6 So. 2d 513 | Ala. | 1941
Lead Opinion
The appeal challenged the action of the trial court in entering a judgment for the plaintiff, or in failing or refusing to find the facts with reference to the ownership of the insured's property and plaintiff's interest therein, during the term of the policy sued on.
It is well established that in a proper case the appellate court should review the trial court on the sufficiency and correctness of its finding of facts. Shaw v. Knight,
The law as to violation of contract clauses of policies of insurance as to insurable interests of assured was fully considered and authorities collected in Girard Fire Marine Ins. Co. v. Gunn,
After a careful examination of the matter before us, we are of the opinion that the order and judgment aforesaid is not in accord with the law having application to the facts as we understand them.
The evidence is uncontroverted that the land belonged to Sloss-Sheffield Steel Iron Company. It was by the latter leased to Mott Bradley, with condition for cancellation that it could not be sublet without written permission. There was no provision in the lease with reference to placing improvements thereon. It followed that such permanent improvements placed on the land became a part of the freehold and thereby became the property of the original owner and lessor.
Contrary to the provisions of his lease, Mott Bradley subleased the property to E. B. Flippo, who erected the building, sought to be insured, on the land. The lease from Mott Bradley to Flippo provided that the improvements could be removed by Flippo. A joint agreement was made between Mott Bradley, E. B. Flippo and Letha Yalock, and by this agreement, Flippo sold the building to Mrs. Yalock and sublet to her.
The appellee Raper contends that he bought out Mrs. Yalock's interest. The evidence shows that actually he was buying it to start with in the name of Mrs. Yalock. It is not necessary to determine which was the fact, as in our opinion, it is immaterial as to which is true.
There is no evidence to show that the Sloss-Sheffield Steel Iron Company ratified such agreement as to this or ever knew of its existence.
In addition to this, prior to this fire, the lease between Sloss-Sheffield Steel Iron Company and Mott Bradley was cancelled by mutual consent, on October 17, 1939, and a new lease was made by Sloss-Sheffield Steel Iron Company to J. W. Nelson and J. W. Howell. The property insured burned on January 4, 1940.
On these uncontradicted facts, plaintiff, if he had an interest at all, is merely a trespasser or tenant by sufferance. That is to say that plaintiff had no right which he could enforce so far as the building was concerned and could have been ousted at any time. He did not even have the right of possession except as a squatter or trespasser would have.
The law is clear that a person with no interest in the land other than that of a tenant by sufferance, or a squatter, or a trespasser, has no insurable interest in the property. This matter was expressly decided in the case of Royal Exchange Assur. of London, England v. Almon,
"Did the plaintiff have an insurable interest in the barn? If not, then the policy would be void as to the barn; it being repugnant to public policy to allow one person to insure the property of another for his benefit.
* * * * *
"The barn belonged to the wife; possession alone was in the husband, the plaintiff. Just bare possession of the barn with no facts averred except being the husband, to show right of possession and use of the barn, is not sufficient interest in the barn by plaintiff to be insured. It is not an insurable interest."
To the same effect was the decision in Girard Fire Marine Ins. Co. v. Gunn,
In addition thereto this court held in Pope v. Glenn Falls Ins. Co.,
See, also, American Equitable Assur. Co. v. Powderly Coal
Lumber Co.,
In the case of Ward v. Concordia Fire Ins. Co.,
In the instant case, plaintiff claims that he acquired his rights from Mrs. Yalock, who in turn acquired whatever rights she had from Flippo, who in turn acquired whatever rights he had from Mott Bradley. The evidence shows that Mott Bradley had no right whatever in and to said property. The only rights that Bradley had were acquired by virtue of a written lease which he had with the Sloss-Sheffield Steel Iron Company. In this lease there was no provision that any improvements could be removed at the expiration of the lease. The rule on this proposition was declared in Farmers Merchants Bank v. Sawyer et al.,
The evidence shows the lack of an insurable interest and this cannot be waived. American Equitable Assurance Co. v. Powderly Coal Lumber Co.,
Moreover, the provisions of the policy with reference to occupancy were violated. The policy stipulated as follows:
"* * * In Consideration of the Stipulations Herein Named and of Thirty-Six and No/100 __________ Dollars Premium does insure A. R. Raper, Russellville, Alabama, for the term of one year from the 6th day of March, 1939, at noon to the 6th day of March, 1940 at noon against all direct loss or damage by fire, except as hereinafter provided, to an amount not exceeding Twelve Hundred and no/100 __________ Dollars, to the following described property while located and contained as described herein, and not elsewhere, towit:
Ala., N.C. Mercantile Building Form No. 110 (Three-fourths Value (Revised 5-30) Clause)
$700.00 On the one story, frame building, with Metal roof, only while occupied by Owner as Filling Stat. Dwelling Store and not for other purpose situated 2 Miles from Russellville, Ala.on the west side of North Jackson Highway
$XXX On Store Furniture, and Fixtures, including Iron Safes and Cash Registers, only while contained in the above described building.
$500.00 On Household Goods Furniture while contained in theabove described building. * * *."
