#### Hogue, Respondent, vs. The Farmers’ Mutual Fire Insurance Company of Sparta, Appellant.

*February 3*

February *24, 1903.*

*Fire insurance: Forfeiture: Incumbrance of property: hand contract: Surrender by vendee: Statute of frauds,*

1. Sec. 2302, Stats. 1898, provides that an interest in land cannot he surrendered otherwise than hy act or operation of law, or hy deed or conveyance in writing, subscribed hy the party creating, granting, assigning, surrendering or declaring the same, or hy his lawful agent thereunto authorized hy writing. *Held,*that a surrender of a land contract hy the vendee to the vendor, and acceptance thereof, coupled with an intention hy both parties to extinguish the vendee’s equity, satisfies the statute.

2. A vendee under a land contract was insured against fire hy a policy providing that all the rights of the insured under it should he forfeited if the insured incumbered the property involved, subsequent to the application for the policy, without notice thereof to the insurance company. Thereafter the fee was conveyed hy the vendor, and a new contract made between the vendee and the new owner of the fee, which called for the payment of the unpaid purchase money, hack taxes, and unpaid interest. Subsequently, hy agreement between the vendee, the new owner of the fee, and plaintiff, the second land con*657tract was surrendered, and a new land contract was made whereby tbe land was contracted to be conveyed and tbe insurance policy assigned to tbe plaintiff. Tbe court found that tbis was done to secure a debt owing from vendee to tbe plaintiff. *Held,*that tbe transactions amounted to an incum-brance of tbe property, and rendered tbe policy void.

Appeal from a judgment of tbe circuit court for Monroe county: J. J. Pbuit, Circuit Judge.

*Reversed.*

Tbe questions at issue included tbis: Was tbe provision of tbe insurance contract, rendering it void if tbe assured, at any time after tbe date of tbe application, incumbered tbe property in addition to tbe incumbrances tbereon mentioned in sucb application, satisfied, so as to make sucb provision operative ? Tbe nature of tbe title of tbe assured and tbe facts as to sucb question, by tbe undisputed evidence, were as follows: James Hall took out tbe policy of insurance. He died prior to tbe commencement of tbis aetion. His title was that of vendee under a land contract. Tbe vendor was John Yanness. Tbe amount unpaid on tbe contract was $800. Tbe vendee’s interest in tbe property was further incumbered by a mortgage of $200 when be applied for tbe policy. He stated in bis application that tbe property was incumbered to tbe amount of $1,000. Tbe policy was for $250 and was for tbe term of five years from and after March 2, 1895. It contained a provision to tbe effect that it would become void if tbe assured should incumber tbe property in addition to tbe incumbrances mentioned in tbe application, at any time after tbe date thereof, without notice to tbe company. Yanness conveyed tbe legal title to tbe property to Phillip McConnell. On or prior to May 24, 1899, a new contract was made between McConnell and Hall, which they intended should supersede tbe one between Hall and Yanness. Under sucb new contract Hall became tbe vendee of McConnell, tbe amount to' be paid for tbe property being $1,300, which sum, so far as-appears from tbe evidence, was intended to coyer. all out*658'standing incumbrances upon Hall’s interest in tbe land, tbe $800 unpaid on tbe old contract, tbe $200 mortgage indebtedness to plaintiff, and some back taxes and past-due interest. (There was some dispute as to whether it did not include other indebtedness.) Hall was an old man. Subsequent to tbe making of tbe new contract be went to live at tbe home of plaintiff and bis wife, and, after incurring some indebtedness to them, for tbe purpose of securing tbe payment thereof, and also securing them for services in caring for him thereafter, be turned over to them bis interest in tbe property in question, and tbe insurance, in this wise: Tbe parties, together with McConnell, having met for tbe purposes of tbe transaction, it was agreed that -the contract between McConnell and Hall should be surrendered and that McConnell should make a new contract to plaintiff and bis wife. That agreement was carried out. Tbe consideration mentioned in tbe new contract was $1,843. There was nothing in tbe written evidence of tbe transaction showing that it was otherwise than an absolute transfer of Hall’s interest in tbe land to plaintiff and bis wife. Tbe new contract was delivered to plaintiff, and tbe old one to McConnell, and tbe insurance policy, with an assignment thereof, was delivered to McConnell. There was a dispute as to whether Hall’s interest was transferred as security or absolutely. Tbe court found on that as follows: ■

“Hall, for tbe purpose of securing said plaintiff for a debt be then owed this plaintiff, and in contemplation of further indebtedness, did cause to be assigned to this plaintiff bis interest in tbe land upon which said dwelling bouse was situated, to bold until said Hall should-pay or cause to be paid bis said indebtedness to tbe said *Iiogue,*tbe plaintiff.”

In tbe transaction mentioned Hall did not sign any papers, but tbe purpose of the transaction, understood by all parties thereto, was to substitute a contract between McConnell and plaintiff and bis wife for tbe one between McConnell and Hall. Tbe insurance company was not notified of tbe trans*659action before tbe loss occurred. Tbe property was destroyed by fire September 14, 1899. All tbe provisions of tbe policy ■as to proceedings subsequent to tbe loss, on tbe part of tbe assured, were complied witb. Defendant denied all liability under tbe policy. Tbe court decided that plaintiff was entitled to recover tbe full amount of tbe insurance. Judgment was rendered accordingly.

