Republic Ins. Co. v. Hoyle , 1928 Tex. App. LEXIS 370 ( 1928 )

The propositions of the appellant present, in effect, the points in view, namely: (1) The policy was void under its terms from its inception, in that, at the time the policy was issued, the interest of R. C. Boyle in the property insured was not "other than unconditional and sole ownership." (2) The intervener was not entitled to recover in any event, in that she was not made a beneficiary by express provision, and the element of privity of contract was otherwise absent.

If the appellant be liable at all on the policy, the second point above may not be available in the facts. It is admittedly shown that the policy was assigned to J. F. Hoyle on April 29, before the fire. The assignment was indorsed on the policy. Thus the policy stood in the name of J. F. Hoyle by actual transfer, with the assent of appellant's agent, who was authorized to agree to such assignment. The intervention of Mrs. Hoyle, joined therein by her husband, was in legal effect purely a claim by her against J. F. Hoyle, the assignee, to the extent of $2,000, upon the facts alleged, in the event such assignee recovered on the policy. Her claim was not in the nature of a suit on the policy directly against the appellant. Under her pleading, any recovery by her against the assignee was entirely dependent upon the recovery on the policy by the assignee. If the assignee should fail of recovery, then the intervener likewise would fail of recovery. In such character of controversy it was of no legal concern to the insurance company as to whether the assignee or the intervener, as between themselves, should be awarded the sum payable under the policy, provided the appellant would be legally protected thereby. All the parties having any interest or claim whatever being before the court, they would be concluded by the judgment rendered, and the appellant would be legally protected thereby. J. F. Hoyle, as original plaintiff, had the right to bring the suit, and could maintain it against appellant, if the appellant were liable at all on the policy, because he had an interest in the protection of his outstanding note to Fleming, in the insurance, as assignee with knowledge and assent of appellant. Also the appellant may not avoid liability on the policy merely because of the conveyance to J. F. Hoyle by R. C. Hoyle and wife, as from the plain evidence the appellant was estopped from asserting such defense by reason of its knowledge and conduct through its agent.

As to the first point, the evidence is undisputed that the realty was purchased partly with the separate money of Mrs. Hoyle and partly with community money, and the building was upon the realty at the time of the purchase. The policy covered the one item of the building, and there was no personal property involved. The policy expressly provided that the interest of R. C. Hoyle, the assured, in the insured property should be that of "unconditional and sole ownership," or otherwise the policy would "be void" or ineffectual at its inception. It is believed that the facts in the instant case bring it within the ruling in German Ins. Co. v. Hunter (Tex.Civ.App.) 32 S.W. 344. In that case the property insured was a house situated upon realty purchased partly with separate funds of the wife and partly with community funds. The deed, as well as the insurance, was taken in the name of the wife. The wife brought suit on the policy, alleging that the property was her "separate property." It was determined upon appeal that "the allegation that the property was the separate property of Mrs. Hunter is not sustained," and "she could not, in this case, recover upon the allegation that it was her separate property." Although the ruling was not made in precise words that the sole and unconditional ownership clause was broken, yet, in meaning and effect, it was a direct ruling that, as the interest of the wife in the property was not that of sole and unconditional ownership, she could not maintain a suit on the policy, although joined pro forma by the husband. The ruling would be the same, and not different, whether, as in that case, the deed was in the name of the wife, or, as in the case at bar, the deed was in the name of the husband.

That ruling is not at variance, but consisttent, with Crescent Ins. Co. v. Camp, 71 Tex. 503, 9 S.W. 473, to the point that a surviving partner cannot insure the firm's property under the sole and unconditional ownership clause of the policy. The mere fact that the house in the case at bar was used and occupied as "a family residence" would not be controlling, according to Sun Office Ins. v. Beneke (Tex.Civ.App.)53 S.W. 99. In that case the insurance was in the name of the wife. The building was located upon the separate property of the wife, and was used and occupied as the family residence of the husband, wife, and children. The point was directly made that the sole and unconditional ownership clause was broken because of the marital relation and the use and occupancy of the building as "a family residence." The court held to the contrary, giving as the reason therefor that in the facts the husband "was in no sense a partner in the ownership," and his right of control and management of the family residence "would not affect the singleness of her ownership." Also see Bacot v. Ins. Co., 96 Miss. 223, 50 So. 729, 25 L.R.A. (N. S.) 1226, Ann.Cas. 1912B, 262. A similar ruling was made in St. Paul Fire Marine Ins. Co. v. McQuary (Tex.Civ.App.) 194 S.W. 491.