The contract provision is that all the property was insured while occupied by the owner as a dwelling house and store.
The uncontradicted evidence is that the plaintiff never occupied the store, but that for some time it was occupied by Mrs. Letha Yalock, a friend of plaintiff, for whom plaintiff was buying all of the household equipment and other articles needed by her. That is to say, the evidence shows beyond a doubt that Mrs. Yalock was a friend of plaintiff, Raper, and lived in the building as such for a time; that about a month before the fire Mrs. Yalock became ill and moved and plaintiff then leased the building to one Ocie Kellar for a rental of $5 per month, and said Ocie was occupying the property at the time of the fire. *444
This constitutes a violation of the policy and defeats any recovery thereon under well-considered cases, as we will indicate.
The law on this proposition was declared in Home Ins. Co. v. Currie et al. 5 Cir.,
The law was also declared by the New York Supreme Court in the case of Grady v. Concordia Fire Insurance Co.,
The above rule was also referred to by our court in the case of Camden Fire Ins. Ass'n v. Landrum,
"It seems to be recognized that an insurance risk upon a building 'occupied as a dwelling' is a warranty that the building is occupied, and, if unoccupied, the policy is void. Boyd v. Vanderbilt Ins. Co.,
"Some authorities hold a contractual stipulation that the dwelling is occupied by the owner is a warranty which renders the insurance void, if occupied by a tenant. Home Ins. Co. v. Currie [5 Cir.],
"Without committing ourselves to this latter statement, and limiting our decision to cases of the class before us, we are convinced that a warranty or representation that the dwelling is occupied by a tenant, when in fact it is occupied by another claiming in his or her own possessory right, hostile to any possessory right claimed by the insured, is material, and affects the risk of loss by an insurer."
The above-quoted authorities are applicable to the case at bar. The property was insured only while occupied by owner as a dwelling and store. This is a matter of coverage. At the time of the fire it was not occupied by owner either as a dwelling or a store but by one Ocie Kellar, as a tenant, who was paying the nominal rental of $5 per month. Whether this is construed to be a breach of warranty or a question of coverage, the policy was violated and plaintiff cannot recover. There is no question of waiver on this proposition, as there was no evidence introduced to show any notice or knowledge on defendant's part as to how the building was occupied or used, other than as contained in the policy issued by defendant.
It is further declared by this and other courts that the coverage cannot be enlarged by waiver or estoppel. Home Ins. Co. v. Scharnagel,
Of this, Mr. Justice Knight, has observed in Home Ins. Co. v. Campbell Motor Co., supra, that: "* * * Waiver or estoppel can only have a field of operation when the subject-matter is within the terms of the contract. No one, we assume, would argue that a policy of insurance, which protected one against loss by fire, could be extended or broadened, by the application of the principle of waiver or estoppel, to cover loss by cyclone. The effect, in such a case, would be to create a new contract, without a new consideration. Great Am. Ins. Co. v. Dover,
As to the personal property item, the uncontradicted evidence shows that a large part was purchased under retention of title contracts, and was not paid for at the time of the fire. Both Mrs. Yalock and plaintiff Raper admitted that they purchased the personal property on retention of title contracts, and said contracts were also offered in evidence.
Under this state of the evidence, plaintiff was not the sole and unconditional owner of the property and the policy was violated as to the personal property for this reason. The rule on this phase of the case was clearly declared in National Liberty Ins. Co. of America v. Spharler et al.,
The same rule was declared in Mishiloff v. American Cent. Ins. Co.,
In Virginia Fire Marine Ins. Co. v. Lennon et ux.,
"The sales contract in the instant case not only provides that title and right of property in the furniture in question shall remain in the vendor, but that, in the event that the vendee fails to pay the purchase price or any installment thereof as provided, the vendor shall have immediate right to take possession of same, and the vendor also retains the right to repossess if the furniture is removed from the residence then occupied by vendee. The possession of vendor is thus qualified, and the ownership is conditioned upon full payment of the purchase price. There is only one characteristic of ownership here, viz., the right to use the furniture, and that was restricted to the premises then occupied by vendee. This contract is to all intents and purposes identical with the contract referred to in Harkness v. Russell [ Co.], supra [
"So, while it may very well be, as between the vendor and vendee, a conditional sale *446 contract, when the property is destroyed, will not relieve the vendee from the payment of the purchase money, yet as between the purchaser of property and an insurer, who contracts with the purchaser upon the express stipulation that the interest of the purchaser shall be unconditional and sole ownership, the existence of a conditional sales contract, without the knowledge of the insurer, would render the policy void.
"To hold otherwise under the conditions of the contract above set out would be to totally disregard the plain meaning of ordinary English. One whose ownership and interest in property are dependent upon his performance of an act which has not been performed cannot be said to be in unconditional ownership. If this is not conditional ownership, then there is no such thing as conditional ownership. The unconditional and sole ownership clause in an insurance policy is aimed at just such ownership. * * *"
And the general rule is in accord with the above-quoted decision that a vendee of chattels, under a conditional sale contract, is not the "sole and unconditional owner" within a policy of insurance thereon, making it void in the absence of such ownership. The rule has been adhered to in Arkansas, Connecticut, District of Columbia, Indiana, Maryland, Massachusetts, Ohio, Oklahoma, Rhode Island, Washington, Wisconsin, as well as in our own state.
