author: Fellows, J. Fellows, J.

text:
    OGOOSHEVITZ v. ARNOLD.
    1. Frauds, Statute of — Contracts—Sufficiency of Form.
    An agreement In writing for a contract for the sale of real estate complies with the statute of frauds where the parties, the property, the price, terms of payment, and time of performance are all definitely fixed.
    2. Specific Performance — Equity—Land Contracts.
    A court of equity may specifically decree the performance of an agreement to execute a land contract.
    3. Evidence — Parol Evidence — Written Contracts — Evidence not Admissible to Vary Terms.
    Where an agreement to execute a land contract is complete in itself and unambiguous, evidence contradicting its provisions, or tending to show that it does not embody all the agreement of the parties, may not be intr.oduced in a suit for specific performance.

    4. Vendor and Purchaser — Abstracts — Clear Title — What Constitutes.
    An agreement by a vendor to furnish an abstract showing clear title is not complied with by furnishing a clear title by prescription, or a title not established of record or one which rests on parol testimony, and can only be complied with by furnishing an abstract showing clear title as it appears of record.
    5. Executors and Administrators — Claims Against Estates— When Barred — Statutes.
    The only method by which claims against an estate could be barred, prior to the passage of Act No. 256, Pub. Acts 1915 (3 Comp. Laws 1915, § 14620), barring claims against decedents after the lapse of a certain length of time, was by an appointment of commissioners, or a hearing of claims by the probate judge and the closing of the estate.
    6. Specific Performance — When Decreed — Abstracts—Clear Title.
    Specific performance will be decreed where it is within the power of defendants in a suit for specific performance of an agreement for a contract of sale of real estate and to furnish an abstract showing clear title to perform the agreement and make a clear title.
    7. Same — Tender—When not Necessary.
    A tender of the money due by a contract purchaser before commencing suit for specific performance of the contract is unnecessary where defendants have failed to furnish clear title and tell plaintiff he can take thfe title offered or nothing and tender a previous payment to him.
    8. Same — Not Remedy of Right — Discretion of Court.
    The remedy by specific performance is not a remedy of right, but rests in the sound discretion of the court.
    9. Same.
    The mere fact that the property has increased in value is not a sufficient ground for denial of a decree for specific performance of an agreement for a contract for the sale of real estate.
    On Rehearing.
    10. Specific Performance — Permanent Improvements — Allowance.
    Where the vendor in a land contract, pending an appeal in specific performance proceedings, made expenditures of a permanent character, but it is not made to appear that there is any balance over and above the value of the use and occupation of the premises, she is not entitled to recover.
    11. Same — Incumbrances—Payment—Allowance.
    The vendor was entitled to be reimbursed the amount of a loan secured by a conveyance of the premises and taking back a land contract, which she paid back pending an appeal, the vendee not having contended that this made the title defective, but having offered to assume it in case a decree passed for specific performance.
    Appeal from Wayne; Hosmer, J.
    Submitted April 11, 1917.
    (Docket No. 141.)
    Decided July 26, 1917.
    Resubmitted October 30, 1917.
    Former opinion modified December 27, 1917.
    Bill by Isaac Ogooshevitz and another against Fred Arnold and another for the specific performance of a land contract. From a decree dismissing the bill, plaintiffs appeal.
    Reversed, and decree entered for plaintiffs.

      William Friedman, for plaintiffs.

      Harrison Geer, for defendants.

      On parol evidence as not admissible to vary, add to, or alter a written contract, see note in 17 L. R. A. 270.

   Fellows, J.

The bill in this case is filed to obtain the specific performance of the following contract:

“Detroit, Mich., Oct. 31,1911.
“Received of Isaac Ogooshevitz, the sum of fifty dollars to apply on the purchase money of the following described premises, to wit: House and lot known as 706 Antoine St. Said premises being situated in the city of Detroit, county of Wayne, and State of Michigan. Fred Arnold and Mary Arnold, of the city, hereby agree to sell, and Isaac Ogooshevitz, of the city, hereby agrees to purchase, the above-described premises for the sum of $3,800.00, thirty-eight hundred dollars, of which the sum of fifty dollars to be paid on signing of this agreement, and the sum of four hundred fifty dollars to be paid upon delivery of a land contract and the balance of the purchase price to_ be_ paid as follows: Seventy-five dollars or more, with interest payable every six months, interest at 6% per annum. Possession of premises to be given not later than Jan. 1, 1912. Purchaser is to receive'a Burton or Union Trust Company abstract, brought down to date, showing clear title. Said purchaser to pay $200.00 to apply on purchase price within 60 days after land contract is delivered; deal to be closed when possession is given by Jan. 1, 1912.
[Signed] “Fred Arnold. [L. S.]
“Mary Arnold. [L. S.] “Isaac Ogooshevitz. [L. S.]
“Witnessed by
[Signed] “Carl Singer.
“Jacob Shewitz.”

A one-half interest in this contract was assigned by plaintiff Isaac Ogooshevitz to plaintiff Ida Ogooshevitz, his wife, prior to filing this bill. The answer alleges neither fraud nor mistake. Less than two weeks after the execution of the contract the defendants furnished plaintiffs a Burton abstract brought down to date. This abstract showed the state of the title, so far as important here, to be as follows: Albert Polansky acquired title June 27, 1871. He died testate. Petition for probate of his bill was filed January 24, 1878, and it was admitted to probate February 25, 1878. The property in question was devised to his wife, Mary Polansky, and she was nominated and appointed executrix. No bond was filed by her as executrix, no commissioners on claims were appointed, and the estate was never closed; in fact, nothing was done, except the admission of the will to probate. Mary Polansky devised the property to defendant Mary (Polansky) Arnold. Mrs. Arnold deeded the premises to one Gayman, and took a land contract back from him. This was to secure a loan of $1,300. Mr. Ogooshevitz submitted the abstract to his attorney, who examined it, and found some minor defects, which were not deemed important, but advised that commissioners on claims ought to be appointed in the estate of Albert Polansky, and the estate closed. There is some conflict in the testimony, but we are satisfied that the abstract was returned to the defendants with the request that this defect be c'ured,, and that soon thereafter, and in the latter part of November, defendants tendered to Mr. Ogooshevitz the abstract, which he, under the advice of counsel, claimed did not show a good title; that defendants refused to clear up the defect pointed out by plaintiffs’ attorney, gave plaintiff to understand that they would go no further with the deal unless, he accepted the title and abstract as it stood, and tendered him back the $50 he had paid on the contract, which he refused to accept; that a couple of days after that plaintiffs’ attorney wrote them, stating that Mr. Ogooshevitz was ready to carry out the contract and requesting performance on their part. It is in conflict whether another tender and refusal of the abstract was made; but soon thereafter this bill was filed, asking that defendants be required to enter into a land' contract, plaintiffs offering performance of their part of the agreement on making out a clear title, as provided in the contract. The trial court found that the actual contract between the parties was not embodied in the written instrument, and that the claimed defect in the abstract did not justify refusal to accept the title offered, and dismissed the bill. Plaintiffs appeal.

