in general, since they operate by way of forfeiture, they are to be construed strictly,-liberal intendments and enlarged constructions will not be indulged in favor of such forfeitures,and that a change or transfer of interest will not avoid the policy unless it is of such character as to make the insured less watchful in caring for and preserving the property; a mere nominal change in ownership is not of a nature calculated to diminish the motive of the insured to guard against loss, and in such case the policy is not avoided. 14 R. C. L. title, "Insurance," § 292.

It is suggested, however, that in many of the cases set out herein, where the courts have held that provisions forfeiting insurance policies in case the property is sold or conveyed without the assent of the insurer have not been violated by acts respecting title, interest, or possession, the decision would have been otherwise had the forfeiture provision been an inhibition against a change of title, interest, or possession of the type probably more common than the provision against sale.

In many instances policies forbidding the property to be sold or conveyed without the assent of the insurer, and containing, also, other provisions forbidding change of title, interest, possession, etc., have been held to have been forfeited within the meaning of such other provisions. See, for example: Queen of Arkansas Ins. Co. v. Pendola (1910) 94 Ark. 594, 128 S. W. 559; Smith v. Phoenix Ins. Co. (1891) 91 Cal. 323, 13 L.R.A. 475, 25 Am. St. Rep. 191, 27 Pac. 738; Hanover F. Ins. Co. v. Lewis (1891) 28 Fla. 209, 10 So. 297; Orr v. Hanover F. Ins. Co. (1895) 158 Ill. 149, 49 Am. St. Rep. 146, 41 N. E. 854; Ayres v. Home Ins. Co. (1866) 21 Iowa, 185; Brunswick Sav. Inst. v. Commercial Union Ins. Co. (1878) 68 Me. 313, 28 Am. Rep. 56; Card v. Phoenix Ins. Co. (1877) 4 Mo. App. 424; Germond v. Home Ins. Co. (1874) 2 Hun (N. Y.) 540; Terpenning v. Agricultural Ins. Co. (1878) 14 Hun (N. Y.) 299; Dornblaser v. Sugar Valley Mut. F. Ins. Co. (1902) 20 Pa. Super. Ct. 536.

II. Strict construction.

The authorities are agreed that provisions forbidding the insured property to be sold without the assent of the insurer are to be strictly construed against the insurer.

United States.-Friezen v. Allemania F. Ins. Co. (1887) 30 Fed. 352.

Illinois. Scammon v. Commercial Union Ins. Co. (1887) 20 Ill. App. 500, reversed on other grounds in (1888) 123 Ill. 601, 14 N. E. 666.

Maryland.-Washington F. Ins. Co. v. Kelly (1870) 32 Md. 421, 3 Am. Rep. 149.

Massachusetts.-Clinton v. Norfolk Mut. F. Ins. Co. (1900) 176 Mass. 486, 50 L.R.A. 833, 79 Am. St. Rep. 325, 57 N. E. 998.

New Jersey.-Marts v. Cumberland Mut. F. Ins. Co. (1882) 44 N. J. L. 478.

New York.-Hoffman v. Ætna F. Ins. Co. (1865) 32 N. Y. 405, 88 Am. Dec. 337; Griffey v. New York Cent. Ins. Co. (1885) 100 N. Y. 417, 53 Am. Rep. 202, 3 N. E. 309.

Ohio.-Blackwell v. Miami Valley Ins. Co. (1891) 48 Ohio St. 533, 14 L.R.A. 431, 29 Am. St. Rep. 574, 29 N. E. 278.

Texas.-New Orleans Ins. Co. v. Gordon (1887) 68 Tex. 144, 3 S. W. 718.

This rule is illustrated by the comments of the court in Friezen v. Allemania F. Ins. Co. (1887) 30 Fed. 352, where it was said: "These various provisions in the policy, bristling with conditions intended to hedge the right of the underwriters, and contained in the printed portion of the policy, are put there by the company, and for its benefit, before any contract of insurance is made. If there is any ambiguity in the language, so as to render it capable of two constructions, that should be adopted which will give effect to the policy and carry out the intention of the parties, because it must be considered, in the absence of fraud, to have been within the contemplation of the parties, when the insurance company has issued its policy, and accepted the premium, that in case of a loss the company is to pay, unless there has been some clear and manifest breach of the conditions on

the part of the insured, which works a forfeiture of his right."

And in Hoffman v. Etna F. Ins. Co. (1865) 32 N. Y. 405, 88 Am. Dec. 337, the court said that the rule that conditions for forfeitures are to receive a strict construction against those for whose benefit they are introduced, when their intent is doubtful, applies with peculiar force to conditions in insurance contracts providing for forfeiture in case the property be sold or conveyed, and an attempt is made to seize upon the words introduced as a safeguard against fraud, and make them available to defeat the claim of the assured, on the theory of a technical forfeiture without fault.

