American Cent. Ins. Co. v. Donlon

• Decision Date: 13 May 1901
• Parties: AMERICAN CENT. INS. CO. v. DONLON. [1]
• Court: Colorado Court of Appeals

66 P. 249

16 Colo.App. 416

AMERICAN CENT. INS. CO. v. DONLON. ^[1]

Court of Appeals of Colorado

May 13, 1901

Appeal from district court, El Paso county.

Action by T.J. Donlon against the American Central Insurance Company. From a judgment in favor of plaintiff, defendant appeals. Affirmed.

Sylvester G. Williams, for appellant.

H McGarry, for appellee.

GUNTER J.

Appellee sued appellant upon a fire insurance policy, and recovered judgment, from which is this appeal. The facts involved are September 12, 1896, one Dunbar was in possession of lot 27 block A, of Cripple Creek Heights addition to the town of Cripple Creek, and of the building situate thereon. On this date, in consideration of the sum of $250, he conveyed to appellee, Donlon, by quitclaim deed, all his interest in said lot and the improvements thereon. Donlon thereupon took possession, erected an additional building thereon completing it early in January, 1897. January 7, 1897, Donlon, at the solicitation of one Wadsworth, an insurance solicitor, took out a policy in the sum of $700 upon buildings composed of the building purchased of Dunbar and the building erected by himself. Donlon was in possession of the property insured, claiming it as owner, and exercising the rights of ownership over it, when the policy was issued and at the time of its destruction by fire. At the date of the trial, August 22, 1898, he still occupied the lot. When he purchased from Dunbar, Donlon knew that Dunbar could give, as to the lot, only possession, but believed he was acquiring complete ownership of the building. Donlon believed that he owned also the building erected by himself. It further appeared that one Tobin was at all of said times the owner in fee of the lot. Notice was promptly given to the company of the loss, the adjuster of the company visited the premises, appraisers were selected, award reached, and the award repudiated by the company, the adjuster claiming fraud in the proceedings. In June, 1897, proper proof of loss was submitted to the defendant. The defendant company denied any liability. This suit was instituted on September 3, 1897. The appellant contends: (1) That assured had no insurable interest in the insured buildings; (2) that the policy was void, because of a violation of the provision thereof requiring the subject of the insurance to be a building on ground owned by the insured in fee simple; (3) because no appraisement was made of the loss sustained. These embrace the errors urged on oral argument and all substantial questions presented in the assignment of errors. Other errors are assigned, and have been considered, but do not justify a reversal.

1. Had assured an insurable interest? In Travis v. Insurance Co., 32 Mo.App. 206, the policy covered a stock of groceries, the assured being a husband. It was contended that, inasmuch as the stock of groceries was a verbal gift to him by his wife and such gift was void under a Missouri statute, the property remained the wife's, and that, therefore, assured had no insurable interest therein. The court held that an insurable interest existed in the assured, saying: "It may be conceded that the property was the wife's separate property, and that the verbal gift of it by his wife to plaintiff was invalid, but it does not follow that the plaintiff had not an insurable interest in it. The plaintiff had possession of the property claiming it as his own, by virtue of a transfer of it from his wife. If this claim was made in good faith by plaintiff, he had an insurable interest in the property. The fact that the title of the insured to the property is defective, or invalid even, will not deprive him of his insurable interest therein if he is in possession and use thereof under a bona fide claim of title, legal or equitable." In Gilman v. Insurance Co., 81 Me. 488, 17 A. 544, the policy covered certain buildings of which the assured was in possession under a contract for a purchase of the property subject to a condition which had not been complied with, but of which the vendor had taken no advantage at the date the insurance was effected or at the time of the loss. It was contended that no insurable interest existed. The court held the existence of an insurable interest, saying in the course of the opinion: "It may be stated as a general proposition, sustained by all the authorities, that whenever a person will suffer a loss by a destruction of the property he has an insurable interest therein." Both of these cases have been cited with approval by this court. In Helvetia Swiss Fire Ins. Co. v. Edward P. Allis Co., 11 Colo.App. 264, 53 P. 242, the policy ran upon a stamp mill and machinery. There was evidence that assured was the sole owner of at least the machinery; also evidence that he was in possession of the mill building, claiming ownership. It was also in evidence that his right to the mill building was disputed, and that steps were being taken to compel him to surrender it. This court approved the finding of the jury that an insurable interest existed. In Insurance Co. v. Chase, 5 Wall. 512, 18 L.Ed. 526, the court thus states the reason for requiring the presence of an insurable interest: "The assured must, therefore, have an interest in the property insured, otherwise there is a temptation to destroy it, which a sound policy condemns." It is reasonable to conclude that Donlon, in purchasing the building from Dunbar, of which Dunbar had for months been in possession, believed he was becoming the owner of the building purchased. It is reasonable to conclude that in constructing a second building upon the premises at a cost to him of several hundred dollars he believed himself the owner of this building. Assured was in actual possession of the insured building when the policy was written and at the time of the loss. At the trial of this case--nearly two years after he originally went into possession--he was still in the possession of the lot. When the...