Hamlet v. American Eagle Fire Ins. Co.

Decision Date08 October 1929
Docket Number6469.
Citation150 S.E. 7,107 W.Va. 687
CourtWest Virginia Supreme Court

Submitted October 1, 1929.

Syllabus by the Court.

Where by a policy of fire insurance, the loss, if any, is made payable to a third person, "as his interest may appear," the language imports an interest in the property in such third person.

A provision in the printed part of a policy of fire insurance that "this entire policy shall be void, unless otherwise provided by agreement in writing added hereto (a) if the interest of the insured be any other than unconditional and sole ownership; or (b) if the subject of insurance be a building on ground not owned by the insured in fee simple," may be waived by the company.

S. and wife conveyed to Mary Hamlet and husband a certain parcel of real estate with improvements thereon, by deed, in which S retained a lien for the unpaid purchase price, and which deed was duly delivered but not recorded. Subsequently thereto the local agent of the company made and issued to S. its policy for $500, whereby Mary Hamlet (with loss payable clause to S. as his interest might appear) was insured against loss or damage to the improvements covered by deed. Some months later (and within the term of the policy) the improvements covered by the policy were destroyed by fire the loss occasioned thereby amounting to $500. There was due and owing to S. under his vendor's lien at the time of destruction of the property an amount in excess of the amount of the policy.

Held, that Mary Hamlet had an insurable interest in the property.

Held, also, that the provision inserted in the policy that the "loss, if any, shall be payable to S. as his interest may appear," was sufficient to put the company on notice that another than the insured was claiming an interest in the property insured, and that the issuance of the policy to S. without inquiry from the insured as to her true interests in the property amounts to a waiver by the company of the provision requiring sole ownership in the insured.

Error to Circuit Court, Mingo County.

Proceeding by notice of motion for judgment by Mary Hamlet and another against the American Eagle Fire Insurance Company. Judgment for plaintiffs, and defendant brings error. Affirmed.

Vinson, Thompson, Meek & Scherr, of Huntington, for plaintiff in error.

Lafe B. Chafin, of Williamson, for defendants in error.


This is a Proceeding by notice of motion for judgment, upon a statutory fire insurance policy. The case was heard upon an agreed statement of facts by the court, sitting in lieu of a jury. From such statement it appears that Sam Swan, on or before July 18, 1927, sold the property in question (a house and lot) to Mary Hamlet and Jeff Hamlet, her husband, and retained in the deed a vendor's lien for the unpaid purchase price. This deed was delivered, but never recorded. On July 18, 1927, upon the application of Sam Swan, to whom there remained money due on the purchase price of the property, the local agent of the defendant insurance company "made and issued to Sam Swan its policy of fire insurance number 134 whereby Mary Hamlet, with loss payable clause to Sam Swan as his interest might appear, was insured against all direct loss or damage by fire to the improvements covered by said deed." At the time of the fire (November 10, 1927) there was due Sam Swan on the vendor's lien an amount in excess of $500, the amount of the policy. The loss was placed at $500. The court entered a judgment in favor of the plaintiffs, Mary Hamlet and Sam Swan, for the amount of the policy. It is from this judgment that the defendant prosecutes this writ of error.

The sole question here is in narrow compass. The question presented is whether there may be a recovery in view of the fact that the policy of insurance contained a provision to the effect that it shall be void, unless otherwise provided by agreement, if the interest of the insured in the property shall be other than unconditional and sole ownership, or if the property covered be upon ground not owned by the insured in fee simple. The rule in most of the states, and particularly is it the established rule of this jurisdiction, is that this provision in the body of an insurance policy is inserted by and for the benefit of the insurer. It is to be construed, therefore, strictly against it, and liberally in behalf of the insured. If, therefore, its terms can be satisfied by a construction which will save the policy, and at the same time accord with the established rules of law, such construction must be adopted. Booher v. Farmers' Mut. Fire Association, 91 W.Va. 468, 113 S.E. 754; Tucker v. Insurance Co., 58 W.Va. 30, 51 S.E. 86; Coniglio v. Connecticut Fire Insurance Co., 180 Cal. 596, 182 P. 275, 5 A. L. R. 805; Hartford Fire Insurance Co. v. Walsh, 54 Ill. 164, 5 Am. Rep. 115.

Counsel for the insurance company have not cited us to, nor have we upon diligent search found, a decision in which the policy was avoided under the peculiar situation presented here. The courts of the country, as well as our own court, have trenched far on the doctrine that the insured shall have the ""sole and unconditional ownership," where the policy contains a provision to that effect in order to protect the policy from invalidity. To give a construction to this provision according to the literal meaning of the words employed would be to render all recoveries difficult. So, for instance, we have held that a complete equitable title in the assured will satisfy such provision. Kimball Ice Co. v. Insurance Co., 100 W.Va. 728, 132 S.E. 714. Our latest expression goes much farther, declaring that, where the seller has delivered goods to the buyer under a conditional sales contract, the interest therein is an equitable right, and, in case of a destruction of such goods by fire, recovery thereof by the buyer on an insurance policy may not be defeated by the presence in the contract of this clause merely because the legal title is in the seller. Cook v. Insurance Co., 105 W.Va. 375, 143 S.E. 113.

Counsel for the company cites Tyree v. Insurance Co., 55 W.Va. 63, 46 S.E. 706, 66 L. R. A. 657, 104 Am. St. Rep. 983 2 Ann. Cas. 130, in support of his position that there should be no recovery in this case. The facts there are strikingly variant to the ones here under consideration. There the insured applied for and received the policy. The assured represented himself to be the sole owner, whereas the title to the property was in his wife. Judge Brannon, speaking for the court, said: "A vital question is: Had Tyree an...

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