slip attached to the policy. If the "hereinbefore" conditions were not intended to have application, how easy it would have been to have said so bluntly and pointedly-that such conditions shall not apply except so far as they are reiterated upon the slip. The so-called union policies, which have received a settled construction, do this. Syndicate Ins. Co. v. Bohn et al., 65 Fed. 165, 12 C. C. A. 531, 27 L. R. A. 614; Hastings et al. v. Westchester Fire Ins. Co., 73 N. Y. 141; Magoun v. Fireman's Fund Ins. Co., 86 Minn. 486, 91 N. W. 5. The policy not having expressed it in that way, it is incumbent upon the court to seek for another meaning. The slip is made part of the policy, and, being so made part, all the conditions on the policy, contained both upon the back and upon the face of it, together with those contained upon the slip, should be construed together as one entire instrument, and all given effect, if possible; and, when so construed, the plain intendment becomes manifest that it was not designed that there should be one agreement with the insured and another with the mortgagee, or other person having an interest in the property. I am aware of the rule that, if contracts of the kind manifested by policies of insurance contain ambiguous or incongruous conditions, the construction most favorable to the insured should be adopted. I am sure the paragraph in question is ambiguous enough, and why it should be retained and acted upon by men of clear business judgment is a mystery; but the rule does not go to the extent of according to the court a free hand to write into the contract a condition that was plainly never intended by the parties to be there, and such, it seems to me, would be the result of counsel's contention, were it adopted. As a further reason for the construction I have given the policy, it is stipulated at the foot thereof that "this policy is made and accepted subject to the following stipulations and conditions, printed on the back hereof, together with such other provisions, agreements or conditions as may be indorsed hereon or added hereto", so that the plain intendment from the whole contract is that all these conditions, including those contained upon the slip, should be construed together, and harmonized, if possible, and this I have endeavored to do. But, if I am wrong about this, and if the cases last cited are unsound upon principle, I am nevertheless firmly of the opinion that the cases in the state courts cited and relied upon by counsel for plaintiff are without application here, because in the present matter there is no interest existing in the creditor-that is, the Vancouver National Bank-with the consent of the insurance company. In other words, the insurance company has not agreed or stipulated that the bank has any interest, insurable or otherwise, in the property covered by the policy. Loss, if any, is made payable flatly to the bank, and not in so far as its interest may appear. So that in any event the conditions and provisions of insurance relating to such interest cannot apply here, because no such interest exists by agreement of the parties. The bank is simply the appointee of the insured, to receive whatever loss he may sustain by reason of fire from the insurance company, under the conditions of the policy by which insurance was guarantied. The next question involved is whether the contract of sale entered into between George W. Cone Lumber Company and the Oregon Fir Lumber Company rendered the policy void, so that recovery cannot be

had in this action. The contract was made and entered into between George W. Cone, of the first part, and the Oregon Fir Lumber Company, of the second part, and it stipulates that the first party "has and does hereby sell and deliver to said second party all the property hereinafter described upon the following conditions, to wit: The second party is to pay said first party the sum of fifty thousand dollars ($50,000) for said property, twenty-five thousand dollars ($25,000) of which is to be paid for the real estate and twenty-five thousand dollars ($25,000) for all the other property. Said second party is to pay said. first party the sum of ten thousand dollars ($10,000) upon the signing and delivery of this contract and the possession of said property, the receipt of which is hereby acknowledged by said first party. The balance is to be paid as hereinafter set forth. Said first party is to transfer and convey said real estate by a good and sufficient warranty deed and all the other property by a good and sufficient bill of sale."

Then, after describing the property in detail, the contract proceeds: "The first party is to furnish said second party a complete abstract of title to said property showing a perfect title in said first party, which title is to be passed upon and approved by the attorney of said second party. He is also to perfect and complete his title to said property and clear up all taxes and incumbrances against the same except a certain mortgage to E. Quackenbush, on which there is a balance of some fifty-eight hundred dollars ($5,800), and & mortgage held by Georgiana Jackson for one thousand dollars ($1,000). Said first party is to have not to exceed sixty days to complete said abstract and perfect said title and prepare and furnish said warranty deed and bill of sale. When said first party perfects his title and makes and delivers a good and sufficient warranty deed of said real estate and a bill of sale conveying and transferring all of said property to said second party free from all incumbrances except the two mortgages above described, then said second party sto immediately pay said first party the balance of said purchase price of forty thousand dollars ($40,000), after deducting the amount of the mortgages above described therefrom. The said second party is to have full possession and control of said property from this date and is to conduct and carry on said business."