There is nothing ambiguous about the contract between these parties. It complies with the requirements of the statute of frauds. The parties, the property, the price, the terms of payment, the time of performance, are all definitely fixed. True, it provides for the execution of a land contract; but a court of equity may specifically decree the performance of .an agreement to execute a land contract. Brin v. Michalski, 188 Mich. 400 (154 N. W. 110). The contract being complete in itself, unambiguous, certain in its terms, no fraud or mistake being alleged in the pleadings, it was error to receive evidence contradicting its provisions, or tending to show that it did not embody' all the agreements of the parties. We have so recently considered this question in a case for specific performance, where we discussed the question and cited authorities, that we content ourselves with citing that case. Smith v. Mathis, 174 Mich. 262 (140 N. W. 548). The agreement above set forth is therefore the contract, and the only contract, before us for consideration.

By the terms of this contract defendants agreed to furnish an abstract showing clear title. This provision was not complied with by furnishing a clear title by prescription, or a title not established of record, or one which rests on parol testimony. A clear title as matter of record, and as shown by abstract, is one thing; while a clear title by prescription, made good by the statute of limitations, and presumptions which may arise from undisputed possession, and shown by parol testimony, is another thing. They are by no means synonymous terms. We know, as matter of common knowledge, that, in buying and selling real estate, abstracts are usually desired by the purchaser, in order that they may be submitted to those skilled in the law for an opinion as to their validity. A clear title, as matter of recordáis much more desirable, much more valuable, much more salable, than one depending for validity upon the testimony and memory of witnesses. A clear title, shown to be such by an abstract and resting on the record, was one of the valuable considerations of this contract. It was what the parties contracted for, and the obligation to furnish it was not discharged by furnishing any other title. Ford v. Wright, 114 Mich. 122 (72 N. W. 197) ; Page v. Greeley, 75 Ill. 400; Taylor v. Williams, 2 Colo. App. 559 (31 Pac. 504) ; Constantine v. East, 8 Ind. App. 291 (35 N. E. 844); Spooner v. Cross, 127 Iowa, 259 (102 N. W. 1118); Fagan v. Hook, 134 Iowa, 381 (105 N. W. 155, 111 N. W. 981); Brown v. Widen (Iowa), 103 N. W. 158; Howe v. Coates, 97 Minn. 385 (107 N. W. 397, 4 L. R. A. [N. S.] 1110, 114 Am. St. Rep. 723); Horn v. Butler, 39 Minn. 515 (40 N. W. 833); Bruce v. Wolfe, 102 Mo. App. 384 (76 S. W. 723); Crosby v. Wynkoop, 56 Wash. 475 (106 Pac. 175); Zunker v. Kuehn, 113 Wis. 421 (88 N. W. 605); Noyes v. Johnson, 139 Mass. 436 (31 N. E. 767); Kane v. Rippey, 24 Or. 338 (33 Pac. 936). It was said by the court in Page v. Greeley, supra:

“Where a purchaser has contracted for a good title of record, and, upon a bill filed by the vendor, it appearing that the latter had not such a title as he covenanted to convey, for the court to permit the vendor to establish a title depending upon adverse possession, under the statutes of limitations, and compel the vendee to take that as a substitute for what was contracted for, is, in effect, for the court to make a new contract for the parties, and then execute it. In the very nature of things, a good title of record to real estate must, under our laws, be more reliable, and consequently more valuable and desirable, than one depending upon a variety of extrinsic circumstances, to be established by parol evidence.”

The supreme court of Iowa, in Brown v. Widen, supra, very tersely stated:

“The contract called for an abstract showing good title, and nothing less than this would satisfy the condition, no matter what the vendor's real title might be.”

Mr. Justice Ladd, speaking for the court in Fagan v. Hook, supra, said:

“The title may be good; but one to whom an abstract showing good title has been promised as a condition precedent is not bound to accept any evidence thereof, except that contained in the abstract. The vendee in such a case is not required to accept or rely on parol evidence of title, or information dehors the records, or the word of the vendor. That the title was not only to be good, but that the abstract was to so exhibit it, was a valuable consideration in entering into the agreement; for every one recognizes the superior salability of land with good paper title.”

Under the contract the defendants had agreed to furnish an abstract showing a clear title; if the abstract did not show a clear title, it was inadmissible to show by parol proof that their title was a clear one. If the abstract did not show a clear title, it was proper for the plaintiffs to request that the defect be cured, and the duty of the defendants to cure it. It was within their power. Mrs. Arnold was the granddaughter of Albert Polansky, and under the circumstances of the case might have proceeded to have the estate of her grandfather closed in the regular way; this she refused to do.

It is urged with considerable vigor that the abstract does show a clear title, and that plaintiffs should have accepted it; that the lapse of time has been so great that it must be conclusively presumed that there were no debts against the estate of Albert Polansky. The lapse of time may raise a strong inference that there are no debts; but, in the absence of a statute of limitations, there is no such conclusive presumption. Our attention has been called to no statute, and we are unaware that any existed prior to Act No. 256, Pub. Acts 1915, 3 Comp. Laws 1915, § 14620 (passed since this case was heard in the court below), barring claims against decedents in the absence of the appointment of commissioners on claims, or the substitute therefor — a hearing of claims before the probate judge, and a closing of the estate. Several cases are cited by counsel in which this and other courts have held that a title by adverse possession is a merchantable title. We have already shown that the defendants here contracted to furnish an abstract showing clear title, and did not contract to furnish a merchantable title growing out of adverse possession. But all these cases holding that a merchantable title may be acquired by adverse possession are bottomed on the statute of limitations. The title ripens, when, and only when, the statutory period has run. The bar to the action is the limitation of the statute, and where no statute of limitation is found the bar does not exist. As. to claims against the estates of decedents, not only was there no statute of limitations at the time of this transaction, but the statute expressly permitted a creditor to revive the commission “at any time before the estate is closed.” Section 11084, 4 How. Stat. (2d Ed.), (3 Comp. Laws 1915, § 13870). This was an absolute right; the application may be made ex parte and without notice, and exists as long as the estate is not closed. Bresler v. Wayne Probate Judge, 152 Mich. 167 (115 N. W. 960); Hart v. Shiawassee Circuit Judge, 56 Mich. 592 (23 N. W. 326); Heavenrich v. Nichols’ Estate, 113 Mich. 508 (71 N. W. 852); Pratt v. Houghtaling, 45 Mich. 457 (8 N. W. 72).

One who buys land from heirs or devisees before the estate is closed takes it subject to the debts and expenses of administration. Armstrong v. Loomis, 97 Mich. 577 (56 N. W. 938), and authorities there cited. There is a way provided in the statute for foreclosing claims against estates of decedents, viz.: Appointment of commissioners, or a hearing of claims by the probate judge, and closing the estate; prior to the act of 1915 this was the only method by which they might be barred.

The abstract in the instant case showed that this had not been done. The title, as shown by the abstract, therefore, was not free from reasonable doubt. It was within the power of the defendants to remove this doubt, to perform their contract, to make clear the record title; in such case specific performance may be decreed. Brin v. Michalski, supra.

It is insisted that plaintiffs should have tendered for execution a land contract and the money before the suit was brought, and that tender of performance in the bill is not sufficient. An examination of the authorities cited above will show that, in those cases where the question of tender arose in cases growing out of a contract to furnish an abstract, the furnishing of the abstract is a condition precedent to the execution of the contract and the payment of the money. But it is unnecessary for us to go further than to say that 'in the instant case we are satisfied that defendants refused to go further with the deal unless plaintiffs accepted the title offered, and so stated to Mr. Ogooshevitz; that they gave him to understand that he could take the title offered or nothing, and to further show that the deal was off they tendered him the $50 paid on the contract. The law does not require a needless thing to be done. A tender would have been fruitless; under such circumstances it was unnecessary.