Eor tbe appellant there was a brief by *'Masters &*Hraves, and oral argument by O. *M. Masters.*

*0. L.*Hood, for tbe respondent.

Maeshall, J.

We bave here an action on an insurance •contract wbicb unequivocally provided that all rights of tbe assured under it should be forfeited if tbe insured incumbered tbe property involved subsequent to tbe application for tbe policy without notice thereof to tbe insurance company; the undisputed fact, and distinct finding of tbe court accordingly, that tbe property was so incumbered; no evidence of •any fact nor any finding showing a waiver of tbe consequent forfeiture; and yet a judgment that tbe policy contract was binding upon tbe insurer in face of its insistence upon tbe benefit of tbe stipulated forfeiture. Tbe mere statement of tbe situation, it would seem, is all that need be said for an opinion upon wbicb to base a decision reversing tbe judgment.

We are unable to understand from tbe record, or very dearly from tbe argument of tbe learned counsel for respondent, by what course of reasoning tbe learned court reached tbe conclusion complained of. It is suggested that it may be justified upon tbe theory that Hall’s contract witb Vanness was never manually surrendered, nor by any writing, and that since be did not join in tbe contract witb plaintiff by ■signing tbe same, or by some writing, be did not incumber bis interest in tbe property by tbe transaction witb plaintiff within tbe meaning of tbe policy. Tbe further suggestion is *660made that the mere giving of a bond for a deed, by tbe owner of land, agreeing to- convey tbe same upon payment of tbe purchase money, is not an incumbering of property within tbe meaning of tbe policy. We will give such attention to both of such propositions as they seem to merit.

True, tbe right of a vendee of land under a land contract is an interest in land *(Richardson v. Johnsen,*41 Wis. 100), and true, also, such interest in land cannot be surrendered otherwise than by “act or operation of law or by deed or conveyance in writing, subscribed by tbe party creating, granting, assigning, surrendering or declaring tbe same or by bis lawful agent thereunto authorized by writing.” Sec. 2302, Stats. 1898. But that is satisfied by a surrender of tbe contract to the vendor and *the*acceptance thereof, coupled with an intention by both parties to tbe transaction to extinguish tbe vendee’s equity under tbe contract *(Hutchins v. Da Costa,*88 Wis. 371—375, 60 N. W. 427), or by tbe doing of any other act or acts by tbe vendee inconsistent with tbe continuance of bis interest in tbe land under bis contract, accepted by tbe bolder of tbe legal title with that view, coupled with acts on tbe latter’s part upon tbe faith thereof, mailing operative tbe doctrine of estoppel *in pais. O'Donnell v. Brand,*85 Wis. 101, 55 N. W. 154; *Hutchins v. Da Costa, supra; Goldsmith v. Darling,*92 Wis. 363, 66 N. W. 397; *Lovejoy v. McCarty,*94 Wis. 341, 68 N. W. 1003; *Slaughter v. Bernards,*97 Wis. 184, 72 N. W. 977. Under that rule there can be no doubt that Hall’s dealing with McConnell, after tbe latter became possessed of tbe legal title to tbe land, whereby be accepted from tbe latter a new contract for tbe one with Vanness, such new contract including tbe purchase money to be paid, tbe amount unpaid upon tbe old contract, tbe transaction being recognized by both parties thereafter as evidencing their relative rights in tbe land, operated as a surrender by Ball to McConnell of bis interest under tbe Yanness contract, by operation of law. Tbe same ride ap*661plies to tbe transaction in wbicb tbe contract was made between McConnell and plaintiff and bis wife. Tbe surrender by Hall of bis contract witb McConnell to tbe latter, bis acceptance thereof and reliance tbereon in making tbe new contract witb plaintiff and bis wife at Hall’s request for tbe purpose of placing tbe latter’s interest under tbe control of tbe new vendees as security, by operation of law extinguished tbe old contract and tbe vendee’s interest it stood for, so far as necessary, to effectuate tbe intention of tbe parties to tbe transaction.

Tbe idea advanced that tbe giving of a bond for a deed by tbe owner of land to another is not an incumbering of land within tbe meaning of tbe clause of an insurance contract such as tbe one we have under consideration in this case, does not appear to be material, even if good law. Here tbe assured did not merely give a bond to convey bis interest to plaintiff. He in fact, a.s tbe court found, joined in a transáction for tbe purpose of conveying, and which effectually conveyed, all bis right, title and interest in tbe property covered by tbe insurance policy to tbe plaintiff and bis wife as security. It hardly admits of serious discussion that such transaction incumbered tbe property in addition to tbe incumbrances tbereon specified in tbe application for tbe insurance. As we read tbe finding of the trial court, it is to that effect, and clearly should have been followed by a conclusion of law that tbe defendant was entitled to judgment dismissing tbe complaint witb costs.

*By the Court.*— Tbe judgment of tbe circuit court is reversed and the cause remanded witb directions to dismiss tbe complaint witb costs.