Mississippi Fire Ins. Co. v. Planters' Bank of Tunica

• Citation: 103 So. 84,138 Miss. 275
• Decision Date: 09 February 1925
• Docket Number: 24624
• Parties: MISSISSIPPI FIRE INS. CO. v. PLANTERS' BANK OF TUNICA. [*]
• Court: United States State Supreme Court of Mississippi

103 So. 84

138 Miss. 275

MISSISSIPPI FIRE INS. CO. v. PLANTERS' BANK OF TUNICA. ^[*]

No. 24624

Supreme Court of Mississippi

February 9, 1925

Division B

1 INSURANCE. Lessee has insurable interest; lessee may recover full amount of fire policy issued to him on leased premises.

Under valued policy law, Hemingway's Code, section 5056 (Code 1906, section 2592), lessee has insurable interest in leased premises, and may recover the full amount of fire policy issued to him, and not merely the value of leasehold.

2. CONSTITUTIONAL LAW. Whether statute is wise not question for court.

Court will not concern itself with question of whether a statute is wise or unwise.

3. CONSTITUTIONAL LAW. Valued policy law held not violative of equal protection clause.

Valued policy law, Hemingway's Code, section 5056 (Code 1906 section 2592), entitling lessee, to whom fire policy covering leased premises has been issued, to recover full amount of policy, and not merely value of unexpired lease, held not violative of equal protection clause of Constitution.

4. CONSTITUTIONAL LAW. Insurance. Valued policy law held not violative of due process clause.

Valued policy law, Hemingway's Code, section 5056 (Code 1906 section 2592), entitling lessee, to whom fire policy covering leased premises has been issued, to recover full amount of policy, and not merely value of unexpired lease, held not violative of due process clause of Constitution.

5 INSURANCE. Fire policy issued to lessee, entitling lessee to full amount of policy, and not merely to value of unexpired lease, held not contrary to public policy.

Fire policy covering leased premises, issued to lessee and entitling lessee, under valued policy law, Hemingway's Code, section 5056 (Code 1906, section 2592), to full amount of policy, and not merely value of unexpired lease, held not contrary to public policy.

HON. W. A. ALCORN, JR., Judge.

APPEAL from circuit court of Tunica county, HON. W. A. ALCORN, JR., Judge.

Action by the Planters' Bank of Tunica against the Mississippi Fire Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Judgment affirmed.

Wells, Stevens & Jones, for appellant.

Before getting into the merits of the argument, see sections 2332 and 2333, Hemingway's Code. Under the laws of the state of Mississippi a lessee is not required to rebuild the destroyed buildings unless he contracts to do so. The rule at common law was just the reverse and where the lessee had contracted to keep in repair, the law required that he rebuild where the building was accidentally destroyed by fire. One reading the statute in connection with the above section of the lease can readily see that Wells was in no way obligated to rebuild the dwelling destroyed; on the other hand the above section absolutely relieved him from such a duty. See, Fowler & Moore v. Payne, 49 Miss. 32, which held: A covenant to repair is equivalent to a covenant to rebuild. The rule of Fowler v. Payne, was the rule at common law and followed by every state in the Union for many years. Section 2332, Hemingway's Code, has relieved the lessee of this burden, and he now has no financial interest in the premises occupied as lessee. See, also, section 2333, Hemingway's Code; Taylor v. Hart, 73 Miss. 22.

What is insurable interest? Reasons for rule. 26 C. J. 18; 1 Briefs of the Law of Insurance by Cooley, 136, 143; Insurance Co. v. Butler, 38 Ohio 128. There are a number of cases which hold that a lessee has an insurable interest in the property under lease. Careful examination of these cases will disclose that not one of them was decided under a state statute similar to our statute releasing the lessee from all obligation to pay for or rebuild a building destroyed by fire. The court should distinguish between cases of this kind and a case like the case at bar. Some of the important cases showing that the above contention is true, are: Hidden v. Slater Mutual Fire Ins. Co., 2 Cliff. 266; Ely v. Ely, 80 Ill. 532; Imperial Fire Ins. Co. v. Murray, 73 Pa. 13; May on Insurance, sec. 83.

If this court should go to the bottom of what is or is not a wager, or what constitutes an insurable interest, the court would find that insurance started principally as marine insurance and some of the fundamental principles have been settled in the early cases in both marine and life policies. The court will, also, find that mischiefs were so great that it led to the enactment of the English statute, 14 G. 3 c. 48 (1774): The English Parliament, also, enacted, 19 G. 2, c. 37. These statutes had their influence on American jurisprudence and became a part of the public policy of our nation. Pritchet v. Insurance Co. of North America, 3 Yeates (Pa.) 457; Ellmaker v. Franklin Fire Ins. Co., 6 W. & S. 439; Conn. Life Ins. Co. v. Schaefer, 94 U.S. 457; Warnock v. Davis, 104 U.S. 775; Exchange Bank of Macon v. Loh, 104 Ga. 446, 44 L. R. A. 372.