The remedy by specific performance is not a remedy of right, but rests in the sound discretion of the court. The only ground urged by defendants, upon that discretion in this case, is an increase in the value of the property. This appears in the brief for defendants, but not in the record. If we should accept the statement in the brief, it would not .be sufficient grounds to refuse a decree for specific performance. Cotharin v. Knoch, 99 Mich. 322 (58 N. W. 380).

The decree of the court below is reversed, and one here entered in conformity with the prayer of the bill, with costs of both courts to plaintiffs.

Kuhn, C. J., and Stone, Ostrander, Bird, Moore, Steere, and Brooke, JJ., concurred.

On Rehearing.

Fellows, J.

An application for a rehearing on the. merits was filed in this case, together with affidavits and a counter affidavit upon the question of delay, and an accounting to defendant Mrs. Arnold for certain payments and expenditures made by her since the bill was dismissed in the court below. We denied the application for rehearing on the merits, but granted a rehearing on the question whether “any credits should be allowed defendant Mrs. Arnold. If so, how much?”

This case was heard in the court below, and the bill was dismissed April 23, 1914. It was heard in this court April 11, 1917. For this delay of nearly three years neither party is entirely blameless. During this period Mrs. Arnold made expenditures on the premises, some of which are of a permanent character. It is insisted by her counsel that an allowance for these sums, together with interest on the land contract, should be' made. But it also appears that she has had the use and occupation of these premises, and it is not made to appear that there is or could be any balance due her over and above the value of such use and occupation. Both counsel have furnished us with citation of many authorities and discussed at some length the legal rules to be enforced. The difficulty, however, which we encounter grows out of the paucity of facts to which the legal rules may be applied. Upon the state of this record we cannot make an allowance for these items.

One item paid by Mrs. Arnold since the case was heard in the court below is sufficiently definite. A reference to the original opinion will show that Mrs. Arnold had deeded the premises to one Gayman and took a land contract back; that this was done to secure a loan. The record shows that at the beginning of the hearing in the court below plaintiffs’ counsel stated with reference to this:

“I will say right now we are willing to take it subject to that now. We never made any question about that.”

It was not claimed either in the court below or in this court that this condition made a defective title. Plaintiffs’ testimony negatives such conclusion, and shows that plaintiffs recognized the validity of this obligation and assumed it in case decree passed for specific performance. The motion for rehearing shows, and it is supported by affidavit, and not denied, that Mrs. Arnold has since the hearing in the court below paid off this obligation. She should be reimbursed the money so paid. We have not the exact amount before us, but upon the settlement of the decree it may be ascertained. When paid it shall be endorsed as a payment on the purchase price. No costs will be allowed on this rehearing.

Kuhn, C. J., and Stone, Ostrander, Bird, Moore, Steere, and Brooke, JJ., concurred.


source: Caselaw Access Project

author: Fellows, J.

license: Public Domain

text:
    LAKE ERIE LAND CO. v. CHILINSKI.
    1. Evidence — Written Contracts — Eraud— Parol Evidence — When Admissible to Explain.
    While, where a written instrument is unambiguous, parol testimony is inadmissible to explain, change, vary or contradict its terms, yet, where the issue is one of fraud, evidence of what was said during the preparation and execution of the instrument tending to establish the fraud, is admissible.
    2. Vendor and Purchaser — Abstracts—Merchantable Title.
    If an abstract does not show' on its face a merchantable title and requires parol proof to establish the fact that the title is a merchantable one, a contract agreeing to furnish an abstract showing a merchantable title is not complied with, as the abstract itself-'inust furnish the evidence that the title is merchantable.

    3. Same — Land Contracts — Abandonment.
    There is an abandonment and surrender of a contract for the purchase of land by a contract purchaser, where, upon the seller demanding a past due payment and telling him that, in order to provide for the balance owing on the purchase price due the one from whom the vendor purchased the land, it will he necessary to sell the land unless the payment is made, and the contract purchaser tells the vendor to sell the land if he has a buyer.
    4. Same — Assignments—Rights of. Assignee.
    A purchaser of land taking an assignment of a land contract running to a third person acquires simply the rights of the vendor and if the contract is unenforceable against the latter it is likewise unenforceable against the vendee.
    5. Equity — Pdeadings—Amendments During Tetad — Discretion of Court.
    It lies within the discretion of the trial court, in a suit by a contract purchaser for specific performance, to allow a purchaser of the property from the vendor to file an amended answer in the nature of a cross-bill for the removal of the contract as a cloud on the title during the hearing of the case.
    6. Specific Performance — Not Remedy of Right — Discretion of Court.
    The remedy by specific performance is not a remedy of right, but it rests in the sound discretion of the court, and this discretion should not be exercised unless the case is clear, and should, never be exercised where the moving party does not come into equity with clean hands.
    7. Same — Unconscionabde Contract — Discretion of Court.
    The specific performance • of a contract for the purchase of real estate in favor of the purchaser will be denied where the latter is a clever and financially irresponsibe promoter and so frames the contract as to permit of protracted delays in payment, and the sellers are ignorant people of foreign extraction, and it is unlikely that any tender of payment would have been made by him except for a profitable real estate transaction, and, when pressed for payment, told the vendors to sell the property to somebody else and remained inactive until after the making of the sale.
    8. Same — Evidence—Accounting.
    The evidence was sufficient to show that the contract purchaser who was unsuccessful in his suit for specific performance paid for certain personal property on the land out of the* proceeds of the sale of fish on the land so as to. not entitle him to an accounting for such sum.

      9. Appeal and Error — Scope of Review.
    A question which is not raised in the trial court or in the original brief cannot be raised on appeal.
    Appeal from Wayne; Sharpe, J., presiding.
    Submitted April 10, 1917.
    (Docket No. 121.)
    Decided July 26, 1917.
    Bill by the Lake Erie Land Company and another against Wladislaw Chilinski and others for the specific performance of a land contract. From a decree for defendants, plaintiffs appeal.
    Affirmed.

      Sherman D. Callender and Walter M. Trevor, for plaintiffs.

      Harry H. Wait, for defendants Chilinski.

      Wilkinson, Routier & Hinkley, for defendant Stuart.

      Lucking, Helfman, Lucking & Hanlon, for defendant Stanton.

      As to what constitutes a marketable title, see comprehensive note in 38 L. R. A. (N. S.) 1.
      On duty of vendor as to abstract of title, see note in 43 L. R. A. (N. S.) 44.

   Fellows, J.

It will not be necessary or profitable to attempt a résumé of the pleadings in this case, which cover 79 pages of the record. The case must largely be disposed of as one of fact, and the pleadings are admittedly sufficient to permit disposition of the questions involved. We shall state the facts which we find established by the record, and only refer to the pleadings and the claims of the - various parties as occasion may require.

Defendants Wladislaw Chilinski and Teodozia Chilinski are husband and wife. They had lived in Detroit for 30 years, Mr. Chilinski was by occupation a merchant tailor; they had accumulated some property. On December 9, 1914, they purchased from defendant Stanton, on a contract, a farm of 300 acres, located below Detroit and fronting on Lake Erie. The consideration was $25,000; $15,000 was paid in cash and property, leaving $10,000 unpaid, and of which sum $2,000 was due December 10, 1915. Mr. and Mrs. Chilinski spent one summer on the farm. It would appear that Mrs. Chilinski grew somewhat discontented, and they became apprehensive that they would be unable to meet their payment, and decided in the early summer of 1915, that they would sell the farm. The farm, known in the record as the “Stanton Farm,” was not all under- cultivation. It had several houses, one called the “Club House,” located near the lake, and the fishing privileges and paraphernalia were regarded as of some value.

