National Union Fire Ins. Co. v. Lassetter

• Decision Date: 31 March 1932
• Docket Number: 6 Div. 11.
• Citation: 141 So. 645,224 Ala. 649
• Parties: NATIONAL UNION FIRE INS. CO. v. LASSETTER ET AL.
• Court: Alabama Supreme Court

141 So. 645

224 Ala. 649

NATIONAL UNION FIRE INS. CO. v. LASSETTER ET AL.

6 Div. 11.

Supreme Court of Alabama

March 31, 1932

Rehearing Denied May 19, 1932.

Appeal from Circuit Court, Jefferson County; Wm. M. Walker, Judge.

Bill to reform a contract of insurance by W. O. Lassetter and W. B Lassetter, as partners doing business as the Lassetter Lumber Company, and individually, against the National Union Fire Insurance Company and Fred Miller. From a decree for complainant, respondent Insurance Company appeals.

Affirmed.

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

Harsh Harsh & Hare, of Birmingham, for appellees.

GARDNER J.

The prime purpose of the bill is the reformation of a fire insurance policy issued May 25, 1928, by defendant company for the protection from fire of the house therein described situated on lot 15, block 14, Crescent Heights, Birmingham Ala. The bill is by the partners, two brothers W. O. and W. B. Lassetter, doing business under the firm name of Lassetter Lumber Company. The partnership was engaged in selling building material and construction of houses.

It appears from the proof that the lot was purchased and the house constructed from funds of the partnership. The contract for the purchase was, however, with W. O. Lassetter, who joined as a party complainant, and the evidence is to the effect that it frequently occurred that in such a purchase the title would for convenience be taken only in the name of one of the members of the firm. Proof, therefore, that the property was purchased for partnership purposes and with partnership funds is proper for the establishment of a resulting trust therein in behalf of the firm, and works no offense against our statute of frauds (Rudulph v. Burgin, 219 Ala. 461, 122 So. 432; Moss v. Winston, 218 Ala. 364, 118 So. 739; Phillips v. Phillips, 223 Ala. 475, 136 So. 785); nor run counter to the cases of Worthington v. Eggler, 210 Ala. 535, 98 So. 788; Hume v. Kirkwood, 216 Ala. 534, 113 So. 613; North River Ins. Co. v. Waddell, 216 Ala. 56, 112 So. 336, 52 A. L. R. 838, cited by counsel for appellant.

There was no occasion for reformation of the deed to W. O. Lassetter or any proceeding concerning the title, as the grantee Lassetter joins as a party complainant, and thereby confesses the equitable title to the property to be in the partnership. The evidence is sufficient to show that the partnership was the equitable and beneficial owner of the property. Defendants' general agent, Chappell, was the original owner and sold to Lassetter lots 15 and 16, block 14. A house was constructed on lot 16, and sold to one Fred Miller, to whom deed was made and who went into possession. Chappell issued an insurance policy on this house also. Complainants were erecting at the same time the house on lot 15 here involved. Chappell's testimony is to the effect he was given instructions by one Moore, who is shown to have been superintending the building of both houses, to issue policies on both houses. Policy was issued and delivered to Miller on the house on lot 16, and Chappell insists that Moore instructed him to make the policy on the house on lot 15 also payable to Miller. This Moore denies.

It appears the policy here in question was kept in Chappell's possession until after the fire. He as agent had paid the premium to the insurance company, but the Lassetter Lumber Company had not paid him within the time agreed, but did so within the time extended by Chappell, but whether this was just after the fire or before remains in doubt. But that was a matter of reimbursement to the agent as the company had been paid, and is not material to any defense here interposed.

There is proof to show that the amount of the premium was charged to the lumber company, and that Chappell demanded payment thereof of said company, and each of the partners. Chappell's testimony is to the effect he issued the two policies at the same time. The policy here involved is made to Fred Miller, just as the one issued to him on his own property. But it is without dispute that Miller owns no interest in this property, either legal or equitable. He had merely worked on the house under Moore at 40 cents per hour, and paid for his labor. Otherwise he was an entire stranger thereto.

We think it quite clear, and indeed the recitals of the policy so indicate, that all parties intended to insure the property for the benefit of the owner. That owner is shown by the proof to have been the Lassetter Lumber Company. It is equally clear that Miller had no connection with the property, and to have intended insurance in his name would have been most unreasonable and bordering on the absurd.

The chancellor, who saw and heard the witnesses testify, evidently reached the conclusion that Chappell merely was mistaken and confused on account of the other policy, or misunderstood the conversation regarding the same, and erroneously made the policy on the property of lot 15 payable to Miller, who had no interest therein, instead of to the true owner as shown by the proof. We think the evidence amply justifies this conclusion. We recognize fully the high degree of proof required in cases of this character (Holland Blow Stave Co. v. Barclay, 193 Ala. 200, 69 So. 118; Lipham v. Shamblee, 205 Ala. 498, 88 So. 569; Parra v. Cooper, 213 Ala. 340, 104 So. 827; Dickenson County Bank v. Royal Ex. Assur. of London (Va.) 160 S.E. 13, 76 A. L. R. 1209); but upon a consideration of the whole evidence, we are persuaded the result reached by the chancellor is sustained and the burden of proof duly met.

But appellant insists that though the policy be thus reformed, yet there could be no recovery thereon as complainants are not the sole unconditional owners of the property by reason of the outstanding interest of W. L. Moore. But Moore testifies he had no interest in the property whatever. His agreement with the lumber company was to superintend the building of the houses, the company to furnish all material and pay all the labor, and upon the sale of the property his compensation was to be one-half of the net profit. He assumed no liability and acquired no interest in the property, according to his testimony, and there was nothing in contradiction.

Defendant also pleads in bar of the action a failure to furnish proof of loss within sixty days after the fire. We are inclined to the view the evidence is sufficient to justify the conclusion of a waiver of the strict requirement of this provision, but that question aside and undetermined, the clause is the same as that involved in National Fire Ins. Co. v. Tenn. Land Co. (Ala. Sup.) 139 So. 227, present term, and being pleaded in bar and not in abatement of the action, is not...