However, in Massachusetts a somewhat more liberal view seems to prevail; it has there been held (Oakes v. Manufacturers' F. & M. Ins. Co. (1881) 131 Mass. 164) that the plain purpose of a provision declaring an insurance policy void if the premises are "sold or conveyed, in whole or in part," was to protect the insurer against any sale

or conveyance which might diminish the motive of the insured to guard his own property from loss by the risk insured against, and not merely to affirm the common-law rule that, when the interest of the assured ceases, the policy fails. Commenting on the provision above quoted, the court says: "Its plain purpose is not merely to affirm the common-law rule that, when the interest of the assured ceases, the policy fails, but to protect the company against any sale or conveyance which may diminish the motive of the insured to guard his own property from loss by the risk insured against. It provides against a sale or change of title, in whole or in part. And any change which produces such diminution of interest, if it is effected by a conveyance of any part of the property, clearly, is sufficient to defeat the insurance. The word 'property' as used in this clause means the subject-matter of insurance, or the thing insured, as distinguished from the policyholder's insurable interest in it. The rules which govern the interpretation of all other contracts

govern in the interpretation of contracts of insurance. The fair meaning of the language used, as applied to the subject-matter, is to be ascertained. It is the right of the company to secure protection to itself by preserving the relations of the insured to the property covered during the life of the policy, and by preventing others from acquiring an insurable interest which would expose the company to the dangers of overinsurance." In that case it was held that a conveyance of the insured premises to a third party with release of dower, who at the same time, and as part of the same transaction, conveyed the premises back to the insured's wife, avoided the policy, notwithstanding that the plaintiff by virtue of the transaction retained an interest therein, viz., that of tenant by curtesy, or the fact that the plaintiff did not lose all his insurable interest was not decisive.

III. General rules.

Obviously, a policy of insurance with a forfeiture provision in the event the insured property is sold or conveyed without the assent of the insurer ceases to be binding, if the insured voluntarily parts with his entire interest in the property without having obtained such assent.

United States.-Bates v. Equitable F. & M. Ins. Co. (1870) 10 Wall. 33, 19 L. ed. 882.

California. Shuggart v. Lycoming F. Ins. Co. (1880) 55 Cal. 408; California State Bank V. HamburgBremen Ins. Co. (1886) 71 Cal. 11, 11 Pac. 798.

Connecticut.-Essex Sav. Bank v. Meriden F. Ins. Co. (1889) 57 Conn. 335, 4 L.R.A. 759, 17 Atl. 93, 18 Atl. 324.

Ins. Co. (1876) 120 Mass. 90; Dailey v. Westchester F. Ins. Co. (1881) 131 Mass. 173; Brown v. Cotton & Woolen Mfrs. Mut. Ins. Co. (1892) 156 Mass. 587, 31 N. E. 691; Clinton v. Norfolk Mut. F. Ins. Co. (1900) 176 Mass. 486, 50 L.R.A. 833, 79 Am. St. Rep. 325, 57 N. E. 998; Flint v. Westchester F. Ins. Co. (1911) 207 Mass. 337, 93 N. E. 646.

New York.-Miner v. Judson (1874) 2 Hun, 441.

Ohio.-Ohio Farmers' Ins. Co. v. Waters (1901) 65 Ohio St. 157, 61 N. E. 711.

Rhode Island.-Hazard v. Franklin Mut. F. Ins. Co. (1863) 7 R. I. 429.

The Massachusetts court, speaking of a condition in a policy that "if the said property be sold" the policy shall be void, has said: "The general rule is that such a condition refers only to an absolute transfer of the entire interest of the insured, completely devesting him of his insurable interest. Any sale or transfer short of this is not within the scope of the condition. . . . If it be the intention of the insurers that the contract should be avoided by any partial sale, or by any change short of an absolute sale of the entire interest, there is no difficulty in expressing that intent in plain and explicit language." Clinton v. Norfolk Mut. F. Ins. Co. (1900) 176 Mass. 486, 50 L.R.A. 833, 79 Am. St. Rep. 325, 57 N. E. 998.

A provision forfeiting a fire insurance policy in the event of the sale or conveyance of the property without the assent of the assured, is but an incorporation into the policy of a legal principle that the insured should have an interest in the property insured, not only at the time of the insurance, but at the time of the loss, and that a sale of all his interest in the property avoided the policy. Washington F. Ins. Co. v. Kelly (1870) 32 Md. 431, 3 Am. Rep. 149.

And the equitable lien of a vendor of personalty is not sufficient to keep alive a policy of insurance thereon in his favor, where the policy provides for its termination should the property be sold or otherwise disposed of

so that all interest or liability of the insured has ceased. California State Bank v. Hamburg-Bremen Ins. Co. (Cal.) supra.