It is contended on the one part that, by virtue of this contract or agreement, a change was effected in the interest and title of the subject of the insurance, and that thereafter the unconditional and sole ownership was not in the George W. Cone Lumber Company, and thus that there was a violation of the stipulations of the policy, rendering it void. This position is challenged as unsound upon the other part. It is a settled rule of law that, under a contract which portends a present sale of realty, an equitable conversion takes place, and that the property will henceforth be treated in legal consequence as if the legal title had actually passed; the most important incident attending such a contract, which may be mentioned, being that the property will descend to the heirs of the vendee, while the purchase money will go to the personal representatives of the vendor. This proceeds under the maxim that "equity regards that as done which ought to have been done." As is said by Mr. Pomeroy in his work on Equity Jurisprudence (section 368):

"The vendee is looked upon and treated as the owner of the land. An equitable estate has vested in him commensurate with that provided for by the contract, whether in fee, for life, or for years. Although the vendor remains owner of the legal estate, he holds it as a trustee for the vendee to whom all

the beneficial interest has passed, having a lien on the land even if in posses sion of the vendee, as security for any unpaid portion of the purchase money." So it is said in Richter v. Selin, 8 Serg. & R. (Pa.) 425, 440: "When a contract is made for the sale of land, equity considers the vendee as the purchaser of the estate sold and the purchaser as a trustee for the vendor for the purchase money. So much is the vendee considered, in contemplation of equity, as actually seised of the estate, that he must bear any loss which may happen to the estate between the agreement and the conveyance: and he will be entitled to any benefit which may accrue to it in the interval. because by the contract he is the owner of the premises to every intent and purpose in equity."

So, also, it is said, in McKechnie v. Sterling, 48 Barb. (N. Y.) 330, 334, where a contract very similar to the one involved here was under discussion:

"The agreement between the parties was therefore a contract for the sale of an interest in land. The defendant was authorized to take immediate possession. The payment of the consideration was to be made upon demand. as no time was fixed for its payment. Strictly, perhaps, the plaintiffs could not have required payment till they tendered an assignment of the lease, and gave the defendant possession. The contract, however, was absolute, and vested in the defendant the equitable interest in the land the moment it was executed and delivered."

And, quoting from Sugden on Vendors, p. 254, the opinion continues:

"That a vendee, being the equitable owner of the estate from the time of the contract of sale, must pay the consideration for it, although the estate itself be destroyed between the agreement and the conveyance; and, on the other hand, he will be entitled to any benefit which may accrue to the estate in the interim."

This much as to the general equitable doctrine.

Coming to the very point in controversy, we quote from Snyder v. Murdock, 51 Mo. 175, 177, as follows:

"After an executory contract for the conveyance of real estate has been entered into by the execution of a bond for title and notes for the purchase money, the property is at the risk of the purchaser. If it burns up, it is his loss. If it increases in value, it is his gain. This is the settled equity doctrine, and is based upon the principle that in equity what is agreed to be done must be considered as done."

So in Dunn v. Yakish, 61 Pac. 926, 10 Okl. 388, a case almost identical in its facts with the one at bar, the court says:

"Does the fact of the insertion into a contract like the present, for the sale of real estate, of an agreement to deliver possession at a future day, make any difference in the application of the rule? It is true it does not appear in the cases cited there were in the contracts any stipulations as to delivery of possession at a future day, nor is this circumstance alluded to; but they explicitly say it is the passing of the title in equity which throws the risk of loss upon the vendee, and entitles him to accruing benefits."

These authorities indicate very conclusively that, when the sale takes place under an agreement of the kind considered, the equitable title passes at once from the vendor to the vendee, which is such a transfer of interest or title as will void the policy under the paragraph relied upon. Indeed, it is explicitly so held in Gibb v. Philadelphia Fire Ins. Co., 59 Minn. 267, 61 N. W. 137, 50 Am. St. Rep. 405.

The question may be considered from another standpoint. It is held in Loventhal v. Home Insurance Co., 112 Ala. 108, 20 South. 419, 33 L. R. A. 258, 57 Am. St. Rep. 17, that:

"A vendee of land in actual possession, exercising acts of ownership under a valid executory contract of purchase, and holding the bond of the vendor to make title upon full payment of the purchase money, a portion of which remains unpaid, is the unconditional and sole owner in fee simple of said land, within the meaning of a policy of insurance which is conditioned that the 'entire policy shall be void if the interest of the insured be other than unconditional and sole ownership, or if the subject of insurance be a building on ground not owned by the insured in fee simple,' and as to an insured holding such interest a policy with this condition is not void, but can be enforced at the suit of the insured."