The rule on this proposition was declared by the court in Superior Fire Ins. Co. v. Whelchel,
It results therefore that the order of the circuit court from which this appeal is taken is reversed and one here entered in behalf of appellant, the Fidelity Phenix Fire Insurance Company of New York.
Reversed and rendered.
GARDNER, C. J., and BROWN and LIVINGSTON, JJ., concur in result on the last proposition.
Addendum
This case was put on rehearing by the writer when it was discovered that some of my brothers were doubtful about the seventh headnote, contained in the printed opinion (Fidelity Phenix Fire Ins. Co. of New York v. Raper), and which is a correct statement of the opinion to that effect rendered on original hearing.
The basis of that holding was the cases of National Liberty Ins. Co. of America v. Spharler et al.,
The annotations of the Virginia case, supra, contain a note by the editor that the general rule throughout the courts is that announced in the Virginia case to the effect that a vendee of chattels under a conditional sale contract is not the sole and unconditional owner thereof within a policy of insurance thereon making it void in the absence of such ownership. This is the effect of Brown v. Commercial Fire Ins. Co.,
In Brown v. Commercial Fire Ins. Co.,
In Aetna Ins. Co. v. Kacharos,
The Kacharos case, supra, was dealing with the effect of the right of redemption that had not expired at the time of the issuance of the policy of insurance, and not a conditional sales contract as here under consideration.
It will be noted that the terms of the policy thus dealt with in the last cited authority are materially different from those contained in the instant policy.
In addition to the provisions of the policy set out in the original opinion are the further conditions: "It is understood and agreed * * * that, the three-fourth value clause, * * * the electric light, heat and power permit, * * * the standard time clause * * *, the powder and kerosene permit * * *, the lightning and electrical apparatus clause * * *", are made a part thereof and further that "this entire policy shall be void if the insured has concealed or misrepresented, in writing or otherwise, any material fact or circumstance concerning this insurance or the subject thereof; or if the interest of the insured in the property be not truly stated herein; * * * or if the interest of the insured be other than unconditional and sole ownership; or if the subject of insurance be personal property and be or become incumbered by a chattel mortgage; * * * or if any change, other than by the death of an insured, take place in the interest, title, or possession of the subject of insurance (except change of occupants without increase of hazard) whether by legal process or judgment or by voluntary act of the insured, or otherwise; * * *."
On the original hearing and now we treated the conditional sale contract of the personal properties in question placed in the house with other properties belonging to Mrs. Yalock as property under a chattel mortgage. The evidence shows that these purchases were made by Mrs. Yalock and she said that she conveyed her interest in such to the assured Raper. The evidence fails to show any such transfer was made to Raper either before or after the issuance of the policy and further fails to show that defendant company or its agent had any knowledge of such condition of the title.
The writer was and is now of the opinion that the rule announced in Loventhal v. Home Ins. Co.,
In Gunn v. Palatine Ins. Co., Ltd., of London, England,
"The case of Loventhal v. Home Ins. Co.,
" 'This provision of the policy does not necessarily distinguish between the legal and the equitable estate. If the title is conditional or contingent, if it is for years only, or for life, or in common, it is not the entire, unconditional and sole ownership; but, whether the title be legal or equitable, the interest of the assured is the same, so far as it affects the contract of insurance. The purpose of the provision is to prevent *448 a party who had an undivided or contingent, but insurable, interest in property, from appropriating to his own use the proceeds of a policy, taken upon the valuation of the entire and unconditional title, as if he were the sole owner, and to remove him from the temptation to perpetrate fraud and crime; for without this a person might thus be enabled to exceed the measure of an actual indemnity.'
"The recent case of New Brunswick Fire Ins. Co. v. Nichols,
In Girard Fire Marine Ins. Co. et al. v. Gunn,
"In view of the positive pronouncements made by this court in Gunn v. Palatine Ins. Co. et al.,
The decisions of this court upon the question of whether or not a conditional purchaser of property is a sole and unconditional owner in fee simple within the terms of an insurance policy have been with reference to real estate. The rule adopted by the majority of courts is that a vendee of chattels under a conditional sales contract whereby the vendor reserves title to himself until the payment of the purchase price in full is not the sole and unconditional owner within the meaning of a policy requiring such ownership; "and this is the rule notwithstanding delivery of possession to the vendee and part payment by him." 29 Am.Jur. p. 490, § 606.
This is the first time this question seems to have been presented in this state with reference to conditional purchase of chattels. It is particularly to be emphasized for the reason that it is recognized in this state that a conditional seller of chattels shall sustain all loss with respect to them by fire or otherwise.
In Perkins v. Skates et al.,
To the same effect are the cases of Bishop v. Minderhout,
It results that the views expressed in the seventh headnote of the opinion having reference to a conditional purchase of chattels and not of real estate were correct.
Application for rehearing overruled.
All the Justices concur, except KNIGHT, J., not sitting.