And if the owner parts with the whole legal title, it makes no difference whether the consideration is of substantial value, or merely the technical consideration imported by the execution of the deed. Brown v. Cotton & Woolen Mfrs. Mut. Ins. Co. (1892) 156 Mass. 587, 31 N. E. 691.

And the policy is equally void though the conveyance is by a husband to his wife. Melcher v. Insurance Co. of Pa. (1903) 97 Me. 512, 55 Atl. 411.

And the fact that the alienation of property is a temporary one does not render it any less operative or effectual to avoid a policy declaring a forfeiture in the event the property shall be sold without the written assent of the insurer. Stuart v. Reliance Ins. Co. (1901) 179 Mass. 434, 60 N. E. 929.

Some courts have, however, doubted whether an involuntary transfer, such as sale on execution, would violate such a condition (see infra, VII.); on the other hand, in Adams v. Rockingham Mut. F. Ins. Co. (1849) 29 Me. 292, there is a broad statement to the effect that the mode of alienation is immaterial.

And it has been held that a condition in a policy of fire insurance, voiding it in the event of the sale of the property insured, does not apply to a sale or transfer of property consisting of a stock of goods kept for sale and covered by such a policy. Wolfe v. Security F. Ins. Co. (1868) 39 N. Y. 49. See also Insurance Co. of N. A. v. Lewis (1885) 1 Ohio C. C. 79, 1 Ohio C. D. 47.

If, however, the insured parts with only a part of his interest, the forfeiture provision is not violated.

United States.-Scanlon v. Union F. Ins. Co. (1869) 4 Biss. 511, Fed. Cas. No. 12,436; Freizen v. Allemania F. Ins. Co. (1886) 30 Fed. 352.

Iowa.-Cowan v. Iowa State Ins. Co. (1875) 40 Iowa, 551, 20 Am. Rep. 583. Kentucky. Cottingham v. Firemen's Fund Ins. Co. (1890) 90 Ky. 439, 9 L.R.A. 627, 14 S. W. 417.

Louisiana.-Power v. Ocean Ins. Co. (1841) 19 La. 28, 36 Am. Dec. 665.

Maine.-International Wood Co. v. National Assur. Co. (1904) 99 Me. 415, 105 Am. St. Rep. 288, 59 Atl. 544, 2 Ann. Cas. 356.

Maryland.-Washington F. Ins. Co. v. Kelly (1870) 32 Md. 421, 3 Am. Rep. 149.

Massachusetts.-Clinton v. Norfolk Mut. F. Ins. Co. (1900) 176 Mass. 486, 50 L.R.A. 833, 79 Am. St. Rep. 325, 57 N. E. 998; Stuart v. Reliance Ins. Co. (1901) 179 Mass. 434, 60 N. E. 929.

New York.-Griffey v. New York Cent. Ins. Co. (1885) 100 N. Y. 417, 53 Am. Rep. 202, 3 N. E. 309.

Ohio.-Blackwell v. Miami Valley Ins. Co. (1891) 48 Ohio St. 533, 14 L.R.A. 431, 29 Am. St. Rep. 574, 29 N. E. 278.

And although many of these cases set out in the following subdivisions of this annotation do not expressly refer to the position that a forfeiture does not result where an interest is retained by the insured under the particular transaction in question, that is apparently the underlying basis of the decision. Here it may be noted that the cases herein have been grouped with reference to facts upon which claims that the property insured has been sold have been based, without attempting to draw general rules covering the question of what constitutes a "sale" of the insured property other than that laid down in the subdivision.

In construing a provision declaring an insurance policy null and void "if the property shall be sold or conveyed," the court in Washington F. Ins. Co. v. Kelly (Md.) supra, said: "According to the tenor and effect of the language in this proviso, it is not any change or modification in the title to the property that will avoid the policy, or any reduction of the interest from an absolute to a qualified interest, because the reduced interest is insurable. The proviso is restrictive of the sale or conveyance of the property insured, and where the sale or conveyance is relied upon by the insurers to prevent the recovery for any loss by fire, the sale or conveyance must be made out full and complete.

To constitute a sale within the meaning and terms of the proviso, the right to the property sold and his possession. thereof must pass from the vendor to the vendee."

And in Cowan v. Iowa State Ins. Co. (1875) 40 Iowa, 551, 20 Am. Rep. 583, in construing a provision declaring an insurance policy should be void in case any of the property insured should be "alienated by sale or otherwise," the court said: "Nothing less than a transfer of the property insured whereby plaintiff would part with all his interest therein would operate to defeat the policy under the condition against alienation, pleaded by defendant. As long as plaintiff retained an insurable interest in the property, the policy attached thereto and protected plaintiff to the extent of his interest. . . The rule is based upon sound reason and the true construction of the clause in question, which neither in its language nor spirit is intended to deprive the insured of the right to dispose of a part of the property by sale or otherwise. This would operate as a restraint upon trade and the free sale and transfer of property, to which business men, who must enter into these contracts of insurance, would never submit. It is not demanded for the protection of the underwriters, and we have never heard of a construction giving such an effect to a condition against alienation."