Testing the case at bar by the principles of the foregoing case, the lessee, Wells, did not own the building which he undertook to insure in his own name, and, in the light of the Mississippi statutes, had no insurable interest. If a lessee or tenant can take possession and insure buildings to the full value and then collect that full under the Mississippi statute commonly called the valued policy law, then a wide avenue is opened up for the grossest kind of fraud and imposition. We are not charging Mr. Wells with any fraud in the case at bar; we are not charging the Planters Bank of Tunica with any fraud. We are arguing and relying upon a principle of law sustained by sound public policy and, we think, sustained by the general principles of insurance law, domestic and foreign. Howard Fire Ins. Co. v. Chase, 18 L.Ed. 524; Hamburg Bremen Fire Ins. Co. v. Lewis, 4 App. D. C. 80.

We have no question here of an agent who has obligated to keep the premises insured for the benefit of the owner, or any question of a trustee or fiduciary. We have a plain case where the lessee undertakes to transfer the title of the landlord to himself through the medium of an insurance company. If the insurance in this case is valid at all, the proceeds should belong to the landlord and not the lessee. It is our contention that the insurance is absolutely void. If appellee can recover at all the amount of his recovery for the building should be limited to the value of his unexpired lease and any damage thereto by reason of the fire. Getchell v. Mercantile & Manufacturers Mut. Fire Ins. Co. (Me.), 83 A. 801.

Dulaney & Jaquess, for appellee.

I. Public policy. Courts with reluctance permit company to escape its obligation. Orrell v. Mfg. Co., 83 Miss. 800; 6 R. C. L. 710; 13 C. J. 427; Steen v. Modern Woodmen, 296 Ill. 104, 129 N.E. 546, 17 A. L. R. 407.

II. Public policy permits the tenant to insure and recover the value of the property insured. Georgia Home Ins. Co. v. Jones, 49 Miss. 80; Home Ins. Co. v. Gibson, 72 Miss. 58.

III. The valued policy law applies, although the assured is not full owner. Aetna Ins. Co. v. Heidelburg, 112 Miss. 46, 72 So. 852; Ins. Co. v. Antram, 86 Miss. 224.

IV. Sections 2332 and 2333, Hemingway's Code, leave tenant under common-law obligation where loss is due to his negligence. Hope etc. Co. v. Assurance Co., 74 Miss. 320, 14 R. C. L. 910, 14 R. C. L. 915; Secs. 2332 and 2333, Hemingway's Code; 14 R. C. L. 1223; Ins. Co. v. Lawrence, 10 Peters, 507, 9 U.S. (L. Ed.) 512; Nash v. American Ins. Co., 174 N.W. 378, 10 A. L. R. 724.

V. Wells was obligated to rebuild under the contract and its construction by the parties to it. Clause from Lease Contract; Spengler v. Lumber Co., 94 Miss. 780, 48 So. 966; 6 R. C. L. 852.

VI. Authorities from other states. Orient Ins. Co. v. Daggs, 172 U.S. 557, 43 L.Ed. 552; Western Assurance Co. v. Stoddard (Ala.), 7 So. 379; Getchell v. Ins. Co., 109 Me. 274, 83 A. 801; 1913-E Ann. Cas. 738 and note; Kludt v. Ins. Co., 152 Wis. 637, 140 N.W. 321, 1914-C Ann. Cas. 609; Santa Clara Female Academy v. Ins. Co., 98 Wis. 257, 67 Am. St. Rep. 805; Siemers v. Ins. Co., 144 Wis. 114, 126 N.W. 669, 139 Am. St. Rep. 1083; 26 C. J. 358; La Font v. Ins. Co. (Mo.), 182 S.W. 1029; Home Ins. Co. v. Coker, 43 Okla. 331, 142 P. 1195, 1917-C Ann. Cas. 950; Fowle v. Springfield Ins. Co., 122 Mass. 191, 23 Am. St. Rep. 308.

VII. The value of the furniture was sufficiently proved. Cooper v. State, 53 Miss. 393; Carberry v. Burns, 68 Miss. 573.

Wells, Stevens & Jones, in reply for appellant.

I. Appellee admits that all of the courts of this country are in accord on the question of overthrowing contracts on the ground of public policy, but appellee fails to show that all of the courts strike a different attitude where the contract involved is one of insurance. Under an insurance contract the damage to the public is far greater than under any other contract and the courts have held that the contract of insurance as one of indemnity requires that insured shall have some interest in the property which will be injuriously affected or imperilled by the destruction or the injury to the property by fire; Citing: 26 C. J. 18; Howard Fire Ins. Co. v. Clash, 5 Wall. 509; William v. North Germany Ins. Co., 24 F. 625.

Appellee cites 6 R. C. L. 710, on the general subject of public policy, but fails to give to the court the benefit of 6 R. C. L., sec. 120. In order that the court may not be misled by the cases cited in appellee's brief, see cases touching on the question of wagering contracts and public policy. 1 Briefs on the Law of Insurance by Cooley, p. 136; King State v. Mutual Fire Ins. Co., 7 Cush. 1; Ins. Co. v. Butler, 38 Ohio 128.

We follow with interest the arguments of counsel by which he attempts to establish an insurable interest in a lessee...