Fidelity Phenix Fire Ins. Co. of New York v. Raper

• Decision Date: 21 November 1941
• Docket Number: 8. Div. 128.
• Citation: 6 So.2d 513,242 Ala. 440
• Parties: FIDELITY PHENIX FIRE INS. CO. OF NEW YORK v. RAPER.
• Court: Alabama Supreme Court

6 So.2d 513

242 Ala. 440

FIDELITY PHENIX FIRE INS. CO. OF NEW YORK v. RAPER.

8. Div. 128.

Supreme Court of Alabama

November 21, 1941

Rehearing Denied Jan. 29, 1942.

Further Rehearing Denied March 12, 1942.

Coleman Spain, Stewart & Davies, of Birmingham, for appellant.

Arnold Teks and W. L. Chenault, both of Russellville, for appellee.

THOMAS Justice.

The appeal challenged the action of the trial court in entering a judgment for the plaintiff, or in failing or refusing to find the facts with reference to the ownership of the insured's property and plaintiff's interest therein during the term of the policy sued on.

It is well established that in a proper case the appellate court should review the trial court on the sufficiency and correctness of its finding of facts. Shaw v. Knight, 212 Ala. 356, 102 So. 701; United States F. & G. Co., v Yeilding Bros., etc., 225 Ala. 307, 143 So. 176.

The law as to violation of contract clauses of policies of insurance as to insurable interests of assured was fully considered and authorities collected in Girard Fire & Marine Ins. Co. v. Gunn, 221 Ala. 654, 130 So. 180. The rule as to a waiver of the clauses of a policy requiring sole and unconditional ownership and ownership in fee simple or a recognized insurable interest of the land is likewise well established, and it is to the effect that the agent knew that the insured had an insurable interest in the property insured and the exact nature of such interest. Girard Fire & Marine Ins. Co. v. Gunn, supra; Gunn v. Palatine Ins. Co., 227 Ala. 245, 149 So. 672; Royal Exchange Assur. of London, England v. Almon, 206 Ala. 45, 89 So. 76.

After a careful examination of the matter before us, we are of the opinion that the order and judgment aforesaid is not in accord with the law having application to the facts as we understand them.

The evidence is uncontroverted that the land belonged to Sloss-Sheffield Steel & Iron Company. It was by the latter leased to Mott Bradley, with condition for cancellation that it could not be sublet without written permission. There was no provision in the lease with reference to placing improvements thereon. It followed that such permanent improvements placed on the land became a part of the freehold and thereby became the property of the original owner and lessor.

Contrary to the provisions of his lease, Mott Bradley subleased the property to E. B. Flippo, who erected the building, sought to be insured, on the land. The lease from Mott Bradley to Flippo provided that the improvements could be removed by Flippo. A joint agreement was made between Mott Bradley, E. B. Flippo and Letha Yalock, and by this agreement, Flippo sold the building to Mrs. Yalock and sublet to her.

The appellee Raper contends that he bought out Mrs. Yalock's interest. The evidence shows that actually he was buying it to start with in the name of Mrs. Yalock. It is not necessary to determine which was the fact, as in our opinion, it is immaterial as to which is true.

There is no evidence to show that the Sloss-Sheffield Steel & Iron Company ratified such agreement as to this or ever knew of its existence.

In addition to this, prior to this fire, the lease between Sloss-Sheffield Steel & Iron Company and Mott Bradley was cancelled by mutual consent, on October 17, 1939, and a new lease was made by Sloss-Sheffield Steel & Iron Company to J. W. Nelson and J. W. Howell. The property insured burned on January 4, 1940.

On these uncontradicted facts, plaintiff, if he had an interest at all, is merely a trespasser or tenant by sufferance. That is to say that plaintiff had no right which he could enforce so far as the building was concerned and could have been ousted at any time. He did not even have the right of possession except as a squatter or trespasser would have.

The law is clear that a person with no interest in the land other than that of a tenant by sufferance, or a squatter, or a trespasser, has no insurable interest in the property. This matter was expressly decided in the case of Royal Exchange Assur. of London, England v. Almon, 206 Ala. 45, 89 So. 76, 78. In that case the husband was living with his wife on a farm and insured the buildings belonging to his wife. The court held that he had no interest in the property other than the mere right to live there with his wife, and that this was not sufficient to establish an insurable interest. The court said:

"Did the plaintiff have an insurable interest in the barn? If not, then the policy would be void as to the barn; it being repugnant to public policy to allow one person to insure the property of another for his benefit.

