( Va., 125 8. E. 801.) ERROR to the Circuit Court for Elizabeth City County (Spratley, J.) to review a judgment in favor of plaintiffs in an action brought to recover an amount alleged to be due on a fire insurance policy. The facts are stated in the opinion of the court. Messrs. Meredith & Meredith and Leake & Buford, for plaintiff in error: Unconditional and sole ownership and the chattel mortgage clauses have been held valid clauses in this state, and an insurance company, by issuing its policy without making specific inquiry as to title or ownership, does not thereby waive the conditions. Virginia F. & M. Ins. Co. v. J. I. Case Threshing Mach. Co. 107 Va. 588, 122 Am. St. Rep. 875, 59 S. E. 369; Westchester F. Ins. Co. v. Ocean View Pleasure Pier Co. 106 Va. 633, 56 S. E. 584; Rochester German Ins. Co. v. Monumental Sav. Asso. 107 Va. 701, 60 S. E. 93. The interest of a purchaser under a conditional sales contract of the character involved is not an unconditional and sole ownership, within the meaning of the condition in an insurance policy avoiding it unless the interest of the insured be unconditional and sole ownership. 26 C. J. 176; 14 R. C. L. 1059, 1060; 3 Joyce, Ins. § 2034; 2 Cooley, Briefs on Ins. p. 1382; 6 Cooley, Briefs on Ins. p. 473; Dumas v. Northwestern Nat. Ins. Co. 12 App. D. C. 245, 40 L.R.A. 358; McWilliams v. Cascade F. & M. Ins. Co. 7 Wash. 48, 34 Pac. 140; Phoenix Ins. Co. v. Public Parks Amusement Co. 63 Ark. 187, 37 S. W. 959; Westchester F. Ins. Co. v. Weaver, 70 Md. 536, 5 L.R.A. 478, 17 Atl. 401, 18 Atl. 1034; Geiss v. Franklin Ins. Co. 123 Ind. 172, 18 Am. St. Rep. 324, 24 N. E. 99; Lasher v. & M. Ins. Co. 86 N. Y. 423; Brown v. Commercial F. Ins. Co. 86 Ala. 189, 5 So. 500; Dow v. National Ab 26 R. I. 379, 67 L.R.A. 479, 106 Am. St. Rep. 728, 58 Atl. 999. Reserved. West Rockingham Mut. F. Ins. Co. v. Sheets, 26 Gratt. 854; Manhattan F. Ins. Co. v. Weill, 28 Gratt. 389, 26 Am. Rep. 364; Morotock Ins. Co. v. Rodefer Bros. 92 Va. 747, 53 Am. St. Rep. 846, 24 S. E. 393; Union Assur. Soc. v. Nalls, 101 Va. 613, 99 Am. St. Rep. 923, 44 S. E. 896; Lavenstein Bros. v. Hartford F. Ins. Co. 125 Va. 191, 99 S. E. 579; Lancaster v. Southern Ins. Co. 153 N. C. 285, 138 Am. St. Rep. 665, 69 S. E. 214. The conditional sales contracts were not a violation of the provisions of the policy. Chichester, J., delivered the opinion of the court: The defendant is a Virginia corporation with its head office at Richmond, Virginia. mond, Virginia. M. H. Morgan is its agent at Hampton, Virginia. He is agent for a number of other insurance companies, and is also a real estate agent, acting as such for persons desirous of renting out their real estate. The plaintiffs are husband and wife. About May 24, 1921, they rented, through M. H. Morgan as agent for a Mrs. Shelton, what is known as the Shelton farm in Elizabeth City county, their object being to conduct a boarding house. Plaintiffs took possession of the leased premises in the early part of June, 1921, and on July 12 of the same year made a verbal application for insurance upon their furniture in the leased premises. A policy of $4,000 was issued by Morgan upon the furniture in favor of the plaintiffs. the plaintiffs. The policy was in the usual standard New York form, and contained, among others, the following clauses: "This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, if the interest of the insured be other than unconditional and sole ownership, or if the subject of insurance be personal property and be or become encumbered by a chattel mortgage." Eight days after the policy issued, at about 3 o'clock A. M., a fire broke out on the premises occupied by the plaintiffs, but, through the efforts sion of and remove said articles up of several boarders, it was extin-on default being made in any of the guished before any serious damage was done. We are not concerned with the details disclosed by the evidence as to the probable origin of the fire further than to say in passing that the fire was undoubtedly of incendiary origin, and immediately after this fire all the boarders Cɔparted from the premises, leaving only the plaintiffs. On the following Monday, July 25, at about 2 o'clock A. M., another fire broke out, totally destroying the dwelling house and the insured furniture. There were many peculiar circumstances connected with this second fire, and, while we are not concerned particularly with them here, they too, and not unjustly, directed the finger of suspicion toward the plaintiffs as the authors. After the fire, when claim was made against the defendant insurance