owner of the property, who would be required to stand loss by fire; and it was said that the conclusion reached in this case would not be altered by the fact that time was of the essence of the contract, for, until forfeiture or failure to make payment as specified therein, the vendee remained the owner of the property.

See also Cottingham v. Firemen's Fund Ins. Co. (1890) 90 Ky. 439, 9 L.R.A. 627, 14 S. W. 417, where it was held that a contract for the sale of realty violated a provision forbidding the insured property to be sold or transferred, or any change in title or interest.

V. Partnership transactions; forming partnership.

A policy on partnership goods containing a provision forbidding the property to be sold or conveyed is not violated by the sale by one partner of all his interest to the other partners. Burnett v. Eufaula Home Ins. Co. (1871) 46 Ala. 11, 7 Am. Rep. 581; Allemania F. Ins. Co. v. Peck (1890) 133 Ill. 220, 23 Am. St. Rep. 610, 24 N. E. 538 (dictum); Storment v. Hartford F. Ins. Co. (1919) 215 Ill. App. 295 (dictum); Dermani v. Home Mut. Ins. Co. (1874) 26 La. Ann. 69, 21 Am. Rep. 544; Powers v. Guardian F. & L. Ins. Co. (1883) 136 Mass. 108, 49 Am. Rep. 20 (sale to one partner with a mortgage back by vendee); Phenix Ins. Co. v. Holcombe (1899) 57 Neb. 622, 73 Am. St. Rep. 532, 78 N. W. 300; Pierce v. Nashua F. Ins. Co. (1870) 50 N. H. 297, 9 Am. Rep. 235 (“alienation"); Hoffman v. Etna F. Ins. Co. (1865) 32 N. Y. 405, 88 Am. Dec. 337; Dresser v. Firemen's United Ins. Co. (1887) 45 Hun (N. Y.) 298. See also Tillou V. Kingston Mut. Ins. Co. (1850) 7 Barb. (N. Y.) 570.

Thus, the New York court has held that a provision forbidding insured. property to be sold or conveyed does not apply to a sale by the retiring partner of his interest in the partnership goods to his other partners, inasmuch as the sales and conveyances contemplated by such provision meant only such as would transfer the proprietary interest of those with whom

the insurers contracted, to others with whom they had not consented to contract. Hoffman v. Etna F. Ins. Co. (1865) 32 N. Y. 405, 88 Am. Dec. 337, supra. The court said that, since the insurance company issued the policy to a mercantile company, it must be deemed to have had in view the fluctuating nature of a partnership business and the changes of relative interest incident to that relation; further, it is said: "The design of the provision was not to interdict all sales, but only sales of proprietary interests by parties insured, to parties not insured. If the words were taken literally, a renewal of the policy would be required at the close of each day's sales. Indeterminate forms of expression, in such a case, are to be understood in a sense subservient to the general purposes of the contract. It is true that the language of the proviso against sales was not guarded by a special exclusion of changes of interest as between the assured, or of the sales of merchandise in the usual course of their business; but this was for the obvious reason that there was nothing in the tenor of the instrument to denote that the application of the clause to such a case was within the contemplation of the underwriters."

In Burnett v. Eufaula Home Ins. Co. (1871) 46 Ala. 11, 7 Am. Rep. 581, the court said: "Inasmuch as words of this restriction cannot be used in their enlarged sense and their import is doubtful, their construction must incline against those for whose benefit the restriction was imposed. The interest of each partner in the goods was per my et per tout. The confidence reposed in them was testified only by the issue of the policy, and consequently was equal in each. The commingling of such an interest with such a confidence ought, by the rule above stated, to determine the construction in favor of the plaintiffs."

In Powers v. Guardian F. & L. Ins. Co. (1883) 136 Mass. 108, 49 Am. Rep. 20, the court said: "Partners jointly contracted with as such are to be regarded as so far only one person, and the condition as so far limited to keep

ing the ownership of the thing insured in some member of the insured body that changes between themselves, in the relative amounts or in the nature of their respective interests, do not fall within the fair meaning of the words used. . . The proviso against the sale of the insured property is directed to the preservation of an insurable interest. So far as the object of preserving an insurance interest is concerned, as the actual interests of the partners in the firm property are necessarily fluctuating, there seems to be no particular reason why the insurer should wish to keep the state of the legal title unchanged as between them; certainly, no sufficient ground for extending the language chosen by the insurer beyond its plain and natural meaning."