To the same purpose is the holding of the court in Baker v. State Ins. Co., 31 Or. 41, 45, 48 Pac. 699, 65 Am. St. Rep. 807. See, also, Pennsylvania Fire Ins. Co. v. Hughes, 108 Fed. 497, 47 C. C. A. 459. Now, if it be true that such contract will constitute the vendee the unconditional and sole owner, it must follow unalterably as a corollary that such ownership cannot remain in the vendor, and that the contract itself operates to cause a change to take place in interest, title, and, if possession is delivered, in possession also. There is a line of authorities which, on cursory examination, seem to controvert the position that the loss in case of such a contract as is here entered into, Occurring by reason of the destruction of buildings by fire prior to the ime when it is contemplated that the deed shall be delivered, shall fall upon the vendee. The leading case on that view of the question. is Wells v. Calnan, 107 Mass. 514, 9. Am. Rep. 65, wherein the court

says:

"When property, real or personal, is destroyed by fire, the loss falls upon the Party who is the owner at the time; and if the owner of a house and land Tees to sell and convey it upon the payment of a certain price which the archaser agrees to pay, and before full payment the house is destroyed by dental fire, so that the vendor cannot perform the agreement on his part, Le cannot recover or retain any part of the purchase money."

The principle seems to have been adopted in Powell v. Dayton, Sheridan & Grande Ronde R. R. Co., 12 Or. 488, 8 Pac. 544. The true doctrine of that case, and of others upon which it proceeds, is Placidated in the case of The Tornado, 108 U. S. 342, 2 Sup. Ct. 746, L. Ed. 747. The court there, in quoting from Taylor v. Caldwell, Best & Smith, 826, says:

In contracts in which the performance depends on the continued existfee of a given person or thing, a condition is implied that the impossibility of formance arising from the perishing of the person or thing shall excuse

de performance.'"

And, further, in commenting upon the case of Appleby v. Myers, L. R. 2 C. P. 651, the court continues:

"There the plaintiffs contracted to erect certain machinery on the defendant's premises at specific prices for particular portions, and to keep it in air for two years, the price to be paid upon completion of the whole. After some portions of the work had been finished, and others were in the se of completion, the premises, with all the machinery and materials reon, were destroyed by an accidental fire. It was held that both parties e excused from the further performance of the contract, and that the 153 F.-29

plaintiffs were not entitled to sue in respect of those portions of the work which had been completed, whether the materials used had become the property of the defendant or not."

Then is cited the Wells v. Calnan, 107 Mass. 514, 9 Am. Rep. 65, as authority to that purpose.

So it would appear that, where the parties had in view the continued existence of buildings attached to realty until a conveyance of the legal title is had, then the rule in Wells v. Calnan, 107 Mass. 514, 9 Am. Rep. 65, is applicable. This is elucidated by a further reference to that case, and to a later one from the same court, namely, Allyn v. Allyn, 154 Mass. 570, 28 N. E. 779. In the former the court, by way of distinguishing some authorities referred to, further remarks:

"But in the case at bar the defendant has only agreed to pay the purchase money upon tender of a deed of the whole estate contracted for, including the buildings as well as the land."

And in the latter case, after referring to the contract, the court says:

"In such a state of things no condition can be implied that the performance of the contract is dependent upon the continued existence of the buildings. The reasoning of the cases in which it has been held that both parties were excused from performance by the destruction before a breach of that which constituted an important part of the contract, but concerning whose destruction there was no provision in the contract, does not apply."

However, on the other hand, where the parties are dealing with the property in general, and their contract is for the sale thereof, which is then in existence and capable of delivery or conveyance, the contract works eo instante an equitable conversion, and the parties must be considered as having changed position in reference thereto, and the loss falls accordingly, if there should be any occurring before conveyance.

In discussing the clause of the policy under consideration. the court, in the case of Skinner & Sons' Co. v. Houghton, 92 Md. 68, 93, 48 Atl. 85, 90, 84 Am. St. Rep. 485, says:

"Can it be doubted that there was a change in the interest in this property? As long as the insured has made no change in his estate in the property, a company may be perfectly satisfied to continue the insurance, but, if he makes such a change as to divest himself of all interest in the property, excepting a vendor's lien for the purchase money, and has a responsible party bound for the payment of that, he does not have the same motive for the protection of the property that he had before. In short, the insurer's risk is or may be increased by the change of the interest of the insured."

And so the court concludes that under a policy containing a clause identical with the one here under consideration, having in view a contract of the same nature, it wrought a change of interest in the insured as to the property that would render the policy void.

I have considered the rule thus far as it relates to the realty only, for the sake of perspicuity, and it is only necessary now to add that the same rule will apply, with equal, if not stronger, force, to the personalty. 2 Kent's Commentaries, 492; Commercial Bank v. Davidson, 18 Or. 57, 22 Pac. 517; Morrow v. Delaney, 41 Wis. 149.

Now, it will be seen that the contract is complete for the sale and