company, it was ascertained that plaintiffs purchased, on May 25, 1921, $1,946.60 worth of furniture from the Brittingham Furniture Company of Hampton, Virginia, under conditional sales contracts, and that only $110 had been paid on the purchase price thereof. This payment was made on May 25, 1921. An instalment due on June 25, of $106.50, had not been paid, and an instalment of $106.50, due on July 25, 1921, the day of the last fire, had not been paid. The conditional sales contracts were identical in terms and conditions, and, as far as it is necessary to copy them here, were as follows: "It is hereby expressly understood and agreed that the title and right of property in said articles is to remain and be vested in the said Brittingham Furniture Company, Inc.; that no title to the same shall pass until the said articles shall have been paid for in the manner herein specified; and that the said Brittingham Furniture Company, Inc., or their agents or attorneys, may at any time enter upon the premises of the undersigned, without process of law, and take posses instalments herein specified for more than three days, and if said articles, when so taken possession of, or at any time, should be worth less than the balance due on them, the undersigned agrees to pay the balance. Provided that, if default is made upon the payment of any of the said instalments, all the purchase price unpaid shall become due and payable, and provided, further, that the said Brittingham Furniture Company, Inc., shall have the right to forthwith repossess themselves of said goods should they be removed from said residence without the consent of the said Brittingham Furniture Company, Inc. "This contract contains all the conditions upon which said goods. are delivered, and no other condition, verbal or written, shall vary or alter the same." It was claimed that the defendant's agent, Morgan, was aware of the conditional sales contracts, and that he became aware of them through conversation had with him when the plaintiffs were negotiating with him for the rental of the Shelton farm over six weeks before the insurance policy was written, and for a loan to pay on furniture to start their business with. These negotiations did gotiations did result in securing Morgan's indorsement of a note for $350. The details of these negotiations, however, will be set out in full when we come to discuss the information which came into Morgan's possession as to the character of the plaintiffs' title. When demand was made upon the defendant for payment of the loss, it declined to settle, and notice of motion for $4,000 was filed by the plaintiffs against the defendant as aforesaid. The insurance company defended, among others, upon the following grounds: That the conditional sales contracts violated the sole and unconditional ownership and the chattel mortgage clauses (supra) in the policy, and thereby avoided it. (-Va., 125 S. E. 801.) The plaintiffs denied this, but alleged that, even if these conditions of the contract of insurance or either of them, would ordinarily have been violated by the conditional sales contracts, the company's agent had knowledge of the contracts, and his knowledge was imputed to the company, and this constituted a waiver of the breach of these claus es. Trial of the case was had on October 10 and 11, 1922, and resulted in a verdict of $3,000, and judgment in favor of the plaintiffs. There are five assignments of error. They consist of alleged errors as to the admissibility of evidence; as to the giving of certain instructions asked for by the plaintiffs; refusing certain instructions asked for by the defendant; in modifying others offered by the defendant; and as to the action of the court in refusing to set the verdict aside. As we view it, however, the case can be disposed of by considering the questions of law raised by the action of the court in giving instructions Nos. 1 and 4, and in refusing to give instructions Nos. 1A and 2A offered by the defendant, and the refusal of the court to set the verdict aside." The instructions 1 and 4 were as follows: "The court instructs the jury that, if they believe from the evidence that at the time the insurance was applied for through M. H. Morgan, agent of the Virginia Fire & Marine Insurance Company, the said M. H. Morgan, agent, had been told by the plaintiffs that a portion of the furniture insured was bought on the instalment plan from the Brittingham Furniture Company, then the court instructs the jury that such notice to the agent was notice to the company, and amounts to a waiver of the condition of