* * * * *

"The barn belonged to the wife; possession alone was in the husband, the plaintiff. Just bare possession of the barn with no facts averred except being the husband, to show right of possession and use of the barn, is not sufficient interest in the barn by plaintiff to be insured. It is not an insurable interest."

To the same effect was the decision in Girard Fire & Marine Ins. Co. v. Gunn, 221 Ala. 654, 130 So. 180, supra.

In addition thereto this court held in Pope v. Glenn Falls Ins. Co., 136 Ala. 670, 34 So. 29, 30, that a person who did not have any right in property which he could enforce either at law or in equity had no insurable interest. It was therein said: "This was no contract that the plaintiff could have enforced at law or in equity against the association. It was without consideration and rested in parol. It was void under the statute of frauds. A person can have no insurable interest where his only right arises under a contract which is void or unenforceable either at law or in equity. 2 Joyce on Ins. § 892. See Essex Savings Bank v. Meriden Ins. Co. , 17 A. 930, 18 A. 324, 4 L.R.A. 759."

See, also, American Equitable Assur. Co. v. Powderly Coal & Lumber Co., 221 Ala. 280, 128 So. 225.

In the case of Ward v. Concordia Fire Ins. Co., 211 Mo.App. 554, 244 S.W. 959, 961, the plaintiff purchased property from a guardian who had no right to sell, and in holding that plaintiff had no insurable interest, the court said: "But, in the case at bar, plaintiff by his mere purchase and occupation of the property, obtained no equitable rights therein. He bought from one who purchased from a pseudo guardian, who had no right to sell, and who did not thereby bind the owner. In other words, plaintiff obtained no equitable rights whatever in the property, except such as are shown to be based upon a benefit which can be traced back to the owner Shanklin. If the money paid for the property at the so-called guardian's sale, or any part thereof, went to the owner or was used for his benefit, and if the plaintiff, after his purchase, made permanent improvements on said property which would enhance the value of the property in the true owner's hands, then to that extent plaintiff had an equitable interest in or lien upon the property. Shanklin v. Ward , 236 S.W. [64], 69. And such interest is an insurable interest, at least to the extent of the amount of money that went to the benefit of the true owner and value of the permanent improvements that were covered by the insurance. 1. Cooley's Briefs on Ins., 156; [Royal] Insurance Co. v. Stinson, 103 U.S. 25, 26 L.Ed. 473."

In the instant case, plaintiff claims that he acquired his rights from Mrs. Yalock, who in turn acquired whatever rights she had from Flippo, who in turn acquired whatever rights he had from Mott Bradley. The evidence shows that Mott Bradley had no right whatever in and to said property. The only rights that Bradley had were acquired by virtue of a written lease which he had with the Sloss-Sheffield Steel & Iron Company. In this lease there was no provision that any improvements could be removed at the expiration of the lease. The rule on this proposition was declared in Farmers & Merchants Bank v. Sawyer et al., 26 Ala.App. 520, 163 So. 657. The court there lays down the rule that any buildings or other fixtures or structures erected on land become attached to and a part of the realty, for the owner of the land. This case clearly differentiates that from Gray v. Crowell et ux., 214 Ala. 425, 108 So. 239; Clements v. Morton, 200 Ala. 390, 76 So. 306, and Walker v. Tillis, 188 Ala. 313, 66 So. 54, L.R.A.1915 A, 654, cited by the trial court in its finding of facts with reference to this case. Federal Land Bank v. Davis, 228 Ala. 85, 152 So. 226.

The evidence shows the lack of an insurable interest and this cannot be waived. American Equitable Assurance Co. v. Powderly Coal & Lumber Co., 225 Ala. 208, 142 So. 37, 39.

Moreover, the provisions of the policy with reference to occupancy were violated. The policy stipulated as follows: "* * * In Consideration of the Stipulations Herein Named and of Thirty-Six and No/100 ------- Dollars Premium does insure A. R. Raper, Russellville, Alabama, for the term of one year from the 6th day of March, 1939, at noon to the 6th day of March, 1940 at noon against all direct loss or damage by fire, except as hereinafter provided, to an amount not exceeding Twelve Hundred and no/100 ------- Dollars, to the following described property while located and contained as described herein, and not elsewhere, towit:

Ala., N. C. Mercantile Building

Form No. 110 (Three-fourths Value Clause)

(Revised 5-30)

$700.00 On the one story, frame building, with Metal roof, only while occupied by Owner as Filling Stat. Dwelling & Store and not for other purpose situated 2 Miles from Russellville, Ala. on the west side of North Jackson Highway

$XXX On Store Furniture, and Fixtures, including Iron Safes and Cash Registers, only while contained in the above described building.

$500.00 On Household Goods & Furniture while contained in...