The Chilinskis engaged several real estate agents to sell the farm for them, among them being Perry Shumway. Their price was $25,000. On August 4, Mr. Shumway brought plaintiff Lord out to the farm and introduced him as a millionaire steel manufacturer of Toledo, who wanted to buy the farm. The farm was looked over quite thoroughly, some time being occupied, during which Lord took occasion to impress Mr. Chilinski with his wealth and importance, telling him that he was part of a big corporation, one of the best furnace and steel men; that he was going to meet Mr. Carnegie shortly to purchase a large amount of steel. He also impressed upon Mr. Chilinski that he must keep- the transaction secret, as he (Lord) desired to buy more land around there to put up a furnace, and apparently was much impressed with the place and wanted to buy it, although his available funds were somewhat tied up. We are clearly of the opinion that the impression then made by Lord, through his representations as to his wealth and standing, the statements made by Shumway in Lord’s presence, and not disputed by him, were the procuring cause of the contract made the next day, and of the confidence reposed in Lord by the Chilinskis as to the effect of its provisions. As a matter of fact Lord was a promoter pure and simple, totally unable financially to perform; his part of the contract, with little standing in the community where he lived, with judgments and claims, large and small, hanging over him, with a record of unsuccessful promotions behind him, and without any bona fide belief on his part that he could’swing the deal unless something turned up, or he might succeed in transferring his contract to other hands. It is patent on its face that, had not the Chilinskis believed Lord to be the prosperous business man he led them to believe he was, or had they actually known the true situation, no contract of any kind would have been entered into.

• It was agreed that they should meet at Lord’s office and execute the contract the next day. Shumway had put a price of $30,000 on the farm and agreed to share the excess with Mr. Chilinski. The next day the Chilinskis went to Detroit to execute the contract; they went to Mr. Lord’s office on the seventeenth floor of the Dime Bank Building; the name on the door, “Border Steel Manufactory,” and pieces of steel shown them, bore out the impressions created the day before. Mr. Lord prepared the contract, the Chilinskis not being represented by counsel; they took with them their contract with defendant Stanton, which Lord examined ; he informed them that it was an unfair contract, and proposed to give them a better one. Considerable time was consumed in the preparation of this contract, and it was rewritten several times. Evidence was offered and received, over plaintiffs’ objection, as to statements made by Lord during the preparation and execution of this instrument, which are claimed to be inadmissible for the reason that they tend to change the terms of a written instrument. The rule is well recognized that, where a written instrument is unambiguous, parol testimony is inadmissible to explain, or to change, vary, or contradict, its terms. But where the issue, as here, involves the question of fraud, evidence of what was said, tending to establish the fraud, is admissible. Something like four or five hours were consumed in the preparation of the contract, and it was finally executed in duplicate. By its terms it provided for no down payment. The first payment of $500 was payable on delivery of abstracts showing merchantable title, certified to date of delivery. This provision Mr. Chilinski demurred to, and wanted to make it September 1st, but was assured by Lord that this was in the form of the contract and would have nothing to do with holding up the money. The next payment of $4,500 was due October 15th, $2,-000 was due January 1st, and the balance in deferred payments. The contract provided for immediate possession by Lord. After the execution of the contract, and on the same day, Mr. Chilinski obtained the abstracts of Mr. Stanton and delivered them to Mr. Lord to have them certified to date; Lord representing that he could have this done more cheaply, than Chilinski could. They had recently been certified, and there were $o additional transfers to put on.

On August 25th a short memorandum was signed by the Chilinskis and Lord, in which the Chilinskis agreed to sell some furniture in the club house, and some nets, boats, etc., including one-half interest in the fish in the fish pen, to Lord for $150,. with the proviso that $350 additional should be paid if Lord’s half interest in the fish were sold for $500, with a reduction in amount proportionate to the reduction below that figure that the fish brought. August 25th Lord organized and became president of the plaintiff Lake Erie Land Company, with $1,000 capital stock, of which $500 was paid in cash by Lord’s wife, 48 shares standing in her name, and 1 share each in the name of Lord and H. E. Schiller. On August 30th, Lord assigned the contract with the Chilinskis to this corporation.

It would render this opinion unnecessarily prolix to detail the many attempts of the Chilinskis to get some money from Lord, or his company, on this contract; they succeeded in getting $50. Many times Lord’s excuse was that the abstracts had not been returned from the abstract office. We have already stated that the abstracts were delivered to Lord August 5th; that the only thing to be done with them was to certify them to date, less than a year from their last certificate, with no new transfers to be put on. Lord says that he did not get them until October 7th, and claims the delay is: chargeable to the abstract office. It is to us, however, a significant fact that three of the four bills rendered by the abstract company for services in certifying the abstract, and which are exhibits in the case, bear date August 25th, but were not paid until October 7th. The other bill bears no date, but was also paid October 7th. It is highly improbable that these bills antedate the performance of the services, and quite probable that, had Lord been as insistent in getting the abstract back from the abstract office as he claims, he would have been successful before the 7th day of October.

A suit was commenced by one White, a real estate dealer, against Chilinski on August 31st, and garnishment proceedings were instituted against both plaintiffs. It appears from the testimony of. White’s former partner that White’s claim was for services in making the sale to Lord, although the record does not disclose that he was active in any way in that transaction. Chilinski gave bonds in both garnishment proceedings, and the proceeding against Lord was discontinued October 5th, and that against Lake Erie Land Company October 7th.

Soon after the abstracts were returned to Lord, they were turned over to his attorney for examination. There was no unnecessary delay on the part of the attorney in their examination. The abstracts were long and complicated; the examination careful, painstaking and exhaustive; all defects of major or minor importance were discovered and noted; the result of the examination was opinions on the different abstracts that the abstracts did not show merchantable title. Two days before the first opinion was rendered on any of the abstracts, and on October 28th, Mr. Chilinski’s attorney, Mr. Wait, wrote a letter to Lord and the company, demanding return of the abstracts and payment of the sums due on the contract on or before November 1st, or in default that the contract was declared forfeited. Plaintiff’s attorney wrote Mr. Wait, in reply to this letter, explaining that the demands upon his time had prevented the examination of the abstracts, and inclosed copy of an opinion as to one of them, with the claim that the abstract did not show a merchantable title. Thereafter negotiations continued between the attorney for plaintiffs and those for the Chilinskis and Stanton, and attempts were made to better perfect the record title. We are impressed that all of the attorneys were acting in the utmost of good faith, all of them believing that the transaction was a bona fide affair, and all of them trying to bring the deal to a conclusion; one of the suggestions being a chancery proceeding to quiet title, in which all defects appearing in the abstract might be cured. None of the defects were at all serious. We do not feel that the Chilinskis’ attorney, by any act in trying to get the deal closed, waived their rights.