the contract against encumbrances and liens and requiring the plaintiffs to be the sole and unconditional owners thereof; and the jury should find for the plaintiffs in a sum not exceeding three fourths of the actual cash value of each item of the property destroyed immediately preceding the fire, but in no event to exceed $4,000. And the burden of proving such value to a reasonable degree of certainty rests upon the plaintiffs. "The court further instructs the jury that the conditional sales contract in question is a short form of chattel mortgage, the reservation of the title being merely security for the payment of the debt, and was not such an estate in or title to the property within the meaning of the provision in the policy sued on that if the interest of the assured be other than unconditional and sole ownership, or be or become encumbered by chattel mortgage, the interest of the assured continues to be an unconditional and sole ownership notwithstanding such contract." The instructions 1A and 2A, offered by the defendant and refused by the court, were as follows: "The jury are instructed that, under the terms of the policy of insurance sued on in this case, if any of the insured property was held under the Brittingham contracts introduced by the plaintiffs, then the policy was revoked or annulled, unless the jury believe and are satisfied from a preponderance of the evidence that the defendant had knowledge, at the time of issuing the policy, of the nature of the plaintiffs' interest in such property. If, therefore, you believe from the evidence that a portion of the property destroyed by the fire of July 25, 1921, was held by the plaintiffs under the Brittingham contracts, and if the jury further believe from the evidence that the defendant company did not, at the time of issuing said policy, know or have in mind, as hereinafter stated in these instructions, that the plaintiffs held a part of said property under the Brittingham contracts, you should find for the defendant. "You are further instructed that, if you believe from the evidence that Mr. Morgan, the local agent of the Virginia Fire & Marine Insurance Company, at the time of issuing the policy of insurance, had knowledge, acquired in and about the prosecution of the business of that company, of the nature of the interest of the plaintiffs in the property bought from the Brittingham Furniture Company, or if you believe from the evidence that said Morgan had, prior to issuing said policy, acquired such knowledge not in and about the prosecution of that company's business, and further believe, from the evidence, that he had such knowledge in mind at the time of issuing such policy, then, but not otherwise, would such knowledge on the part of Mr. Morgan be imputed to the defendant, Virginia Fire & Marine Insurance Company." The instructions 1 and 4 present the theory of the case as contended for by the plaintiffs and as accepted by the court. The defendant's theory, as embodied in instructions 1A and 2A, was rejected by the court. The question is, Did the court proceed and try this case upon the proper theory? It is apparent from the foregoing that the trial court proceeded upon the theory (1) That, in Virginia at least, a conditional sales contract is a short form of chattel mortgage, even as between insured and insur er. (2) That, this being true, where title to personal property was retained by a vendor by conditional sales contract, and vendee insured said personal property in his own. name, there is no violation of the ordinary "unconditional and sole ownership" clause (such as the one above quoted) in the insurance policy. (3) That neither did such a conditional sales contract, under such conditions, violate the chattel mortgage clause contained in the policy and heretofore quoted. (4) That under the evidence in this case it was a question for the jury to determine whether Morgan, agent for the defendant, had such knowledge of the title of the plaintiffs in the personal property insured as would be imputed to the defendant insurance company and estop it from pleading violation of these clauses as matters of defense. In our view of the case the determination of whether the trial court was right in the view it took of these several questions of law will dispose of this case, without considering separately the assignments of error as they are presented in the petition. The legal questions raised by (1) and (2) will be considered together, as they involve one proposition; (2) being the logical conclusion if the correctness of (1) is conceded. There is some conflict