Insurance Co. of North America v. Erickson

• Citation: 50 Fla. 419,39 So. 495
• Court: United States State Supreme Court of Florida
• Decision Date: 07 November 1905
• Parties: INSURANCE CO. OF NORTH AMERICA et al. CITIZENS' INS. CO. OF MISSOURI v. ERICKSON. CITIZENS' INS. CO. OF MISSOURI v. SAME.

39 So. 495

50 Fla. 419

INSURANCE CO. OF NORTH AMERICA et al. CITIZENS' INS. CO. OF MISSOURI v. ERICKSON. CITIZENS' INS. CO. OF MISSOURI v. SAME.

Florida Supreme Court, Division B.

November 7, 1905

Error to Circuit Court, Duval County; Rhydon M. Call, Judge.

Actions by John W. Erickson against the Insurance Company of North America and the Fire Association of Philadelphia and against the Citizens' Insurance Company of Missouri. Judgments for plaintiff, and defendants bring error. Reversed.

Syllabus by the Court

SYLLABUS

The following provision in a policy of fire insurance is material, valid, and binding on the parties to the contract 'This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void * * * if the interest of the insured he other than unconditional and sole ownership.'

Where an assured, prior to taking out a policy of fire insurance on property, executes and delivers to a third party a bond for title or contract for the sale and conveyance of the property, whereby he unqualifiedly obligates and binds himself, his heirs, executors, and administrators, to convey said property in fee to such third party by good and sufficient deed, free of all incumbrances, upon the payment by such vendee of definitely fixed and specified sums of money at definitely fixed and specified dates, and whereby such third party vendee unqualifiedly binds and obligates himself, his heirs, executors, administrators, and assigns to pay such definitely fixed and agreed sums of money at the dates specified, such contract or bond for title renders the vendor no longer the sole and unconditional owner of the property, but converts him into a trustee holding the legal title in trust for the vendee as security for the payment of the agreed purchase price, and unless such status towards the property be provided for by agreement between the insurer and insured, duly indorsed on the policy of insurance or added thereto, such policy of insurance will be null and void if it contains the provision that 'this entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the interest of the insured be other than unconditional and sole ownership.'

The interest of a purchaser of property, which he has unqualifiedly agreed to buy and which the former owner has absolutely contracted to sell to him upon definite terms, is the sole and unconditional ownership, within the true meaning of the ordinary clause upon that subject in insurance policies, because the vendor may compel the vendee to pay for the property and to suffer any loss that occurs.

COUNSEL A. W. Cockrell & Son and King, Splading &amp Little, for plaintiffs in error.

Geo. M Robbins, for defendant in error.

OPINION

TAYLOR J.

The pleadings and issues in these two causes are substantially the same, and they were submitted here together on argument, and what is said and decided herein in one of such causes applies as well to the other.

John W. Erickson, the defendant in error, brought two suits in the circuit court of Dade county against the respective plaintiffs in error upon two policies of fire insurance, and recovered judgment in each case, and the said insurance companies bring the cases here for review by writs of error.

Various errors are assigned upon rulings of the court on the pleadings, but as what we shall say as to one of these issues will effectually dispose of the two causes it becomes unnecessary to notice any of the other assignments of error.

Both of the policies sued upon in the two respective suits contained the following provision:

'This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void * * /f the interest of the insured be other than unconditional and sole ownership.'

On the 31st of August, 1904, by leave of the court the defendants in both cases interposed the following plea:

'That the alleged contract declared on is a policy of fire insurance, made a part of the declaration, and the same as set forth provides that the entire policy, unless otherwise provided by agreement indorsed thereon or added thereto, shall be void if the interest of the assured be other than unconditional and sole ownership.

'And defendant further says that the said policy became and was and is void, in that it was not otherwise provided, by agreement indorsed thereon or added to said policy, that the interest of the insured in the property insured might be other than unconditional and sole ownership, and yet so it was that the building described in said policy as the subject-matter of insurance stood upon, and was in law a part of, the parcel of land hereinafter described, and that at the time of the making of said policy of insurance the interest of the said plaintiff in said building was other than unconditional and sole ownership, in this: that the said plaintiff, at the time of the issuing of said policy of insurance and prior to the making of said policy, had contracted to sell the said property under and in pursuance of his certain written contract under seal, in the words and figures as follows:

"Articles of agreement, made this 12th day of March in the year of our Lord one thousand nine hundred and three, between John W. Erickson, of Dade county, Florida, party of the first part, and W. L. Burch, of Warren county, Kentucky, party of the second part,

"Witnesseth, that if the said party of the second part shall first make the payments and perform the covenants hereinafter mentioned on his part to be made and performed, that the said party of the first part hereby covenants and agrees to convey and assure to the said party of the second part, in fee simple, clear of all incumbrances whatever, by a good and sufficient deed, the lot, piece, or parcel of ground situated in the county of Dade, state of Florida, known and described as follows, to wit: The south one hundred feet of lot eleven (11), block one hundred and five (105), of the city of Miami, according to a map on file in the office of clerk of circuit court in and for said county, made by A. L. Knowlton, C. E.

"And the said party of the second part hereby covenants and agrees to pay to said party of the first part the sum of seven thousand dollars in the manner following: Four hundred dollars cash upon the signing of this contract, six hundred dollars on the first day of May, 1903, and six thousand dollars upon the delivery of the deed October 1st, 1903. The said party of the first part retaining all the rents until the said October 1st, 1903.

"And in case of the failure of the said party of the second part to make either of the payments or any part thereof, or to perform any of the covenants on his part hereby made and entered into, this contract shall, at the option of the party of the first part, be forfeited and terminated, and the party of the second part shall forfeit all payments made by him on this contract, and such payments shall be retained by the said party of the first part in full satisfaction and in liquidation of all damages by him sustained, and the said party of the first part shall have the right to re-enter and take possession of the premises aforesaid without being liable to any action therefor.

"It is mutually agreed, by and between the parties hereto, that the time of payment shall be an essential part of this contract and that all covenants and agreements herein contained shall extend to and be obligatory upon the heirs, executors, administrators and assigns of the respective parties.

"In witness whereof, the parties to these presents have hereunto set their hands and seals the day and year first above written.

"John W. Erickson. [Seal.]

"W. L. Burch. [Seal.]

"Signed, sealed, and delivered in the presence of Charles Parry, Joseph W. Homer.

"State of Florida, County of Dade.

"Before me, the undersigned authority, on this day personally appeared John W. Erickson, to me well known to be the person described in and who executed the within and foregoing contract, and acknowledged to me that he executed the same for the uses, purposes, and consideration therein expressed.

"In testimony whereof, witness my hand and seal in the city of Miami on this the --- day of March, A. D. 1903.

"Mitchell D. Price,

"Notary Public, State of

"Florida at Large.'

'And defendant further says that the provisions of said sale had been complied with by the said parties thereto up to and at the time of the making of the said policy, and continuously up to

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