IV. Executory contracts for sale of property.

The rule is fairly well settled that an executory contract for the sale of real property, though it vests equitable title in the vendee, or the execution of a bond for a deed or for title to realty, is not a "sale" within a forfeiture provision of an insurance policy on buildings located on the property, voiding the policy if the property be sold without the assent of the insurer. Phenix Ins. Co. v. Caldwell (1900) 187 Ill. 73, 58 N. E. 314; Kempton v. State Ins. Co. (1883) 62 Iowa, 83, 17 N. W. 194; Washington F. Ins. Co. v. Kelly (1870) 32 Md. 421, 3 Am. Rep. 149; MARK v. LIVERPOOL & L. & G. INS. Co. (reported herewith) ante, 310;

Grable v. German Ins. Co. (1891) 32 Neb. 645, 49 N. W. 713; Marts v. Cumberland Mut. F. Ins. Co. (1882) 44 N. J. L. 478; Browning v. Home Ins. Co. (1877) 71 N. Y. 508, 27 Am. Rep. 86; Columbia Trust Co. v. Norske Lloyd Ins. Co. (1911) 100 Misc. 550, 166 N. Y. Supp. 915, affirmed without opinion in (1918) 186 App. Div. 897, 172 N. Y. Supp. 884, which is affirmed in (1920) 229 N. Y. 556, 129 N. E. 913. See also Erb v. German-American Ins. Co. (1896) 98 Iowa, 606, 40 L.R.A. 845, 67 N. W. 583.

Thus, in a leading case it was held that a mere executory contract to sell and convey the property upon which the insured building stood, not devesting title of the vendor, and not vesting the same in the vendee, was not a breach of a restriction forbidding the property to be sold or conveyed without the assent of the insurer, for, to constitute a sale within the meaning of the terms of that proviso, the right to the property sold and to the possession thereof must pass from the vendor to the vendee. Washington F. Ins. Co. v. Kelly (1870) 32 Md. 421, 3 Am. Rep. 149.

And the reported case (MARK V. LIVERPOOL & L. & G. INS. Co. ante, 310) holds that although a contract for the sale of land, with a part of the purchase price paid and possession taken by the vendee, vests in him an equitable title to the fee, yet a policy of insurance on buildings on the land issued to the vendor, with a condition of forfeiture in the event that the property is sold without the assent of the insurer, is not forfeited by such contract.

In Illinois, where the rule is that under a bond for a deed the maker retains both the legal and equitable title until the purchaser performs all acts necessary to entitle him to the deed, it has been held that a bond for a deed is not a "sale" within the meaning of the forfeiture provision in an insurance policy that, should the property be sold, encumbered, or otherwise disposed of without the written assent of the insurer, such a sale or encumbrance would terminate the policy. 38 A.L.R.-21.

Phenix Ins. Co. v. Caldwell (Ill.) su

pra.

So, a contract for the sale of a ship, whereby possession was delivered to the purchaser, but where ownership was expressly retained in the insured and title was not passed until the whole purchase price was paid, does not show a "sale or transfer to other ownership," within a provision of the marine policy forfeiting the policy, "should the vessel be sold or transferred to other ownership." Columbia Trust Co. v. Norske Lloyd Ins. Co. (N. Y.) supra.

And it has been held that a contract to sell and convey insured property is not, in the legal or technical sense of the word, an "alienation" of the estate within the meaning of a provision forfeiting the policy in case the property shall be alienated by sale or otherwise. Masters v. Madison County Mut. Ins. Co. (1852) 11 Barb. (N. Y.) 624.

Likewise, a contract for the sale of realty on which insured buildings were located does not violate the condition in the policy of insurance stipulating for a forfeiture should the property "be alienated by sale or otherwise," or, if it should "be transferred by any contract or change of partnership or ownership." Hill v. Cumberland Valley Mut. Protection Co. (1868) 59 Pa. 474. See also Browning v. House Ins. Co. (1877) 71 N. Y. 508, 27 Am. Rep. 86.

But it has been held that a contract binding the vendee to pay a certain price for a piece of real property, under which the vendee takes possession, and which binds the vendor to make a conveyance upon the payments being made, constitutes a sale within a provision in a policy declaring it null and void in case the property insured "be sold, conveyed, or encumbered" without the written assent of the insurer. Davidson Hawkeye Ins. Co. (1887) 71 Iowa, 532, 60 Am. Rep. 818, 32 N. W. 514 (Reed, J., dissenting). The court distinguished Kempton v. State Ins. Co. (1883) 62 Iowa, 83, 17 N. W. 194, supra. In the Davidson Case the vendee was regarded as being the real

V.