Liberty Ins. Co. of City of New York v. Boulden

• Decision Date: 02 November 1892
• Court: Alabama Supreme Court
• Parties: LIBERTY INS. CO. OF CITY OF NEW YORK v. BOULDEN. SCOTTISH UNION & NAT. INS. CO. OF EDINBURGH v. SAME.

11 So. 771

96 Ala. 508

LIBERTY INS. CO. OF CITY OF NEW YORK v. BOULDEN.

SCOTTISH UNION & NAT. INS. CO. OF EDINBURGH v. SAME.

Supreme Court of Alabama

November 2, 1892

Appeal from circuit court, Jefferson county; JAMES B. HEAD, Judge.

Suits by Charles M. Boulden against the Liberty Insurance Company of the City of New York and the Scottish Union & National Insurance Company of Edinburgh, Scotland, to obtain the amount of insurance on a building destroyed by fire. The cases were tried together. There were separate verdicts and judgments in each case for plaintiff. Defendants appeal. Reversed.

Lea & Bell, for appellants.

Chisholm & Whaley, for appellee.

STONE C.J.

These were suits on policies of insurance against destruction or damage by fire to a wooden building, which is described in the policies. The complaint charges that the building was burned and totally destroyed on June 10, 1891, while the policies were of force. One defense to the action arose as follows: One clause of the policies provides that "this entire policy shall be void, if the interest of the insured in the property be not truly stated herein. 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, or if the subject of the insurance be a building on ground not owned by the insured in fee simple." Boulden (and another, who subsequently sold his interest to Boulden) purchased the ground on which the building was erected, by executory agreement dated May 31, 1888. One third of the purchase money was paid in cash, and the residue $1,000, was promised to be paid within one year from the date thereof. The purchasers bound themselves "to erect, on some eligible portion of block 14, A, (the property purchased,) an hotel of one hundred rooms capacity, which shall be heated and lighted by electricity, or other improved method of heating and lighting, said hotel to be in style and workmanship at least equal to the Lake View Hotel, situated at Lake View, near Birmingham, in county and state aforesaid *** that at any time after the roof of said hotel is raised, and on payment of the one thousand dollars above stipulated, the parties of the second part shall be entitled to demand and receive from the said party of the first part, who hereby binds itself to make same, a warranty deed in fee simple, with usual covenants, for said block No. 14, A, and block 12, A, with proper descriptions thereof, provided said parties of second part shall first execute and deliver to said party of the first part their joint and several bonds in the penal sum of three thousand dollars, ($3,000,) with the condition thereunder written that said hotel shall be completed within twelve months from date," etc. The agreement contains several other stipulations to be performed by the purchasers. These cases were tried in November, 1891, and the proof was that the $1,000, residue of the purchase money of the lots, had never been paid, "but the proof showed that the house stipulated to be built was built, and was the house insured by these policies." As to the other stipulations of the agreement, there was no testimony whether they had or had not been complied with. The foregoing is all the testimony, or its tendencies, bearing on the question of Boulden's title to or ownership of the lot on which the burned house stood, which is material to a correct decision of these cases.

It will be seen that, at the time the policies were taken out "the interest of the insured" was "other [less] than unconditional and sole ownership," and that in fact he did not own a fee-simple title in the property. This, unexplained and unrebutted, avoided the policies, and was a full defense to the present suits. The explanation and rebuttal of this prima facie defense, which was offered and relied on by plaintiff in these cases, may be summarized as follows: Adams & Co. were, and for some time had been, insurance agents in Birmingham, Ala. In January, 1889, the firm consisted of A. A. Adams, G. G. Adams, and one Tuttle. Before October, 1890, when the present policies were taken out, Tuttle had retired from the firm, and the business was then conducted in the same firm name,-"Adams & Co., by A. A. and G. G. Adams." Some time prior to January 30, 1889, Boulden had taken insurance from Adams & Co. as insurance agents on the identical property, the burning of which is the cause of action in these suits. He addressed them the following letter by mail: "Middleburg, Ky., Jan. 30th, 1889. Messrs. Adams, Tuttle & Co., Birmingham, Ala.-Dear Sirs: I forgot to tell you that the land on which the houses you insured for me [stand,] I have only a bond for title, but the money that built them was mine. I forgot to tell you that I have no deed yet for this property, and thought I had best write you about it. If this makes any difference, please attend to it. Yours, truly, C. M. BOULDEN." That this letter was received by Adams & Co. is fully proved by the fact that, on a search made at Boulden's request among the old papers of Adams & Co., the letter was found in an old file. Each of the persons who composed the partnership at the time the letter was written-A. A. Adams, G. G. Adams, and Tuttle-testified that he had no recollection of having received the letter or of having ever seen it. No action was taken upon it in reference to the insurance to which it related. In October, 1890, Boulden approached Adams & Co.-A. A. and G. G. Adams-with a view of obtaining insurance on the building described in the policies sued on in these cases. He desired $15,000 of insurance, and that...