So, an assignment of the interest of one partner to another is not a violation of a provision in a policy of insurance on the partnership property that in case of any transfer, either by sale or otherwise, without the assent of the insurer, the policy should be void, for an occurrence of this kind is so common that the parties are presumed to have contracted knowing it might arise during the period of the insurance, and if it was desirable to put a limitation upon the right of the insured in this respect a stipulation to that effect should be inserted. Dermani v. Home Mut. Ins. Co. (1874) 26 La. Ann. 69, 21 Am. Rep. 544.

And a provision voiding an insurance policy if the property is transferred without the assent of the insurer is not breached by a transfer between partners. Sun Fire Office v. Wich (1895) 6 Colo. App. 103, 39 Pac. 587.

So, in German Mut. F. Ins. Co. v. Fox (1903) 4 Neb. (Unof.) 833, 63 L.R.A. 334, 96 N. W. 652, it was held that a conveyance by one partner to the other of his interest in the partnership real estate was not a conveyance within the meaning of a provision in a fire policy, making the policy void in case of a conveyance of the property.

But in Pennsylvania and in Wiscon

sin a different rule exists. Thus, the Pennsylvania courts have held that a transfer by one partner, upon his withdrawal from the firm, of his interest in the firm to the remaining partner, is within the provision of an insurance policy on the partnership goods, declaring it void in case the insured property is alienated by "sale or otherwise." Finley v. Lycoming County Mut. Ins. Co. (1858) 30 Pa. 313, 72 Am. Dec. 705; Buckley v. Garrett (1864) 47 Pa. 204.

In the Finley Case (Pa.) supra, it was said that the contention that such condition did not attach to a transfer between partners, since that amounted merely to a release of one partner's interest to another, was neither a sound legal nor a practical view of the question, for, if what took place between the partners passed the interest in the property of one partner to the other, then "it was alienation by sale;" if it did not, it was an alienation "otherwise." Further, the court said: "It was against alienation the prohibition was leveled, and the mere use of terms will not defeat the intent. That a sale by one partner to another is within the prohibition cannot be doubted; there is no exception in its favor in the instrument, and the terms used give no room to imply any. By the transaction the one parted with all his interest, and the other acquired double what he previously possessed. This is a legitimate consequence of sale and purchase, and no substitution of terms will make it anything else."

And the Wisconsin court in Keeler v. Niagara F. Ins. Co. (1863) 16 Wis. 523, 84 Am. Dec. 714, held that a policy of fire insurance issued on partnership property, providing for a forfeiture "if said property should be sold or conveyed" without the consent of the insurer, was rendered void by a sale of one partner's interest to the other partner, unless such sale was consented to by the insurer. The court says: "The same reasons which would induce a company to protect itself against a sale to strangers may exist in a sale from one partner to another. In making contracts of in

surance, the company has regard to the habits and character of the other contracting parties. If a firm is composed in part of prudent and careful men, a company may be willing to insure the property of the firm, though the others were of an entirely different character. But if, after this was done, those who were prudent and careful could, by selling out to the others, leave the company exposed to the unguarded negligence of the latter, it might suffer the same evil as from a sale to strangers."

So, it has been held that a sale of one partner's interest to his copartner violates a provision forbidding the property to be sold, or any change of title or interest, without the assent of the insurer. Hartford F. Ins. Co. v. Ross (1864) 23 Ind. 179, 85 Am. Dec. 452. And such a transaction violates a provision against a sale, transfer, or change of title. Germania F. Ins. Co. v. Home Ins. Co. (1884) 144 N. Y. 195, 26 L.R.A. 595, 43 Am. St. Rep. 749, 39 N. E. 77.

However, in an answer to the suggestion that a proviso in an insurance policy on partnership goods, forfeiting the policy if "the said property shall be sold or conveyed," may have been desired to secure the continuance in the firm of the only member in whom the insurers reposed confidence, the court, in Hoffman v. Ætna F. Ins. Co. (1865) 32 N. Y. 405, 88 Am. Dec. 337, where there was nothing to indicate that all of the partners were not equally worthy of confidence, said: "The only evidence of their confidence in either is the fact that they contracted with all; and the theory is rather fanciful than sound that they may have intended to conclude a bargain with rogues, on the faith of a proviso that an honest man should be kept in the firm to watch them."