In the Beneke Case there was distinguishment made between that case and Warren v. Ins. Co., 13 Tex. Civ. App. 466, 35 S.W. 810, and East Texas Fire Ins. Co. v. Crawford (Tex. Sup.) 16 S.W. 1069, each involving "homestead" and family residence. In the Crawford Case the house and 200 acres on which it stood, part of a 400-acre community tract, was the homestead of the husband at the time of the insurance and prior thereto at the time of the death of his wife. It was held that the sole and unconditional ownership clause was not broken, in view of the fact that the husband had the legal right, after the death of the wife, to reside upon and use the whole of the 200 acres as homestead unconditionally as long as he lived. That ruling related entirely to community property and the rights of the husband therein under the law. According to the Warren Case, based on the Crawford Case, the house was built by the husband, after marriage, upon realty of the wife, acquired before her marriage. But, as the house was built after marriage, and wholly paid for with community funds, the court held the sole and unconditional ownership clause was not broken. The legal reason for the ruling was that the community was entitled to be reimbursed for the improvement to the value of the house, and the husband, having under the law the absolute control and disposition of the community, had an insurable interest in the dwelling house to the full amount of its value. The loss of the house was a loss directly to the community estate, over which the husband had absolute control and management. The fund arising from the policy would occupy the same status which the house did; that is, community property. In other words, the family residence was "wholly community property," and the husband alone had the legal right to insure it against loss by fire. The facts in these cases are clearly quite different from those in the instant case. Thus, as appears, it is the holding of the cases in this state that the sole and unconditional ownership clause of the policy is broken, if the husband alone insures the family residence located upon separate property of the wife or located upon realty paid for partly by separate funds of the wife and partly by community funds. The husband alone may insure the family residence without violating such clause, if located upon his separate realty or entirely upon community realty, or if the family residence be paid for wholly out of community funds, although located upon the separate property of the wife.

A different ruling is not made in Continental Fire Ass'n v. Wingfield,32 Tex. Civ. App. 194, 73 S.W. 847, nor was the point determined in that case similar to the point at bar. In that case the point made was merely that in the facts the insured "had no insurable interest" in the property. The court held that the point was not well taken, as in the facts the husband did have such an interest as he could protect by insurance. It was not held, nor undertaken to be held, that the "sole and conditional ownership" clause was not broken. That the assured, in an action on the policy, must allege and prove an insurable interest in the property insured may be regarded as settled. He may have an insurable interest less than ownership. 1 Wood, Insurance, § 281, p. 645. And, if the policy does not expressly require "unconditional and sole ownership" by the insured, he may not be held to have broken such clause by an interest less than that. In the Wingfield Case, supra, that insistence was not made and urged. Therefore such case is not in conflict with any of the other cases referred to above.

The cases further cited of Georgia Home Ins. Co. v. Brady (Tex.Civ.App.) 41 S.W. 513, and Merchants' Ins. Co. v. Dwyer, 1 Posey, Unrep. Cas. 441, are not comparable to the present facts. Personal property alone was involved in those cases, and the ruling therein was rested upon the right of the husband under the law to the sole management and control of the wife's separate personalty and as well the community. The statute was held specially controlling concerning the nature of such estate and the husband's control thereof.

Estoppel on the part of the appellant to assert against the insured his breach of the sole and unconditional ownership clause may not be made available in the present case. There is no pretense of evidence that the agent of appellant had notice or information of the fact of Mrs. Hoyle's separate money having paid the most part of the purchase price of the land. The deed did not so disclose, and the agent positively says he did not know of that fact. Mr. Hoyle does not testify that he told the agent about it. And, therefore, the appellant would not be precluded from availing itself of the defense against the assignee of the violation of such clause of the policy by the original insured, because the assignee was not, as admitted by all parties, in fact and intention, a real purchaser and owner of the insured property. In such circumstances, the assignee was subject to the same defenses as the assignor. There was no issue of fact to be determined by the jury, as correctly held by the trial court.

The judgment is reversed, and judgment is here rendered for the appellant, with all costs of appeal and of the trial court.