Through all the negotiations, and indeed throughout the litigation, it seems to be conceded that Stanton had a merchantable title, acquired through adverse possession. Most of the farm had been in the Stanton family for over 40 years, and all of it for a period beyond the statute of limitations. The distinction is most strenuously urged by plaintiffs between a merchant- able title as matter of fact, and the showing of a merchantable title by an abstract. Counsel insists that one may have a merchantable title, even though the abstract does, not show it, and urges that this contract calls for an abstract showing a merchantable title, and that the abstracts, do not show it. The distinction must be recognized. This court and other courts have recognized it. If an abstract does not on its face show a merchantable title, and it requires-parol proof to establish the fact that the title is. a merchantable one, a contract agreeing to furnish an abstract showing a merchantable title is not complied with. The abstract itself must furnish the evidence that the title is merchantable. Quite likely Lord had this distinction in mind when he drew this contract.

Persistent demands on Lord by the Chilinskis for money were fruitless. A payment of $2,000 was due to Stanton on their contract December 10th. The fore part of that month Chilinski went to see Lord in a last-attempt to get some money. Chilinski and Lord alone were present at this interview. Their testimony as to what took place is in direct conflict. We must adopt as true one or the other of their versions of the talk. Mr. Chilinski claims that he explained that he must have the money to pay Stanton in order to insure Lord’s getting the place, or he would have to sell it to some one else, and that Lord told him, if he had any customer, to sell the place. Lord denies that he said this. When we take into consideration the fact that several very reputable witnesses testified that Lord’s general reputation for truthfulness was bad, consider all the transactions involved in this litigation, consider the fact that for four months Chilinski had been nagging him for money, and when we carefully read the testimony of these two men, as it appears in this record, we are bound to accept the version of Chilinski as to what took place, and particularly in view of the fact that nothing further was done by Lord until he learned that the place had been sold, when he at once became active. This must be regarded in this proceeding as tantamount to an abandonment and surrender of this contract.

The Chilinskis proceeded to sell the premises to defendant Stuart shortly after this conversation, but the deal was not closed until December 29th, when Stuart took an assignment of the Stanton contract, and deeded certain property to the Chilinskis, and paid the balance in cash. Stuart frankly states that he saw and read over the Lord contract. He was told by the Chilinskis and their attorney that the contract had been forfeited, but he made no inquiry of Lord as to his claim. We do not find that he was a bona fide purchaser, but' by the assignment of the contract with Stanton he acquired all the rights of the Chilinskis, no more and no less. If the Lord contract was not enforceable against the Chilinskis, it was not enforceable against their assignee.

Lord soon learned of this transaction; this bill was filed on January 6, 1916, praying for a specific performance of the contract of August 5th. Prior to filing the bill no tender was made, although- in the bill performance is offered. Later, and on February 16th, a tender to defendant Stanton of $2,000 was made, and on the same day a tender of $4,950 was made to defendant Stuart, and a like tender was made to defendants Chilinski. On February 15th, $2,000 was deposited with the clerk of the court as a tender of the amount due defendant Stanton; April 20th a supplemental bill was filed with leave of the court. Answers to the original and supplemental bills were filed. An amended answer in the nature of a cross-bill was filed by defendant Stuart, during the hearing of the case, by leave of the court. It was clearly within the discretion of the trial court to permit this to be done. By this amended answer defendant Stuart asks that the Lord contract be declared a cloud on his title and removed. Defendant Stanton, in the court below and in his brief filed in this court, assumes a neutral attitude.

The case was advanced for hearing, and over a week was consumed in taking proofs. The trial court found that the Chilinskis were people of considerable intelligence, understood English fairly, but had little experience in making contracts, and little understood the meaning of many of the provisions of the contract drawn by Lord; that Lord was a clever promoter; that the contract was procured by misrepresentation, and was unconscionable; that Lord, when he procured the contract, was in no position financially to carry out its terms, and that it was procured by him for speculative purposes; that it was unenforceable in a court of equity, and should be set aside. The bill and supplemental bill were dismissed, and the prayer of defendant Stuart’s cross-bill was granted. Plaintiffs were to be repaid the $50 paid to the Chilinskis and the costs of certifying the abstracts.

With this disposition of the case we agree. This bill is filed to procure the specific performance of the contract. Remedy by specific performance is not a remedy of right. It rests in the sound discretion of the court. That discretion should not be exercised, unless the case is clear. It should never be exercised where the moving party does not come into court with clean hands, with equities in his favor. This unconscionable contract was procured by this clever and irresponsible promoter from this Polish couple, by misrepresentations well calculated to beget confidence, well calculated to deceive. They were anxious to dispose of the farm. Unskilled and inexperienced in the technical phraseology of legal documents, with the glamour of a millionaire steel man surrounding Lord, they were “clay in the potter’s hands.” With no one to protect their rights, Lord procured from them a contract which gave him immediate possession, with no down payment, so worded the contract as to permit protracted delays in perfecting the record title, and then told them it would not hold up the payment of their money, all the time holding himself out as a man of means, although wholly irresponsible. Had he not made a fortunate turn in a real estate deal pending this transaction, it is highly improbable any tender could have been made. Having procured the contract, he organized a $1,000 corporation, with $500 paid in, to handle this $30,000 contract, and assigned the contract to the corporation. When pressed, and pressed hard, he finally consented that Chilinski might sell to some one else, remained inactive until after the sale was made, and then filed this bill, asking a court of equity to exercise its discretion and enforce the contract. Courts of equity; were not created to enforce such transactions as we find detailed in this record, but they should not hesitate to set them aside.

Some minor questions are raised by plaintiffs’ counsel which require consideration. We have referred to a memorandum, made August 25th, for the sale of some personal property. It is urged that Lord has not received all of this personal property, and that part of the same is now involved in a replevin suit. Counsel insist that Chilinski should be decreed to pay the value of some or all of this property. Lord paid the $150 contemplated by this contract, by a check which went to protest. Later he paid this sum. Chilinski testifies that it was paid with money obtained by Lord from the sale of fish owned by Chilinski ; Lord denies this. For the reasons already given, we give credence to Chilinski’s testimony; if it is true, and we believe it is, Lord is not entitled to an accounting on this transaction. The decree of the court below went as far in allowances to plaintiff as the facts justify.

In a reply brief, filed by plaintiffs after the case was submitted in this court, it is urged for the first time that Stuart is not entitled to affirmative relief, because it amounts to the enforcement of a land contract upon which the specific tax required by Act No. 91 of the Public Acts of 1911 (1 Comp. Laws 1915, § 4268 et seq.) has not been paid. It is not necessary for us to determine whether this is a case for the application of this statute; the question was not raised in the court below, or in the original brief; under numerous authorities, it is too late now to raise it.

The decree of the court below is affirmed, with costs to the defendants. One solicitor’s fee will be allowed.

Kuhn, C. J., and Stone, Ostrander, Bird, Moore, Steere, and Brooke, JJ., concurred.


text:
    GORDON v. ST. PAUL FIRE & MARINE INSURANCE CO.
    1. Insurance — Fire Insurance — Contracts—Policy—Reasonable Requirements — Validity.
    The provision of a fire insurance policy for the examination under oath of the insured by the company and stating that no action may be maintained on the policy unless such requirement has been complied with, is a reasonable and valid one, and generally enforceable, and one who without cause refuses to submit to such examination may not recover on the policy.
    2. Same — Fire Insurance — Examination or Insured Under Oath.
    At such examination the insured is entitled to the presence of her attorney.