Within the rule that a forfeiture provision in case of a sale or conveyance of the property without the assent of the insurer is not violated by the sale of an interest in the property, where the insured retains an interest also therein, the formation of a partnership by the insured, and the placing of the insured property in the

partnership assets, does not constitute a prohibited sale or conveyance. Scanlon v. Union F. Ins. Co. (1869) 4 Biss. 511, Fed. Cas. No. 12,436; Cowan v. Iowa State Ins. Co. (1875) 40 Iowa, 551, 20 Am. Rep. 583; 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.

Thus, in Scanlon v. Union F. Ins. Co. (Fed.) supra, where the insured property was put in as a part of the partnership assets of a copartnership formed by the insured subsequent to his taking out of the policy, which contained a clause voiding the policy if the property should be sold or conveyed without consent of the insurer, Drummond, Dist. J., charging the jury, said that, in order to avoid the policy, the insured must sell his own interest, and that so long as he held any interest in the property the policy was binding, for "it was competent for the insurers to declare that if a part of it were sold, that should avoid the policy. It was also competent for them to declare that if there was any change in the condition or title of the property, that the policy would be void; but that is not this condition."

In Cowan v. Iowa State Ins. Co. (1875) 40 Iowa, 551, 20 Am. Rep. 583, supra, the court stated that, while it was true, to a certain extent, that a copartnership is considered as a person separate from the partners, who may have transactions and make contracts with it as such, it was not true that a partner, by the sale of property to the firm, actually parted with the interest which, as partner, he actually held in the firm property. The court distinguished the case from that of a transfer by a retiring partner of his interest in the partnership property.

And in Blackwell v. Miami Valley Ins. Co. (Ohio) supra, the court, while stating that, in a strict legal sense, a transaction whereby one engaged in business alone takes a partner into his business results in the formation of a new concern, accompanied by a sale and transfer of the property of the old establishment to a new one, held that such a trransaction is not

such a sale or transfer of the entire interest in the property as would avoid a policy declaring a forfeiture should the property insured be sold or transferred by the insured. The court states: "It was competent for the policy to provide expressly that a sale of a part of the property, or of an interest therein, should avoid the policy; this they did not do. The absence of a specific provision to that effect, when it could have been so easily inserted, together with the rule, before referred to, that conditions which defeat a policy should be construed strictly against the forfeiture, leads us to hold that a sale of the entire interest of the party insured was necessary to avoid the policy."

However, in Massachusetts, it has been held that the sale of an interest in a merchant's business to a purchaser whom he takes in as a partner is within the condition that insurance on the merchant's stock shall be void, "if the property be sold or transferred, or any change takes place in the title or possession." Germania

F. Ins. Co. v. Home Ins. Co. (1894) 144 N. Y. 195, 26 L.R.A. 591, 43 Am. St. Rep. 749, 39 N. E. 77. The court distinguished the case from the case of a sale by one partner of his interest to another partner, where both were insured. It was said: "It would be a harsh and indefensible rule that required the underwriter who had insured an individual on a stock of goods in a store to continue the insurance after the insured had taken in two partners, and formed a firm wherein each partner was vested with an undivided third interest in the property covered by the policy, without having been afforded the opportunity to examine into the moral and business character of the two strangers to the original contract."

And the Connecticut court has held that where the owner of an insured stock of goods forms a partnership with another, transferring the insured's property to the partnership as his contribution to title, he thereby violates a provision in the policy that it shall be void "if the property be

sold or transferred or any change take place in title or possession," for by this the insured has done precisely that which he agreed should make the contract of insurance void. Malley v. Atlantic F. & M. Ins. Co. (1883) 51 Conn. 222.

See also Drennen v. London Assur. Corp. (1884) 20 Fed. 657 (reversed on other grounds in (1885) 113 U. S. 51, 28 L. ed. 919, 5 Sup. Ct. Rep. 341), Shuggart v. Lycoming F. Ins. Co. (1880) 55 Cal. 408, and Germania F. Ins. Co. v. Home Ins. Co. (N. Y.) supra, involving policies which, in addition to forbidding a sale of the property, stipulated against a change of title or interest, and against transfers.

VI. Transfer to joint tenant or to tenant in common.

A provision forbidding property insured to "be alienated by sale or otherwise" is not violated by a cotenant's sale of his interest to the other tenant in common. Lockwood v. Middlesex Mut. Assur. Co. (1880) 47 Conn. 553; Manley v. Insurance Co. of N. A. (1869) 1 Lans. (N. Y.) 20.

