to the special circumstances which in many cases render it inapplicable.

Similar statements of the same doctrine are to be found in some of the insurance cases hereinafter referred to, with reference to most of which it was correctly applied, as we shall

see.

But we shall also see that the doctrine has its reasonable limitations, and that this is one of the cases to which it cannot be applied without doing the wrong and injustice which it was designed to prevent.

In the case of Wells v. Calnan, 107 Mass. 514, 9 Am. Rep. 65, the facts were, that the plaintiff agreed to sell the defendant a farm, and the defendant agreed to buy. On the day previous to that fixed for the payment and conveyance, the buildings on the farm were destroyed by fire. The plaintiff tendered a conveyance in pursuance of the contract, and demanded payment of the purchase price, which being refused, he sued for damages. It was held that he could not recover, because by reason of the destruction of the buildings he was unable to comply with the contract on his part. It is true, the vendee had not taken possession, and the court found it necessary to distinguish the cases in which lessees in possession had been held liable on their covenant to pay rent or make repairs notwithstanding the destruction of tenements by fire during the term. In those cases it was said the liability of the defendant resulted from the fact that the lessors had fully complied with their contracts, while in the case under consideration the plaintiff was unable to do so.

There can be no doubt of the soundness of this distinction, and no difficulty, we think, in showing that it applies to the present case.

In the earlier Massachusetts case (Thompson v. Gould, 20 Pick. 134) it was applied, where the defendant was in possession, and had paid the purchase price for the purpose of sustaining his right to recover back the money paid.

In that case the agreement of purchase and sale was by parol, but the plaintiff paid at different dates the whole purchase price, and got receipts in writing specifying the purpose of the payments, and he had entered into possession of the house. Clearly, under the circumstances, he had put himself in a position to enforce specific performance of the contract to convey, and was the owner of the equitable title. But before any conveyance was tendered, the house was destroyed

by fire, and the plaintiff sued in assumpsit for the money paid. In a well-considered opinion, the court held that he was entitled to recover back the money on account of failure of consideration.

It was conceded that the contract of the vendor, though by parol, could, under the circumstances, have been specifically enforced, but it was denied that it could have been enforced against the vendee after destruction of the house.

It may be said that in this decision the mere legal rights of the parties were regarded, and that the court could not act upon the equitable doctrine for want of jurisdiction; but it will be seen that the equitable doctrine was discussed in the opinion, and its reasonable limitations pointed out.

What those limitations are it is not necessary that we should consider exhaustively. For the purpose of this decision, it is sufficient to say that no case has been cited, and we have discovered none, in which the vendee has been held bound to pay the purchase price, where a valuable part of the property has been destroyed before the day fixed for payment and conveyance, unless he has taken possession under the contract of sale, or has the right to such possession under the contract before the occurrence of the loss.

Now, in this case, it is to be remembered that the agreement between plaintiffs and Stewart consisted of a lease for a term of five years, reserving a rent, payable monthly in money, a stipulation giving Stewart the privilege of purchasing at twenty-five thousand dollars at any time during the term, and the contract binding him to purchase at twenty-five thousand dollars at the end of the term.

In considering the question before us, we may lay out of view the stipulation giving Stewart the privilege of purchasing, for clearly he was not thereby bound to take the property and pay for it, even if it remained whole and intact. To determine the character of his possession with reference to the extent of his liability upon his agreement to purchase, the contract is to be viewed as if it consisted merely of the lease and the agreement to purchase. Would Stewart, entering under such a contract at the beginning of the term demised, be deemed, for the purpose of enforcing a most inequitable liability, to have entered and to be holding under his contract of purchase? Clearly he would not, if his possession could be referred to either the lease or the contract as distinct from the other; for there can be no doubt that during the term of

the lease he would hold under that. His right to remain in possession would depend on his payment of rent and performance of other covenants of the lease, and would be determined by failure so to pay and perform.

And we think that, for the purpose of determining his liability under his agreement to purchase, in case of destruction of a material part of the property sold prior to the time for payment and conveyance, this distinction between the lease and agreement ought to be made. It is reasonable and equitable, and not opposed to any authority cited, unless the case in 48 Barbour, above referred to, should be deemed an authority against it. If so, we can only say that we think that case goes to an unreasonable length, and that it ought not to be followed. On the contrary, we think the best-considered cases warrant us in holding that the liability of Stewart upon his agreement to purchase ended with the destruction of the hotel; that it was never at his risk, but was always at the sole risk of the plaintiffs.

But appellant contends that even on this view there was a change of title and possession within the meaning of the policy, and he cites a number of cases to sustain the proposition that the equitable ownership of a vendee under a contract of purchase constitutes a sole, absolute, and unconditional ownship, and consequently that the vendor cannot also be the sole, absolute, and unconditional owner. A review of these cases, however, will show that they differ essentially from the case in hand.

