was provided for the grantor during his life, were equivalent to a reservation by the insured, in his conveyance to Michael, of a life estate in the dwelling house, and that the transaction as a whole vested in him at least a qualified life estate in the property insured. This being so, it is clear that the plaintiff below had at the time of the fire an insurable interest in the building and sustained a loss by its destruction. It is also clear, that as the owner of a life estate in the dwelling, the value of such insurable interest is changed by this transaction. As owner in fee, his interest in the property insured equaled its value. As owner of an estate for life in this dwelling, its value depended, treating it as an unqualified life estate, on his age and his expectation of life. This again depended on his health, and all the contingencies to which life is subject. Treating it, however, as in fact it was, a qualified life estate, personal to himself, a permit for him to use and occupy while he chose to make that his home, it was still less valuable.

It was his so long as he chose to use and occupy. The estate was limited to his use and enjoyment as ahorne, but if he chose from any cause to leave it, the right was of no value to others.

The insurable interest of the defendant in error was the value of the use to him. Whether this value was greater or less than the amount of the policy does not appear. Even if it be valued as life estates usually are it might, be much less. That would depend on the value of the fee in the dwelling, and his expectation of life. So far as we learn from the record the property as a whole was insured to its full value as in fee.

In no event could his loss exceed the value of his life interest, which, if he is very old, would be much less than the whole. In case of a man sixty-five years of age, the value of this life right, at six per cent, would, according to the usual tables, be worth 45 per cent, of the whole value of the property. American Almanac, 1856, p. 228.

In case his right be regarded as personal to himself and not alienable, its value would be still less.

From the facts stated it is apparent there was a material change in the value of the insurable interest by this sale and reconveyance.

The condition of the policy is, that if any sale, transfer or change of title takes place, it becomes void.' The object of this clause is, not to prevent a recovery where the insured has parted with his insurable interest, for in that case there could be no recovery if such a condition were omitted, because there could be no loss; __ but it is to prevent any sale, transfer or change of title, even where an insurable'interest remained, that would change the relations of the insured to the property. The object is to prevent any change in the title that may increase the risk by increasing the temptation or motive to burn the property, or to take less interest in guarding and preserving it from destruction by fire. Any change or transfer of title which carries with it a change of the interest in the property, of a nature calculated to have this effect, is a violation of the condition.

Whether a nominal change of title,without a change of insurable interest, would avoid the policy, we do not consider or determine.

We hold, therefore, that Simon Archer, by his deed in fee simple to Michael Archer, and by taking back to himself a life right to use and occupy the dwelling-house insured, not only changed his title but his insurable interest therein, and that thereby he avoided the policy. Ayers v. Hartford Ins. Co., 17 Iowa, 176; Springfield Ins. Co. v. Brown, 1 Ins. Law Journal, 57; Savage v. Howard Ins. Co., 52 N. Y. 502; Orrel v. Hampton Ins. Co., 13 Gray, 431; Springfield Ins. Co. v. Allen, 43 N. Y. 389 ; Abbott v. Hampden Ins. Co., 30 Maine, 414; Home Mutual Ins. Co. v. Hauslein, 60 Ill. 521; Hoxie v. Prov. Mut. Ins. Co., 6 R. I. 517; Bilson v. Man's Ins. Co., 7 Am. Law Reg. 661; Perry v. Lorillard Fire Ins. Co., 61 N. Y. 214; McIntire v. Norwich Fire Ins. Co., 102 Mass. 230.

Care should be taken to distinguish between cases where the condition is to prevent a sale, transfer or change of title, and those where the condition is construed to prevent a change in the insurable interest.

Tims, in Hitchcock v. N. W. Ins. Co., 26 N. Y. 68, the condition was against a transfer or termination of the interest of the assured, and it was held that a deed in fee with a mortgage back for the purchase-money did not work such a change as to defeat the policy. The distinction between this class of cases, depending as it does on the terms used to restrict alienation, is pointed out, and the cases carefully distinguished in Savage v. Howard Ins. Co., 52 N. Y. 502, where it was hold that a sale and a mortgage back for the purchase-money avoided a policy in which the condition was agtiinst “any sale, transfer or change in the title or possession.”

The conclusion reached upon the facts of this case is by no means a variance with the decision of Byers v. Insurance Co., 35 Ohio St. 606, where it was held, tinder a clause in the same' words as in this case, that this condition was not broken by the execution of a mortgage on the insured property. It was there said that the execution oí a mortgage was, in no proper interpretation of words, a sale, transfer or change of title. In this case we hold that a deed in fee simple, with a reconveyance back of a life use of the property, is a change of title, the effect of which is to materially change and diminish the insurable interest of the grantor.

Judgment reversed and cause remanded.  