      3. Same.
    There is no refusal by the insured to submit to such examination after the loss where she simply refuses to submit to an examination in the absence of her attorney, and the latter upon his return, and after commencement of an action, states that he is willing to arrange for an examination.
    4. Same — Evidence—Admissibility.
    Evidence of a conversation between the insured, her husband, and defendant’s agent at the time the insurance was solicited, relative to the premises being vacant, is admissible to show knowledge by the agent of the vacancy of the premises at the time the policy was negotiated.
    5. Same.
    Evidence as to the construction placed upon the word “vacant” in the policy by defendant’s agent at the time of the solicitation of the insurance was inadmissible, since the question.whether a house was vacant within the meaning of the policy was a question of law for the court, but its admission was not prejudicial, the case, in its final analysis, becoming one for the court.
    6. Same — Fire Insurance — Teems oe Policy.
    The defendant fire insurance company was precluded from availing itself of the provision in the policy rendering it invalid where a loss occurs after the premises have been vacant for more than 10 days, where the premises were vacant at the time of solicitation of the insurance to the knowledge of the company and were vacant for several, months before the loss, and it was immaterial that the premises were occupied within 10 days from the date of the policy, the controlling consideration being whether there was a change in condition of the premises from the condition known when the risk was accepted.

    7. Couets — Rules.
    The rule of stare decisis cannot be lightly brushed aside.
    8. Insurance — Fire Insurance — Statutes—Construction.
    Act No. 167, Pub. Acts 1897 (2 Comp. Laws 1915, § 9481 et seq.), and the standard policy act of 1905, Act No. 277, Pub. Acts 1905 (2 Comp. Laws 1915, § 9475 et seq.), were designed to curb the right of insurance companies to declare forfeitures and not to make them more available.

      Error to Allegan; Cross, J.
    Submitted April 19, 1917.
    (Docket No. 136.)
    Decided July 26, 1917.
    Assumpsit by Catherine Gordon against the'St. Paul Fire & Marine Insurance Company on a policy of insurance. Judgment for plaintiff on a directed verdict. Defendant brings error.
    Affirmed.

      Norris, McPherson, Harrington & Waer, for appellant.

      Diekema, Kollen & Ten Cate, for appellee.

      As to effect, on provision as to vacancy, of agent’s representations or knowledge, see note in 4 L. R. A. (N. S.) 758.

   Fellows, J.

On June 7, 1913, defendant issued to plaintiff a Michigan standard form insurance policy for $1,200 on a dwelling house and $100 on a woodshed located a short distance from Saugatuck and beyond fire protection of that village. While a new policy was issued, it was a renewal with a small increase of the amount then carried. The policy was for three years, and took effect June 20th. The property was worth from $2,700 to $3,200. The agent of defendant solicited the insurance, and suggested that plaintiff take out insurance in a larger amount than she did, but she declined. The agent inquired if the house was vacant, and was told that it was. He asked if it would be vacant long and was told by plaintiff’s husband that he did not think so. Plaintiff, over defendant’s objection, was permitted to give evidence that she inquired of the agent whether she would get anything if anything happened while the house was vacant, and was told by him that it would not be vacant within the policy if she had some furniture in it, and visited it every ten days or two weeks. A tenant moved into the house in June and occupied it for some time, after which it was vacant again. Different tenants occupied it periodically. The last tenant moved out some five or six months prior to the total loss by fire on June 12,1916, the cause being unknown. Proof of loss was filed, and defendant denied liability. Such, further facts as may be important will be detailed in connection with the discussion of the questions involved. The facts are not in dispute, and at the close of the case both parties asked for a directed verdict. After argument of the questions the court directed a verdict for the plaintiff for the amount of the policy with interest, and defendant brings the case here.

Two questions are presented on this record for review. One relates to the right to maintain the present action; the other goes to the whole merits of the case and reaches the right of the plaintiff to recover in any event.

The policy contains the following provisions:

“The insured, as often as required, shall * * * submit to examinations under oath by any person named by this company, and subscribe the same. * * * No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity until after full compliance by the insured with all the foregoing requirements.”

On September 8th, following the fire, defendant wrote plaintiff a letter demanding an examination under oath, and fixed September 13th, at 2 o’clock in the afternoon, at plaintiff’s residence, as the time and place for such examination. Upon receipt of this letter she turned it over to her attorney. On the day fixed he had arranged to be in Columbus; Ohio, and gave her a letter to show defendant’s attorney, stating that he had a previous engagement and advising her to state to him that she desired her attorney present at such examination.. She declined to submit to an examination in the absence of her attorney. On September 14th, plaintiff’s attorney wrote the company that he had commenced suit, but stated he would be glad to arrange for an examination of plaintiff. No ex-animation of plaintiff was had, nor was any further attempt made by either side to arrange for one. Some heat appears to have been engendered over some of the negotiations preliminary to this suit, including the question of examining plaintiff. It is quite likely that counsel might, by consultation, have been able to arrange a day mutually agreeable for this examination and avoided any acrimony. We are concerned, however, with the legal rights of the parties, and do not feel called upon to determine for counsel the legal ethics involved in their controversy. The plaintiff was a witness upon the trial, and fully testified on both direct and cross-examination.

The provision of the policy above quoted is a valid one and as a general rule enforceable, and one who without cause refuses to submit to examination should be precluded from maintaining an action on the policy. The purpose of the examination is to elicit the facts in order that the company may determine whether it will defend or adjust the claim. It is not to be used solely to obtain partial, unfavorable, or inaccurate admissions from a party, to be used in future litigation.

In all cases arising under it the party to be examined is entitled to the presence of his or her attorney. Thomas v. Insurance Co., 47 Mo. App. 169; American Central Insurance Co. v. Simpson, 43 Ill. App. 98. This is a reasonable condition, and changes no stipulations of the contract. The contract does not provide for a private examination of the insured, and there can be no reasonable objection to a bona fide request that such examination be conducted in the presence of the insured’s attorney. In the instant case the plaintiff did not refuse to submit to an examination if it could be had when her attorney could attend. He was in Columbus, Ohio, the day fixed by defendant for the examination. He returned shortly. Under the circumstances of this case the request of the plaintiff that her attorney be present when such examination took place did not amount to a refusal to submit to an examination so as to preclude her right of recovery.

The other question grows out of the following provision of the policy:

“This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void * * * if a building herein described, whether intended for occupancy by owner or tenant, be or become vacant or unoccupied and so remain for ten days, provided a loss shall occur on the property insured while such breach of condition continues or such breach of condition is the primary or contributory cause of the loss.”.

We have already stated the conversation between the plaintiff, her husband, and defendant’s agent at the time the insurance was negotiated. It was admissible for plaintiff to show that defendant’s agent had knowledge when the policy was written that the premises were vacant. It was inadmissible to show the agent’s construction of the word “vacant” as used in the policy. Whether under a given state of facts a house is vacant within the meaning of the contract of insurance presents a question of law, and the agent’s opinion could not bind the defendants or the courts. In this case the admission of this testimony was not prejudicial to the defendant as the case in the final analysis became one for the court.