"The alienation here contemplated is a sale by the insured to a party not insured. Any transfer of interest between the parties insured by the policy is not an alienation within the meaning of the charter. By such a transfer no new party, with whom the defendants did not contract, is introduced, but simply the interest of those who did contract is changed. Such a change does not affect the risk, whether partial or extending to the entire interest, so long as no new party is brought into contract relations with the insurers. If a party parts with his entire interest, the insurance as to him ceases, and the purchaser, if a stranger to the policy, is not insured; if before a party to the policy, the insurance inures to his benefit. The object of this provision doubtless was to guard against fraud, to prevent the policy from becoming a mere gaming contract by remaining as a valid instrument in the hands of one who is no longer interested in the property, and to secure to the insur

ers contracting parties of their own choosing. No one of these purposes is defeated by the alienation in this case." Lockwood v. Middlesex Mut. Assur. Co. (1880) 47 Conn. 563.

And the sale of an undivided half interest in property insured under a policy declaring a forfeiture in the event of the sale or transfer of the property insured does not avoid the policy as to that interest to which the insured retains title. Manley v. Insurance Co. of N. A. (N. Y.) supra. VII. Foreclosure sales; judicial sales.

A sale on execution is not within the meaning of a provision forfeiting a policy if the property be sold without the assent of the insurer, so long as the equity of redemption exists. Strong v. Manufacturers' Ins. Co. (1830) 10 Pick. (Mass.) 40, 20 Am. Dec. 507; Stuart v. Reliance Ins. Co. (1901) 179 Mass. 434, 60 N. E. 929; Hopkins Mfg. Co. v. Aurora F. & M. Ins. Co. (1882) 48 Mich. 149, 11 N. W. 846; Loy v. Home Ins. Co. (1877) 24 Minn. 315, 31 Am. Rep. 346; Marts v. Cumberland Mut. F. Ins. Co. (1882) 44 N. J. L. 478; Hammel v. Queen's Ins. Co. (1882) 54 Wis. 72, 41 Am. Rep. 1, 11 N. W. 349.

And so it has been held that there has been no sale or alienation of property within the meaning of the conditions in the policy voiding it for that reason, where a decree of foreclosure has been entered against the property, and the property set up for sale and bid in by the mortgagee, but no deed delivered, before the fire destroying the property insured, and the purchaser refused to accept the deed after the fire. Marts v. Cumberland Mut. F. Ins. Co. (1882) 44 N. J. L. 478. The court states: "These words, 'alienation' and 'sale,' import an actual transfer of title. This is uniformly true of 'alienation' when properly employed, and, although 'sale' may be used to signify a mere contract to sell, yet in strictness it denotes only an actual transmission of property. In this policy it is to be confined to the narrower meaning, for two reasons: First, because the rule is that courts will construe conditions

and provisions in a policy strictly against the underwriter; . ... and secondly, because, in the second of these clauses, the expression 'shall be alienated by sale or otherwise,''sale' is manifestly a mere mode of alienation, and uniformity of construction requires that in the prior clause it should be treated as having the same meaning; 'sale or alienation' there signifies sale or other mode of alienation."

And the New Hampshire court has held that foreclosure cannot be regarded as an alienation of property within the charter of an insurance company avoiding a policy should the property be alienated, since that provision referred only to the voluntary act of parting with ownership by a bargain and sale, or by some conveyance, gift, or will. Bragg v. New England Mut. F. Ins. Co. (1852) 25 N. H. 289.

An execution or foreclosure sale not being a sale within the control of the policyholders, the Massachusetts courts have questioned whether such a sale ever comes within the terms of insurance policies forbidding property to be sold without the consent of the insurer. See Strong v. Manufacturers' Ins. Co. (Mass.) supra; Stuart v. Reliance Ins. Co. (1901) 179 Mass. 434, 60 N. E. 929. And the Michigan court has doubted whether the foreclosure of an existing mortgage could ever have the effect of forfeiting a policy conditioned to be void if the insured should sell or transfer the property. Hopkins Mfg. Co. v. Aurora F. & M. Ins. Co. (1882) 48 Mich. 149, 11 N. W. 846.

However, in Connecticut, it has been held that a sale under foreclosure avoids a policy forbidding a sale without the assent of the insurer, where the time for redemption has expired. Essex Sav. Bank v. Meriden F. Ins. Co. (1889) 57 Conn. 335, 4 L.R.A. 759, 17 Atl. 930. In that case it was held that a policy of insurance, conditioned to be void if "the said property shall be sold" without the consent of the insurer, became void by a transfer of title of the insured property by foreclosure proceedings and the expira