of authority among the courts as to whether a conditional sales contract constitutes a violation of the sole and unconditional ownership clause found in the standard form of policy and as it appears in the policy in this A distinction is to be observed, and very properly, between those cases when title is reserved in the vendor until the purchase price is paid in full, and cases where title passes and a lien is retained for the purchase price. In 26 C. J. p. 176, the result of an examination of the authorities is thus stated: "If the title has actually passed to the purchaser, the fact that a lien has been retained for the purchase price does not make his interest other than sole and unconditional, and it has even been held that the purchaser is the sole and unconditional owner, notwithstanding the seller retains title to secure the unpaid purchase money, since such sale imposes upon him an unconditional obligation to pay for the property and subjects him to all the risks of loss incident to complete ownership. The general rule, however, is that, if title is to remain in the seller until the entire purchase price is paid, the purchaser is not the sole and unconditional owner while a portion remains unpaid, and a policy so describing him is avoided by such statement." In 14 R. C. L. pp. 1059, 1060, in stating the rule with reference to personal property, the text declares: When the subject of insurance is personal property, and the vendee is in possession under a conditional contract of sale, the title to remain in the vendor until the conditions are performed, the vendee is not the sole and unconditional owner. On page 1382 of volume 2 of Cooley's Briefs on Insurance, it is stated: "It is a well-established rule that one who buys personal property on condition that the title thereto shall remain in the seller until it is paid for is not the sole and unconditional owner of such property before full payment of the purchase price." On page 473 of volume 6 of Cooley's Briefs on Insurance, the author again refers to the same subject in the following language: "The clause as to sole and unconditional ownership contemplates a beneficial and practical ownership. Bacot v. Phoenix Ins. Co. 96 Miss. 223, 25 L.R.A. (N.S.) 1226, 50 So. 729, Ann. Cas. 1912B, 262. Such ownership is in those on whom the loss would certainly fall, not as a matter of mere contract obligation, but as a result of real bona fide rights in the property. To be unconditional and sole, within the meaning of the phrase, the interest cr ownership of the insured must be completely vested, not contingent or conditional, nor in common or jointly with others, but of such a nature that the insured would alone sustain the entire loss if the property be destroyed whether his title be legal or equitable. Phenix Ins. Co. v. Hilliard, 59 Fla. 590, 138 Am. St. Rep. 171, 52 So. 799. That is to say, insured's ownership is 'sole' when no one other than insured has any interest in the property as owner, and is 'unconditional' when the quality of the estate is not limited or affected by any condition." These citations state the rule followed by the majority of courts of last resort correctly, clearly, and briefly. The cases from which the legal principles there enunciated are gathered are too numerous to attempt citation to them all, and to quote at length from any of them would unnecessarily prolong this opinion. In Dumas v. Northwestern Nat. Ins. Co., decided by the court of appeals of the District of Columbia in 1898, 12 App. D. C. 245, 40 L.R.A. 358, an action was instituted to recover upon a policy of fire insurance. Among other stipulations, the policy there involved contained the sole and unconditional ownership clause found in the policy issued to the plaintiffs in this case. It appeared in the Dumas Case that, of the furniture insured for $3,000, about $600 in value had been purchased by plaintiff upon the instalment plan, under a contract whereby the vendor delivered possession, but retained ownership until full payment of the purchase price. The company defended the suit upon several grounds; one being that the policy was avoided by reason of the fact that the plaintiff was not the sole and unconditional owner of the furniture held under the instalment contract of purchase: "In the sense of absolute ownership, clear and unencumbered, as commonly understood, the plaintiff had title only to about one half of the property which she sought to insure. With reference, however, to the portion of the property purchased from Craig & Harding, and which was covered by a chattel mortgage, she |