Boston Ins. Co. v. Beckett

• Decision Date: 24 October 1966
• Docket Number: No. 9790,9790
• Citation: 91 Idaho 220,419 P.2d 475
• Parties: BOSTON INSURANCE CO. (Mass.), foreign corporation, Plaintiff-Respondent, v. Boyd BECKETT, Vera Beckett, Johnson, a widow, and LaMont Bair, Defendants-Appellants.
• Court: Idaho Supreme Court

Page 475

419 P.2d 475

91 Idaho 220

BOSTON INSURANCE CO. (Mass.), foreign corporation, Plaintiff-Respondent, v. Boyd BECKETT, Vera Beckett, Johnson, a widow, and LaMont Bair, Defendants-Appellants.

No. 9790.

Supreme Court of Idaho.

Oct. 24, 1966.

W. Lloyd Adams and Mary Smith, Rexburg, for appellants. Holden, Holden & Kidwell, Idaho Falls, for respondent.

SPEAR, Justice.

Boston Insurance Co., a foreign corporation duly licensed to write fire insurance policies within the State of Idaho, filed an action in the district court, Bonneville County, for a determination of its liability under a fire insurance policy issued to Boyd Beckett on April 6, 1962, as owner, for the loss of, or damage to, a summer cabin situated on Forest Service land in the Island Park section of Fremont County, in the amount of $6,500.00 and for the loss of, or damage to, personal property on the premises in the amount of $1,500.00. The cabin was destroyed by fire on December 19, 1963.

The property was occupied by virtue of what is termed a special use permit from the U. S. Forest Service originally issued to Alvin L. Johnson. The permit issued Mr. Johnson and a terminable one which permitted him the use of the land for so long as the property was properly maintained in accord with the regulations specified within the permit. Generally, subject to Forest Service approval, such as permits are transferable. With respect to the permit issued Mr. Johnson, however, the Forest Service placed thereon the restriction that whenever transferred the permit would be subject to a five-year tenure limitation for it was planned to retire this particular plot from summer home use and utilize the property in that general area for public rather than private use. The permit currently stands in the name of Resi Johnson, the wife of Alvin Johnson, having been officially transferred into her name in August, 1963, a few years after the death of her husband. The five-year tenure limitation otherwise applicable was not enforced where the permit was transferred to the widow of an original permittee. Mr. Johnson and Mrs. Johnson were the owners of the cabin which could be removed from the premises at any time under proper supervision of the Forest Service.

Since 1960, when her husband died, Mrs. Johnson had given the use of the cabin to Boyd Beckett, a son-in-law, and her daughter, Vera Beckett. The insurance policy then existing on the property was turned over to Boyd Beckett and when that policy lapsed Beckett, as owner, acquired the policy now in question. The Becketts from 1960 on assumed the cost of maintaining the cabin and in all other respects appeared the owners of the summer home. Mrs. Johnson remained the record owner however. The court found that an effective inter vivos gift of the cabin had not been made but that Mrs. Johnson had intended to will the cabin to the Becketts.

Because of marital discord, Vera Beckett, at about the time the summer home was destroyed, was staying with her mother and her husband had been denied the use of the cabin for several months. The Becketts have since been divorced and each has remarried. Mistakenly believing the insurance would be paid over to Boyd Beckett immediately, Mrs. Beckett caused her mother to enter a claim for the insurance proceeds and both signed a sworn statement alleging that Mrs. Johnson was the owner of the cabin. Before trial the claim was withdrawn and the parties stipulated that the single question which need be decided was whether Boyd Beckett, the named insured, had an insurable interest in the summer cabin. LaMont Bair, a creditor of Boyd Beckett, also filed a claim against the insurance proceeds and was made a defendant in the lawsuit.

The district court found that while the Becketts had the right, exclusive as to all except Mrs. Johnson, to the use of the cabin, Boyd Beckett did not have an insurable interest under the now applicable statutory definition found in I.C. § 41-1806(2). ¹ A valid insurable interest did exist with regard to the personal property on the premises. The court therefore issued its order that the amount of $1,500.00 be paid into court by the Boston Insurance Co. to await determination as to the respective rights between Vera Beckett, Boyd Beckett and LaMont Bair. Defendants appeal from the trial court's finding that Boyd Beckett did not have an insurable interest in the cabin.

Two principal issues are presented on appeal. First, whether Mrs. Johnson had made an effective inter vivos gift of the summer home to the Becketts. Had a gift been found, Boyd Beckett would concededly have had an insurable interest at the time the cabin was destroyed by fire. (Idaho law requires that the insurable interest exist at the time of loss. I.C. § 41-1806(1).) Secondly, whether Beckett, though no gift is found, and a 'substantial economic interest' in the cabin such that it was a properly insurable interest under the statutory definition, I.C. § 41-1806(2). This subsection provides that an insurable interest means any actual, lawful and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment. The trial court found that Boyd Beckett's interest, i.e., the right to use the cabin, was actual and lawful, but not economically substantial and did not qualify as an insurable interest.

The requirements necessary for a gift inter vivos are that the donor part with all present and future dominion over the property, which must be delivered to the donee or someone for him. The gift must be absolute and irrevocable without reference to taking effect at some future period. The mere intention to give in the future is insufficient in law. Goggins v. Herndon, 73 Idaho 169, 249 P.2d 203; Zimmerman v. Fawkes, 70 Idaho 389, 219 P.2d 951; Witthoft v. Commercial D. & I. Co., 46 Idaho 313, 268 P. 31. See also Quandary Land Development Co. v. Porter, 408 P.2d 978 (Colo.1965); Allen D. Shadron, Inc. v. Cole, 2 Ariz.App. 69, 406 P.2d 419 (1965). The evidence adduced at trial relevant to the issue of whether a gift had been made is substantially conflicting, with Mrs. Johnson and the Becketts testifying that a final and complete gift of the summer home was made. However, other evidence disclosed that on December 20, 1963, the day following the fire, Norman Mayo, an insurance adjuster, in the course of investigating the fire, visited the home of Mrs. Johnson and obtained from both her and her daughter, Vera Beckett, who was then separated from her...