Upon the undisputed facts the premises were vacant and unoccupied, to the knowledge of defendant’s agent, and therefore to its knowledge, at the time the policy was issued, and at the time it took effect. Under the undisputed facts the premises were vacant and unoccupied at the time of the fire. In other words, the premises, when the contract of insurance was written and at its inception to the knowledge of defendant, were in the same condition as when the fire occurred. This court, in the case of Aurora Fire & Marine Ins. Co. v. Kranich, 36 Mich. 289, had under consideration a policy of insurance containing a vacancy clause similar to, but not in the exact language of, the clause here involved. The agent, when he issued the policy, knew that the premises were vacant; they were vacant at the time of the fire. Speaking through Mr. Justice Marston, it was said:

“If, however, the property is unoccupied when the risk is taken, and there is no provision in the policy requiring the insured to make any change in this respect, we are of opinion the company would be liable under the policy for a loss occurring at a time when the property was vacant, even although it might appear that intermediate the date of issue of the policy and date of loss the property had been actually occupied. Under such circumstances the risk is in no way increased or changed. The property is in no worse situation at the time of the loss than it was when the policy was. issued. The policy, although framed to carefully guard the rights of the company, makes no provision for such a state of facts, and the law will not step in and relieve the company from responsibility where the provisions, of the policy have not been violated by the insured, and where the state of the property has at all times during the continuance of the policy been in as favorable a condition as it was when the policy was issued.”

It is urged by the defendant that this case should not be followed, that legislation since enacted, together with construction put upon such legislation by the court, make the case no longer controlling, that in the Kranich Case, under the policy there involved and the then state of the law, vacancy rendered the policy void without revival, that this court was there dealing with a contract of insurance void for all purposes, in its inception, if the company’s theory was. adopted, that under Act No. 167, Pub. Acts 1897 (2 Comp. Laws 1915, § 9481 et seq.), and the standard policy act of 1905 (Act No. 277, Pub. Acts 1905, 2 Comp. Laws 1915, § 9475 et seq.), vacancy without consent must exist for ten days before the forfeiture becomes effective, and upon the premises becoming occupied again the contract of insurance again attaches and becomes valid, that the policy becomes valid, or void, by the action of the insured, and that in the instant ease the policy was valid for the ten days following the 20th day of June, and that, inasmuch as it was occupied during that period, the policy was valid until the premises were again vacant and remained so for a period of ten days, and that, the loss having occurred after the premises had been vacant for several months, the forfeiture for vacancy was available to defendant, and the following cases are cited: England v. Insurance Co., 81 Wis. 583 (51 N. W. 954, 29 Am. St. Rep. 917); Moore v. Insurance Co., 199 Pa. 49 (48 Atl. 869, 85 Am. St. Rep. 771); Queen Ins. Co. v. Chadwick, 13 Tex. Civ. App. 318 (35 S. W. 26). The reasoning of counsel and the cases cited, together with the case of Royal Ins. Co. v. Lubelsky, 86 Ala. 530 (5 South. 768), might be quite persuasive if this were a case of first impression in this jurisdiction; but it is not. The rule stare decisis cannot be lightly brushed aside; nor are we persuaded that the legislation to which we have referred should be given the effect contended for. This legislation was not designed to make forfeitures more available to insurance companies, but was designed to curb the right to declare forfeitures. Nor are we persuaded that we should adopt the argument of counsel that because the contract contained the words “and so remain for ten days” that the contract of insurance was a valid one, and so remained for ten days, and, being a valid contract for ten days, the doctrine of the Kranich Case should not apply. The plaintiff did not contract for insurance for ten days; she entered into a contract of insurance for three years, paid the premium for that period, and did not contract in the policy to make any change in the then existing conditions. It is not, as we view it, a question of whether the contract was valid at its inception and so continued for ten days, but rather: Was there a change of condition of the premises from the condition known to the company when it accepted the premium and assumed the risk?

The Kranich Case and kindred cases proceed on the theory that the insurance company is estopped from asserting a forfeiture for a condition of the premises existing at the time of the fire, which existed to the knowledge of the company at the making of the contract, and which condition of the premises it was not agreed by the contract of insurance was to be changed. We have recently applied this doctrine. Blake v. Insurance Co., 194 Mich. 589 (161 N. W. 890); Marx v. Insurance Co., 192 Mich. 497 (158 N. W. 1052); Simpson v. Insurance Co., 184 Mich. 547 (151 N. W. 610).

In the Blake Case the policy prohibited the use of chimneys, unless constructed of brick or cement. But the agent knew at the time he took the application that one of the chimneys was not constructed of brick or cement, although the contrary was stated in the application. Its condition was the same at the time of the loss as at the time of the application.' It was held that the company could not avoid payment on the grounds of fraud in the application.

In the Marx Case it was provided in the policy that it should be void if illuminating gas or vapor was generated in the building. At the time of the issuance of the policy,-to the knowledge of the agent, illuminating gas was generated, and it was used under a different method at the time of the fire. The plaintiff was permitted to recover, notwithstanding the clause of the policy, and it was said by Mr. Justice Ostrander, speaking for the court:

“It is conceded that the indicated forbidden thing existed when the policy was issued, and that the defendant’s agent knew it. It is not claimed that, if no change had been made in the method of generating gas, or vapor, for lighting, the policy would be avoided. But as the defendant’s knowledge of the situation was imputed, and its knowledge of the change in method is not and cannot be imputed, the contention is that the condition stands violated, with the same effect as^ though no' knowledge of conditions had ever come to ‘defendant. The obvious, and in my opinion the conclusive, answer to this reasoning is that the condition relied upon was waived when the policy was issued; that is, it was agreed in' essence that generating illuminating gas, or vapor, in the described building or adjacent thereto, would not avoid the policy. Defendant is charged with knowledge of the condition existing when the policy was issued, and the condition had not changed when the fire occurred. There was no new, or other, or different, breach of the policy condition after the policy was issued.”

In the Simpson Case the policy had a rider attached stating that the policy covered the premises while occupied as a private dwelling. The premises were occupied at the time the insurance was procured and when burned as a mission house. It was claimed that the agent at the time the insurance was procured had knowledge of this fact. This court held that if he did have such knowledge the plaintiff was entitled to recover and the defendant estopped, and a large number of authorities from this and other jurisdictions are cited and discussed by Mr. Justice Moore.

The law as announced in the Kranich Case must be regarded as the settled law of the State. It is, we believe, in accordance with the weight of authority.'

If we carefully examine the cases apparently holding a contrary doctrine, we find that in England v. Insurance Co., supra, the defendant did not have knowledge of the condition of the premises, unless knowledge was imputed to it. In the case of Royal Ins. Co. v. Lubelsky, supra, it was held that the language of the policy showed a mutual expectation of the contracting parties, not amounting to a warranty, however, that the house was to be occupied as a dwelling. In Moore v. Insurance Co., supra, and Queen Ins. Co. v. Chadwick, supra, the company had knowledge that the premises were unoccupied when the policy was issued.

We naturally turn to New York on this question, due to the fact that we take our standard policy law from that State. In Bennett v. Insurance Co., 106 N. Y. 243 (12 N. E. 609), Mr. Justice Andrews, speaking for the court, said:

“The defendant insists that treating the policy as having taken effect as a valid contract of insurance upon an unoccupied dwelling, there was a breach of a condition subsequent contained in the policy which rendered it void. The policy was issued in August, 1876, for the term of three years. In April, 1878, a tenant was let into possession of the house, and occupied it until November, 1878, when he moved out, and the house remained unoccupied from that time until the fire, July 17, 1879. The claim is that, although the house was insured as unoccupied, yet, as the plaintiff afterwards, during the life of the policy, occupied it for a time by tenant, he could not thereafter discontinue the occupation during the subsequent life of the policy, and leave the premises vacant without forfeiting the insurance. The policy contains these among other conditions:'
“‘If til© dwelling bouse or bouses hereby insured shall cease to be occupied by the owner or occupant in the usual and ordinary manner in which dwelling houses are occupied as such, or be so unoccupied at the time of effecting insurance, and not so stated in the application, then, and in every such case, or in either of said events, this policy shall be null and void until the written consent of the company at the home office is obtained.’
“The defendant bases his contention upon the first of the conditions above quoted. It is plain, we think, that this condition was intended to protect the company against an increase of risk, by leaving premises vacant which were occupied at the time the insurance was effected, and that it has no application to a risk taken on an unoccupied dwelling house.”

