ENCUMBRANCES   637

policy has a clause against other insurance which adds the words "whether valid or not" to the original clause in order to remove all doubts as to the meaning of the policy, but New York had already refused to sustain the contention that an invalid policy might be ignored.

We may assume that the chattel mortgage is void as matter of law. Sabine v. Paine, 223 N. Y. 401, 119 N. E. 849, 5 A. L. R. 1144. It may, if enforcement is resisted, lack legal efficacy, but it exists as a fact and has moral efficacy in point of fact. The reason for requiring knowledge or notice of the chattel mortgage is the same as the reason for requiring knowledge of other insurance. The facts relating to both are important to the insurance companies as bearing on the risk assumed. Property incumbered by a chattel mortgage may cease to be good moral risk. That the necessities or the ignorance of the insured have forced him into the hands of the usurer does not make the information sought a matter of indifference to the insurer, but rather the contrary. The fair meaning of the stipulations of the parties called for full disclosure by the insured.

In Forward v. Continental Insurance Co., 142 N. Y. 382, 390, 37 N. E. 615, 25 L. R. A. 637, it is held that a mere paper transfer of title, not intended to transfer ownership, did not avoid a policy of insurance, void "if the interest of the insured be other than unconditional, sole ownership," six judges agreeing that "the moral hazard which was the basis of the condition of the policy would still be absent." But the moral hazard is the test by which the terms of the policy are to be construed.

To paraphrase the language of Andrews, J., in Landers v. Water-town Fire Insurance Co., 86 N. Y. 414, 417, the condition in defend-ant's policy was inserted to protect it from the hazard of insuring mortgaged property and the existence of the chattel mortgage was a breach of the condition."

The judgment appealed from should be affirmed, with costs. COLLIN, J. (dissenting). * * *

The parties in the instant case stipulated that if the insured property was incumbered by a chattel mortgage at the issuance of the policy the policy should be void. Such is the practical effect and operation of the stipulation under the facts of the case. Whether or not the property was incumbered by the chattel mortgages is the ultimate and determinative questions we are to answer. If it was not the plaintiff might lawfully regard the instruments as effectless and mere nothings. The difference between a chattel mortgage in mere words and a valid, effectual incumbering by a chattel mortgage is indicated by the stipulation; it is the difference between the impotent instrument and the object sought by it. In this state a chattel mortgage incumbers property only by effecting a present transfer to the mortgagee of the property mortgaged by