Cook's Adm'r v. Franklin Fire Ins. Co.

• Decision Date: 08 May 1928
• Citation: 224 Ky. 360,6 S.W.2d 477
• Parties: COOK'S ADM'R v. FRANKLIN FIRE INS. CO. et al.
• Court: Kentucky Court of Appeals

6 S.W.2d 477

224 Ky. 360

COOK'S ADM'R v. FRANKLIN FIRE INS. CO. et al.

Court of Appeals of Kentucky

May 8, 1928

Appeal from Circuit Court, Perry County.

Action by G. W. Cook's administrator against the Franklin Fire Insurance Company and others. From a judgment of dismissal plaintiff appeals. Affirmed.

Wilson & Wilson and Napier & Helm, all of Hazard, for appellant.

F. M Drake, of Louisville and Morgan, Eversole & Bowling, of Hazard, for appellees.

SANDIDGE C.

This is an appeal by G. W. Cook's administrator from the same judgment dealt with by this court's opinion in Franklin Fire Insurance Co. of Philadelphia v. Cook's Adm'r et al., 216 Ky. 15, 287 S.W. 553. That opinion considered and determined the question as between the present appellee, the Franklin Fire Insurance Company, and John E Campbell et al., purchasers at a judicial sale, whether they were entitled to recover the proceeds of a policy of insurance which was issued prior to the judicial sale insuring the property sold, the fire occurring after the sale but before its confirmation, it appearing that there had been no assignment of the policy to them. It was there written that the purchasers could not recover.

In the same action the original owners, whose policy had not been assigned, sought also to recover the proceeds of the insurance policy. Insurer defended as to them upon the theory that the judicial sale of the property insured avoided the policy under the provision that it should be void, "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." The judgment below denied the policyholders the relief sought, and they have appealed.

The facts are agreed, and a pure question of law is presented. The dwelling house owned jointly by the several heirs of G W. Cook was insured for them by appellee to the amount of $2,000. Subsequent to the delivery of the policy sued upon an action was instituted by some of the joint owners against the others for a sale of the real estate involved and a division of its proceeds upon the ground that it was indivisible. It had been adjudged that the real estate be sold and the master commissioner, as directed by the judgment, had sold it. The highest and best bidder at the sale had been accepted as its purchaser by the commissioner and had executed bond for the purchase price. Before the sale was confirmed, the house insured was destroyed by fire. The sale subsequently was confirmed and the purchaser was or will be required to pay the purchase price, regardless of the fact that in the meanwhile the dwelling house had been destroyed by fire. It is insisted for appellant that under these facts there had been no change in the interest, title, or possession of the subject of insurance at the time the fire occurred, within the meaning of the above-quoted provision of the insurance contract; that under judicial sales there is not a change of title or interest until the sale is confirmed. Appellees take the opposing position, insisting that there was a change of title and interest when the sale was had and the purchaser executed bond for the purchase money. That is the narrow question presented by this appeal.

This court is committed to the doctrine that the equitable title of property passes with a valid judicial sale of it and the execution of bond by the purchaser. In Vance's Adm'r v. Foster and Ray, 9 Bush (72 Ky.) 389, certain mill machinery sold under order of court was purchased by appellees, Foster and Ray. Within a few days thereafter and before the sale had been reported and confirmed, the machinery was destroyed by fire. The controversy there was over who should bear the loss. It was said:

"The essential inquiry to be determined therefore is, Did the appellees by their purchase acquire such a right to the property and incur such correlative responsibility as to render it equitable and just to confirm the sale, and coerce a compliance on the part of the appellees with the terms of their purchase, notwithstanding the accidental loss of part of the property?

If it be true, as contended for the appellees, that their bids for the several parcels of machinery and their acceptance by the commissioner were not effectual for any purpose until approved by the court, and could have only operated to transfer the title, then, as from the time of confirmation, we readily concede that the loss sustained in this case should fall on the estate of Vance and not on the appellees. But in our opinion both the rights which the appellees acquired, and the responsibilities they incurred by becoming the accepted bidders for the property, greatly exceeded those resulting from mere proposals or offers to purchase subject to the approbation of the court. The principle cannot, we think, be questioned that where at the time a sale is made no valid ground for setting it aside exists the accepted bidder is entitled to his purchase, however much the property may appreciate in value between the sale and time for confirming it. This being so, why should he not be held bound by his purchase, although from accidental causes the property in the meantime may become impaired or depreciated in value?"

In Bond v. Brand's Trustee & Others, 115 Ky. 632, 74 S.W. 673, 25 Ky. Law Rep. 26, the facts were: On August 2 1902, Bond purchased real estate at judicial sale, bidding $22,420, and executing bond for the purchase price. This sale was not confirmed until the 13th day of October thereafter. At that time it was required by our statutes relating to revenue and taxation that all taxable property be assessed and valued as of the 15th of September. The statutes then, as now, made the holder of the legal title, the holder of the equitable title, the claimant and the bailee in possession of property on the assessing date liable for the taxes; but provided that, as among themselves, the...