In the case of Cross v. Insurance Co., 132 N. Y. 133 (30 N. E. 390), Mr. Justice Brown, speaking for the court, said:

“While the policy contains the usual conditions declaring it void if the plaintiff was other than the sole and unconditional owner, or if the buildings were on ground not owned by the insured in fee simple, or if it should become or remain vacant or unoccupied for ten days, the court held that these conditions were waived, and the evidence clearly supported that conclusion. The plaintiff’s son was the general agent of the defendant, and personally examined the buildings before issuing the policy and knew that they were vacant and unoccupied.”

Among other New York cases considering this question see New York Mutual Savings & Loan Ass’n v. Insurance Co., 110 App. Div. 760 (97 N. Y. Supp. 436), where many of the authorities are cited and considered; Blass v. Insurance Co., 18 App. Div. 481 (46 N. Y. Supp. 392); Short v. Insurance Co., 90 N. Y. 16 (43 Am. Rep. 138); Bear v. Insurance Co., 34 Misc. Rep. 613 (70 N. Y. Supp. 581).

In the case of Maxwell v. Insurance Co., 114 Me. 170 (95 Atl. 877), Mr. Justice Hanson, speaking for the court, said:

“The plaintiff was justified in believing that the property was insured as vacant property, as it was in fact; that it was unoccupied and might be during the life of the policy was well known to the company as well as to the agent, and we find no warrant in holding that an occasional occupancy and consequent occasional vacancies, as in this case, destroys the right to recover. The plaintiff procured insurance on vacant property. As such it waá destroyed by fire. She was protected by the policy.”

In Chamberlain v. Assurance Co., 80 Mo. App. 589, it was said:

“The second reason justifying the action of the trial court is that the facts in evidence warranted an inference that the agent who issued the policy was fully aware that the building was unoccupied when he delivered the contract of insurance, and by so doing intended to waive the provision avoiding the policy in case the premises were vacant or unoccupied for ten days. That such an agent may by his agreements, acts, or conduct waive the provisions for its forfeiture contained in a policy of insurance and estop his nonresident principal from enforcing such forfeitures, is now the settled law in this State.”

The court of appeals of Kentucky had the question before it in the case of London & Lancashire Ins. Co. v. Gerteisen, 106 Ky. 815 (51 S. W. 617), where a policy of insurance had been issued on a distillery not in operation when insured, and the title was not complete in the insured, but these facts were known to the agent. It was held that the insurance company would not be allowed to rely on conditions in the policy forfeiting it, and avoid it for these reasons, if at the time it issued the policy the facts were known to it.

In the case of Rochester Loan & Banking Co. v. Insurance Co., 44 Neb. 537 (62 N. W. 877, 48 Am. St. Rep, 745), the court had before it a policy containing a forfeiture clause for vacancy. The premises were vacant to the knowledge of the agent when the policy was issued and were vacant when the fire occurred. It was said by the court:

“It would seem almost unnecessary to cite authorities to show that, since the insured property was vacant and unoccupied at the date of the issuance of the policy in suit, which fact was actually known by the insurance company, and with that knowledge actually before it, it chose to insure the property, that in doing so it elected to and did waive the conditions in the policy that the same should be void if the property was at the time it was insured vacant. The knowledge of the agents of the insurance company that the property was vacant at the date .of the issuance of the policy was the knowledge of the company. Notice to an insurance agent who issues a policy of facts relating to the subject-matter of the insurance is notice to the company, and if he fails to properly state them in the policy when relied upon and trusted to do so, the company should not be permitted to escape liability on that ground.”

The Kranich Case is cited and quoted from in support of the conclusion reached by the court. The holding was followed in German Ins. Co. v. Frederick, 57 Neb. 538 (77 N. W. 1106).

It was said by the court in Germania Life Ins. Co. v. Klewer, 27 Ill. App. 590:

“The vacancy of the building, however, is no defense for appellant. When the policy sued on was issued, the house was unoccupied, and had been in that condition for several weeks. Of this appellant’s agent had full notice when the policy in question was issued. No objection was then made to the vacancy, nor did appellee promise to have the house occupied. The injustice of permitting appellant to now deny its liability on that ground is apparent. To deliver^ a policy with full knowledge of the facts upon which its validity may be disputed, and then to insist upon these facts as ground of avoidance, is to attempt a fraud. This the courts will neither aid nor presume, but prefer to find there was an intent to waive the known, ground of avoidance.”

The Kansas court of appeals had the question before it in the case of Milwaukee Mechanics’ Ins. Co. v. Brown, 3 Kan. App. 225 (44 Pac. 35). We quote from the syllabus:

“If an insurance agent, knowing that premises sought to be insured are unoccupied, issues a policy of insurance thereon, using the form containing a clause which declares that the policy shall become void in case the premises be or become vacant and unoccupied and so remain for 10 da^s, and if he fails to strike out such clause, the fault being that of the agent, and not of the insured, it operates as a waiver of such conditions on the part of the company, and it will be liable in case of a loss. Held, further, that if, in negotiations between the agent and the assured, no time was definitely fixed within which the premises should be occupied, the policy would continue valid until the company or its agent notified the assured that it elected to cancel the policy and refund the premium.”

The supreme court of Iowa had the question before it in Williams v. Insurance Co., 50 Iowa, 561, and it was there said:

“We have, then, this case: The company, with full knowledge the house was unoccupied, and would be for a time, issues the policy and receives the premium, and then, after a loss occurs, insists it is not bound, and the policy never had a legal existence because said house was vacant. Having issued the policy, taken the premium, and thereby induced the plaintiff to believe she was insured, the defendant is estopped from alleging or proving the policy never had a legal existence. By issuing the policy the defendant waived the conditions as to the occupation of the building, and also that such waiver should be expressed on the policy in writing.”

The States of California and Virginia are in accord with these holdings. See West Coast Lumber Co. v. Insurance Co., 98 Cal. 503 (33 Pac. 258); Georgia Home Ins. Co., v. Kinnier, 28 Grat. (69 Va.) 88.

It may be, as claimed by defendant, that unoccupied buildings, particularly those which do not have fire protection, are a greater hazard than those similarly situated which are occupied; we must so assume upon this record, as uncontradicted testimony to this effect was given upon the trial. While in the view we take of this case it is not controlling, it may be significant that there was no testimony given that a different rate is charged, or, if charged, what the rate would be, or that the rate collected on the policy sued upon did not take such additional hazard into consideration; in other words, there is no testimony on this record that, if a higher rate is charged for unoccupied property, it was not collected in the instant case. The rate collected was the rate fixed by the company, with knowledge that the premises were vacant when the policy was issued.

The loss occurred when the premises were in the same condition, to the knowledge of the company, as when the contract of insurance was entered into; there was no agreement in the policy that the condition of the premises should be changed; under the authorities cited the defendant is liable, and the defense here invoked is not available to it.

It follows that the judgment should be, and it is, affirmed, with costs to plaintiff.

Kuhn, C. J., and Stone, Ostrander, Bird, Moore, Steere, and Brooke, JJ., concurred.