Central Mfrs. Mut. Ins. Co. v. Jim Dandy Markets, 6833.

• Court: United States District Courts. 9th Circuit. United States District Court (Southern District of California)
• Writing for the Court: Harry G. Sadicoff, of Los Angeles, Cal., for defendant Jim Dandy Markets, Inc
• Citation: 77 F. Supp. 171
• Parties: CENTRAL MFRS. MUT. INS. CO. et al. v. JIM DANDY MARKETS, Inc. et al.
• Docket Number: No. 6833.,6833.
• Decision Date: 15 April 1948

77 F. Supp. 171

CENTRAL MFRS. MUT. INS. CO. et al.
v.
JIM DANDY MARKETS, Inc. et al.

No. 6833.

District Court, S. D. California, Central Division.

April 15, 1948.

77 F. Supp. 172

Thomas P. Menzies and Harold L. Watt, both of Los Angeles, Cal., for plaintiffs.

Harry G. Sadicoff, of Los Angeles, Cal., for defendant Jim Dandy Markets, Inc.

Hindman & Davis and E. Eugene Davis, all of Los Angeles, Cal., for defendant Fireman's Fund Ins. Co.

77 F. Supp. 173

Clyde Thomas and Milan Medigovich, both of Los Angeles, Cal., for defendant E. F. Smith.

YANKWICH, District Judge (after stating the facts as above).

The above-entitled cause heretofore tried, argued and submitted, is hereby decided as follows:

I. On the plaintiff's complaint seeking declaratory relief, the declaration will be for the defendant as follows:

(a) The defendant Jim Dandy Markets, Inc., had an insurable interest in the building which was covered by the policies of fire insurance dated respectively June 19, 1946, and July 19, 1946, under their conditional sales contract for the assignment of the leasehold, dated June 27, 1946 (Defendant's Exhibit 10).

(b) The loss payable under the policies totaling the sum of $25,000.00 is due from the plaintiffs to the defendant Jim Dandy Markets, Inc., and is not apportionable between the plaintiffs and the defendant Fireman's Fund Insurance Company, under the policy of insurance between the latter company and the defendant and cross-claimant, E. F. Smith, dated July 5, 1945.

II. Under the cross-claim of the defendant E. F. Smith against the defendant Jim Dandy Markets, Inc., a corporation, seeking reformation of that certain assignment of lease, dated June 27, 1946, judgment is ordered in favor of the defendant Jim Dandy Markets, Inc., on the finding that said assignment of lease conveyed to the defendant Jim Dandy Markets, Inc., all the rights, title and interest of E. F. Smith to the leasehold, including all the rights he had to the building thereon, and that there is no showing of mutual mistake in the execution of said assignment.

III. Under the cross-claim of the defendant Jim Dandy Markets, Inc., against defendant E. F. Smith, judgment is ordered in favor of the defendant E. F. Smith, that the defendant and cross-claimant Jim Dandy Markets, Inc., is not entitled to any of the proceeds of the insurance policy issued to the defendant E. F. Smith by the defendant Fireman's Fund Insurance Company.

For the guidance of counsel in preparing the findings, the Court states the grounds for its conclusions.

Comment.

The action being based on diversity of citizenship, the rights of the parties under the policies of insurance and under the assignment of lease are governed by state law. Angel v. Bullington, 1947, 330 U.S. 183, 191, 192, 67 S.Ct. 657. Under California law, the vendee under a conditional sales contract has an insurable interest, as the sole owner of the property. Kaufman v. All Persons, etc., 1911, 16 Cal. App. 388, 117 P. 586; Kavanaugh v. Franklin Fire Ins. Co., 1921, 185 Cal. 307, 311, 312, 197 P. 99. Such title is not, in any way, affected by the fact that the assignment is executory, so far as the vendee is concerned, and is dependent for full execution upon the performance by it of certain condition precedent, i. e., the payment of the full purchase price. For this reason, cases like Vierneisel v. Rhode Island Insurance Co., 1946, 77 Cal.App.2d 229, 175 P.2d 63, relied on by the plaintiffs do not apply. There, the court was dealing with an outright sale of real property which was not to become effective until the deed had actually been delivered. When this is the case, delivery into escrow does not pass title and any loss by fire is payable to the owner who remains, until the delivery of the deed, the sole owner of the property. Here the vendee was in possession and all that remained to be done by him was the payment of the price.

It is also clear, both under California and general law of insurance, that the insurance contracts between the plaintiffs and the defendant Jim Dandy Markets, Inc. and the insurance contract between...