Doss v. Roberts, 8100

• Decision Date: 31 October 1972
• Docket Number: No. 8100,8100
• Parties: James B. DOSS et ux., Appellants, v. Rena ROBERTS, Appellee.
• Court: Texas Court of Appeals

Page 839

487 S.W.2d 839

James B. DOSS et ux., Appellants, v. Rena ROBERTS, Appellee.

No. 8100.

Court of Civil Appeals of Texas Texarkana.

Oct. 31, 1972.

Rehearing Denied Dec. 5, 1972.

Norman Russell, Atchley, Russell, Hutchinson & Waldrop, Texarkana, for appellants.

William E. Wiggins, Texarkana, Woodrow Edwards, Mt. Vernon, for appellee.

RAY, Justice.

This suit involves the division of monies received from the sale of land found not to be subject to partition in kind. Rena Roberts, appellee (plaintiff), brought suit to partition 22 acres of land located in Bowie County, jointly owned with appellants (defendants), James B. Doss and wife Carolyn Sue Doss. The jury found that the land was not subject to partition in kind, and the court ordered the land sold and the proceeds divided equally after deducting the expenses of the sale. The parties each owned an undivided one-half interest in the property. The land was subject to a Veteran's Administration loan and lien. Appellant Doss purchased insurance on his interest in the dwelling located on the land in the amount of $10,000.00 and named the Veteran's Administration as loss payee. The improvements were destroyed. Doss paid the remaining balance due the V.A. in the sum of $8,964.87, and thereafter collected the insurance proceeds of $10,000.00. Appellee Roberts contended she was entitled to one-half of the insurance monies because the house was not rebuilt.

After appellants purchased an undivided one-half interest in the land and improvements, appellee Roberts continued to make payments to the Veteran's Administration. The court found that Mrs. Roberts had paid $1,580.00 to the V.A. on the loan, but refused her the right of reimbursement. The land sold for $12,000.00 and the trial court entered judgment allowing each party $6,000.00 from the sale and charged each with one-half of the $885.00 cost of sale. The trial court refused to give appellant Doss credit for one-half of the payment he was required to make the Veteran's Administration to retire the indebtedness against appellee Roberts' undivided one-half interest.

Doss and wife have timely appealed to this court seeking reformation of the trial court judgment and urge that they are entitled to be reimbursed the amount they paid the V.A. in order to clear the lien against Roberts' one-half of the property.

One of the problems to be resolved in this case is whether appellee Roberts was entitled to one-half of the proceeds from the insurance policy on the house. We think not.

Appellants Doss and wife purchased insurance to cover their interest alone in the house and did not purchase a policy covering the full value of the house. When the house burned, the insurance proceeds stood in the place of the interest owned solely by the Dosses and did not inure to the benefit of appellee Roberts. We confirm the rule of law that a policy of insurance constitutes a personal contract between the company and the insured, and a stranger to such policy may not ordinarily sue thereon and is not entitled to a share of the proceeds where the terms of the policy limit liability to the interest of the insured. Travelers Fire Ins. Co. v. Steinmann, 276 S.W.2d 849 (Tex.Civ.App. Dallas 1955, writ ref'd, n.r.e.); Grogan v. Henderson, 313 S.W.2d 315 (Tex.Civ.App. Texarkana 1958, writ ref'd, n.r.e.); Newsome v. St. Paul Mercury Insurance Company, 331 S.W.2d 497, 499 (Tex.Civ.App. Fort Worth 1960, no writ). We announce the rule that when an insured structure is damaged or destroyed, the insurance proceeds stand in the place of the interest owned by the purchaser of the policy alone and do not inure to the benefit of other interest owners when the purchaser of the policy insures only his interest in the property.

When a joint owner undertakes to insure the interest of all joint owners for the full value of the property, he may collect for himself and his cotenants the full amount of damages but may retain for himself only the value of his destroyed interest, the other cotenants being entitled to the balance. However, the one purchasing the insurance policy is entitled to reimbursement for the other joint owners for the cost of the insurance premiums paid in their behalf.

It is important to note however that one spouse cannot purchase insurance with separate funds upon a dwelling constituting the other's separate property, and thereby convert the insurance proceeds from separate property to community property if a loss should occur, just because he or she may have an insurable interest in the dwelling as a consequence of his or her homestead rights. Rolater v. Rolater, 198 S.W. 391 (Tex.Civ.App. Dallas 1917, no writ).

It is also important to note that, as between one owning the homestead interest in property and those who are the remaindermen, the one...