RUMSEY V. PH<ENIX INSURANCE CO.

89'T

loss was, by the terms of the policy, payable to the plaintiff, "as his interest may appear." The policy contains the following conditions: "Any false representation by the assured of the condition, situation or occupancy of the property, or any omission to make known every fact material to the risk, or an overvaluation or any misrepresentati.on whatever, either in a written application . or otherwise, or if the property be sold or transferred, or any change take place in title or possession, whether by legal process, judicial decree, VOluntary transfer, or conveyance; or if the assured is not the unconditional and sole owner of the property, or if the interest of the assured in the. prope.rty as owner, trustee, consignee, factor, mortgagee, lessee, or otherwise, is not truly stated in this policy, then and in every such case this policy shall be void. After the policy was issued, and before the loss, Zimmer failed to make payments according to his contract with plaintiff, and moved out of the dwelling. The dwelling was thereafter occupied by tenants. The question of fact was Bubmitted to the jury, whether Zimmer had surrendered or abandoned his contract to the plaintiff, with instructions that if there had been such surrender or abandonment the plaintiff could not recover. The jury found there had been no surrender or abandonment, and, by implication, that the tenants who occupied the premises were Zimmer's tenants. A verdict having been found for the plaintiff the defendant now moves for a new trial. It is in sisted for the defendant that the policy is void, because Zimmer was simply a vendee, in possession of the premises under an executory contract to purchase of the plaintiff, when the policy issued, and therefore "not the unconditional and sole owner of the property," within the conditions of the policy. It is also insisted that because Zimmer stated to defendant's agent, at the time of applying for the insurance, that he "wished his house on Porter street insured," without stating specifically the nature of his interest, there was "an omission to make known every fact material to the risk," with. in the conditions render the policy void. These ob·
It

808

FEDERAL

jeetiona to plaintiff's right to recover may be considered together, and may be disposed of by the answer that Zimmer was the equitable owner of the property, and was the unconditional owner, except as to the plaintiff, and plaintiff's interest was sufficiently indicated by notice that he had such an interest in the premiS that the loss would be payable s to him. A party in possession of insured premises under a valid' subsisting contract of purchase is the equitable owner, and has an insurable interest, although he has not paid the whole consideration money. He is not guilty of a misrepresentation if he represents the house as his when he applies for insurance, and there is no breach of warranty if the house is described as his dwelling-house in the policy. The statement and the state of facts are consistent with each other. There is no misrepresentation, because an intent to deceive cannot be inferred. There is no breach of warranty, because the representation is true in substance. Strong v. Alanfrs. Ins. Co. 10 Pick. 40; .Etna Fire Ins. Co. v. Tyler, 16 Wend. 385; Davis v. Quincy Mutual Fire Ins. Co. 10 Allen, 113; Niblo v. North AmM'iean Ins. Co. 1 SandI. 551; Laidlaw v. Liverpool, etc., Ins. 00. 13 Grant Oh. 377. It was not incumbent upon Zimmer to make a fuller closure of his interest in the premises when he applied for insurance. His failure to do ao was not an "omission to make known a. fact material to the risk," within the meaning of the policy. This clause in the policyia to be read with the other clauses of which it forms part, and, applying the maxim "noscitur a 8Ociis," the word omission is equivalent tG concealment, in the contemplation of the policy. The cases effect that in view of Zimmer's cited are authorities to interest as equitable owner of the premises, in the absence of specific inquiry, he communicated all that was material to the risk, and was not bound to specify the precise extent 01' n;ature of .his interest. , The. flJ,ct that Zimmer moved out of the dwelling-house and let it to tenantll, is not a defence .within the conm,tion that. avoids the policy, "if any change ta,kfi place in title or

CLARIDGB V. KULMER.

399

session." The ohange of possession oontemplated is something more than a ohange of oooupation. It is a change effected "by legal process, judicial decree, voluntary transfer, or conveyance;" one which refers to his possessory right and not to the occupancy of the insured. The possession of Zimmer's tenants was his posssesion, within the meaIli.ni )f the policy. Finally, it is insisted for defendant that plaintiff should. be defeated because the proofs of loss were made and verified by him and not by Zimmer; and, inasmuch as the policy requires the proofs to be made by the insured a condition precedent to a cause of action on the policy, has not been complied with. It is a. sufficient answer to this position that the defendant received and retained the proofs of loss served by the plaintiff, at the same time repudiating all liability upon the policy, upon the ground that Zimmer had no interest in the premises at the time of the fire. The plaintiff was the person to whom the whole loss was payable, by the terms of the policy, and the proper party to bring an action to recover it. By repudiating any liability under the policy to the person entitled to demand payment the defendant waived any imperfections in the prelimina.ry proofs. Angell on IusuranceJ § 244.

CLARlDGE

v.

KUL'MER

and otherc.

(Oircuil Ovurt. R. D. PennslllfJanw. :March Or 1880.)
llANKRUPTCY-PREFERENCE-REASONABLE CAUBE TO BELIEVE.-A

pref. erence may be avoided under the bankrupt law wherever the creditor has knowledge of facts calculated not merely toratae a suspicion, but to produce a reasonable belief of the debtor's insolvency. What facts are neccssary to produce lIuch belief must be determined in each particular case.
Where an assignee in bankruptcy avoids, as a preference, an execution' larger inainount than the value of the goods levied on, he is entitled to the !toods or their proceeds as against an execution levied after the pref,rential execution, but before the tiling of the petition

8A'MlC-SETTtNG ASIDE EXECUTION-EFFECT ON INTERMEDJATB LIENS·...-

4:00

FEDERAL REPORTER.

Bill in equity, filed by petitioninf,{ creditors of Dempster, an alleged bankrupt, to restrain certain other creditors from proceeding upon executions levied upon the personal property of the bankrupt, the bill alleging that these executions were fraudulent preferences. An injunction was granted, and, after Dempster had been adjudicated a. bankrupt, the property was sold under an order of court by commissioners and the proceeds paid into the registry of the court. The asignee in bankruptcy was substituted as complainant, and after the pleadings and evidence had been completed the cause was, by agreement of the parties, referred to the register in bankruptcy, Edwin T. Chase, Esq., as master. He found the following facts: The petition in bankruptcy. was filed May 14, 1878. On May 8, 1878, two executions had been levied upon the bank. rupt's personal property; one in favor of Thompson & Binns, upon a judgment confessed April 26, 1878, for $806.20, an the other in favor of Gotlieb Kulmer, upon a jungment con. fessed April 29, 1878, for $354.81. Between the date of these executions and the filing of the petition several small execu. tions, upon judgments obtained adversely, were levied. Prior to receiving from Dempster the confessions of judgment, Thompson & Binns had from time to time sold merchandise to him for cash, receiving his checks in payment. On the last few purchases the checks came back unpaid and protested. Mr. Thompson, becoming alarmed, went to Chester, where Dempster resided. Both parties went together to the office of Mr. Dickinson, attorney for Thompson &Binns, and Dempster executed the judgment note, which was made payable at once. Dempster told Thompson that he was about being sued, or expected to be sued, for some accounts. Thompson that, being afraid that Dempster would confess judgment to his father or some one else, he (Thompson) took the judgment note in order to get ahead of any such judgment, and instructed his attorney to issue execution as soon as suits were brought or judgment obtained against Dempster. Sub· L:;quently a judgment Vias entered in fav(jr of Dempster's