In the case of Hough v. City Fire Ins. Co., 29 Conn. 10, 76 Am. Dec. 581, the legal title to the property insured was in a trustee, who held it as security for about sixteen hundred dollars, subject to which encumbrance the plaintiff and two others owned the equitable title in equal shares. The plaintiff bought out his co-owners, agreeing to pay each the sum of one thousand dollars for his interest, and he had paid on his purchase five hundred dollars to one and seven hundred dollars to the other. He had also taken possession of the land, and erected a dwelling thereon at a cost of two thousand seven hundred dollars, and was to receive a conveyance from the trustee upon the payment of the sum secured to him on the property. Under these circumstances, the court held that it was not a misrepresentation on the part of plaintiff in applying for insurance to state that the property was his. And it was also held that his interest in the property was, within the

meaning of the policy, an absolute interest, because he could by no contingency be deprived of it except by his own consent. No doubt this case was correctly decided.

The plaintiff, by reason of his original interest in the property, his payment to his co-owners upon the purchase of their interests, and the money he had expended in improvements on the property, independent of his agreement to purchase, had bound himself to do so, and he was the only person who could suffer loss by destruction of the property. It was his, therefore, absolutely, in every sense of the word material to the risk. And the decision was in line with hundreds of others in which the courts everywhere have refused to defeat recovery upon insurance policies by giving effect to the literal terms of clauses of forfeitures. Such clauses are always, and justly, construed with the utmost strictness against the insurer, and always with reference to their only legitimate object; i. e., the protection of the insurer against risks that are materially different from those which he has undertaken. The cases of Millville Mut. Fire Ins. Co. v. Wilgus, 88 Pa. St. 110, Chandler v. Commerce Fire Ins. Co., 88 Pa. St. 223, East Texas Fire Ins. Co. v. Dyches, 56 Tex. 565, Swift v. Vermont Mut. Ins. Co., 18 Vt. 313, and Gaylord v. Lamar Fire Ins. Co., 40 Mo. 16, 93 Am. Dec. 289, are all substantially like the Connecticut case, and the decisions rest upon the same ground. In every instance the vendee had made large or complete payments upon his purchase, or valuable improvements, or both. In other words, he had given bonds to complete it, so that the loss must necessarily fall upon him in case of destruction of buildings.

The case of Davidson v. Hawkeye Ins. Co., 71 Iowa, 532, 60 Am. Rep. 818, upon the authority of which, principally, our former decision herein was based, was another of the same sort. There the vendee had entered into possession of a small farm under a contract to purchase it for four hundred dollars, upon which fifty dollars was to be paid in cash. Prior to the sale, the vendor had, as in this case, procured insurance on a building on the farm. After the sale, the building was destroyed by fire, and the vendor sued on the policy. The defense was breach of a condition of the policy against any sale or conveyance of the property by the insured. The defense was sustained on the ground that there was a sale of the property. This ruling was clearly opposed to the decision of the supreme court of Maryland in Washington Ins. Co. v.

Kelly, 32 Md. 421, 3 Am. Rep. 149, and to other decisions. cited in the dissenting opinion.

It was rested also upon the false assumption that if the plaintiff could collect the insurance he could also collect the full purchase price of the building from his vendee, which would be holding, in effect, that the defendant remained bound by the policy after it became the interest of the asBured to destroy the property.

But upon the doctrine of equity that the vendee in possession is the equitable owner of the property, and the vendor merely his trustee of the legal title, the money collected by the plaintiff on the policy would have been held in trust for the vendee, and applied on the purchase price: Reed v. Lukens, 44 Pa. St. 202; 84 Am. Dec. 425; so that in fact the plaintiff, even if he had been held entitled to recover on the policy, could have no interest in the destruction of the property. And so in this case, even if Stewart could be held bound by his contract of purchase after the fire, the plaintiff could gain nothing by collecting the amount of the policy. This, however, would be no answer to the objection of defendant that the title was changed in a sense material to the risk; for to hold that the plaintiff could collect the insurance for the benefit of his vendee would convert the transaction into a virtual assignment of the policy, which can never be done without the consent of the insurer.

We do not, therefore, rest our decision in any degree upon the ground that the plaintiffs could not possibly have derived an advantage from the destruction of the hotel, and have only alluded to the matter for the purpose of calling attention to the false quantity in the reasoning of the Iowa supreme court in the case cited in support of our former decision.

The cases of Imperial Fire Ins. Co. v. Dunham, 117 Pa. St. 460, 2 Am. St. Rep. 686, and Elliott v. Ashland Mutual Fire Ins. Co., 117 Pa. St. 548, 2 Am. St. Rep. 703, cited on the rehearing, are essentially like the other cases cited to the same point, which we have already considered.

We conclude that there was in this case no change of title or possession material to the risk, and that the judgment of the superior court on the facts found was correct.

In reaching this conclusion, we have not overlooked the argument based upon the fact that Stewart agreed to pay one half of the premium on the insurance of the hotel. That