Panhandle Oil Co. v. Therrell

• Decision Date: 08 December 1930
• Docket Number: 29029
• Citation: 158 Miss. 810,131 So. 263
• Court: Mississippi Supreme Court
• Parties: PANHANDLE OIL CO. v. THERRELL et al

131 So. 263

158 Miss. 810

PANHANDLE OIL CO. v. THERRELL et al

No. 29029

Supreme Court of Mississippi

December 8, 1930

Division A

Suggestion of Error Overruled, Jan. 19, 1931.

APPEAL from chancery court of Hinds county, First district, HON. V J. STRICKER, Chancellor.

Suit by the Panhandle Oil Company against T. L. Therrell and another. From a decree for the defendants, complainant was granted an appeal. Affirmed.

Affirmed.

Creekmore & Creekmore, of Jackson, for appellant.

In jurisdiction where the loss of a building caused by accident falls upon the vendee the courts necessarily in order to be consistent, hold that if the vendor received insurance money the vendee is entitled in equity, as between himself and the vendor, to demand that insurance be applied on the purchase price, or to the restoration of the property.

27 R. C. L. 559.

Where a lease with option to purchase is executed, and afterwards the building covered by the option is destroyed by fire the plaintiff exercises the option to purchase and thereupon the purchase price is paid and a conveyance made and insurance is payable to the optionor who collected the proceeds, the lessee and optionee is entitled to the proceeds of the insurance.

Peoples Street R. R. Co. v. Spencer (Penn.), 27 A. 113; Williams v. Lilley et ux. (Conn.), 34 A. 765; Schnee et al. v. Elston et ux., U. S. Dailey of Jan. 13, 1930; Camp v. Mfg. Co., 915 S.E. 424, L. R. A. 1918D, 936; Grange Mill Co. v. Western Assurance Co., 9 N.E. 274; Russell v. Elliot, 186 N.W. 824; Carnation Lumber Co. v. Land Co., 103 Wash. 633, 175 P. 331; U. S. F. & G. Co. v. Parsons, 147 Miss. 335.

The rule that the vendor who received insurance money paid to him in settlement of the loss of a building by fire, upon premises sold by him under an executory contract to convey after full payment of the purchase price, holds and retains the same as trustee for the vendee, is a wholesome one, and tends to effect justice between the parties.

Brady v. Welch, 203 N.W. 234, 40 A. L. R. 603; Cetkowski v. Knutson, 204 N.W. 528, 40 A. L. R. 599; Millville Fraternal Order v. Weathersby, 88 A. 847; Brakhege v. Tracey, 13 S.D. 343; Houston Canning Co. v. Virginia Can. Co., 211 Ala. 232, 35 A. L. R. 912; Plumb Lime Co. v. Keeler, 101 A. 509; Baker v. Rushford, 101 A. 769; Camp v. Mfg. Co., L. R. A. 1918D, 936; Phinezy v. Guernsey, 111 Ga. 346.

Watkins, Watkins & Eager, of Jackson, for appellee.

In the absence of contract, neither the vendor nor the purchaser is entitled to the benefit of the insurance taken by the other, but each is entitled to the proceeds only of his own insurance. Unless the policy has been assigned to the purchaser, the right to proceeds of insurance taken out by the vendor for his benefit is in the vendor, and not in the purchaser, although the vendor has parted with all his interest in the property before the loss.

26 C. J., sec. 586, p. 434; Phinizy v. Guernsey, 111 Ga. 346, 36 S.E. 796, 78 Am. St. Rep. 207, 50 L. R. A. 680.

It is well settled, both upon principle and by the authorities, that the contract of insurance is a personal contract of indemnity between the insured and the insurance company alone, which does not inure to the benefit of another party and in which he can claim no interest whatever; and the insured, having collected that which he has purchased and for which he has paid, is under no obligation to account for it.

Demus Investment Co. v. Dickerman, 63 Kan. 728, 66 P. 1029, 88 Am. St. Rep. 265; Plimpton, Executor, v. Farmer's Mutual Insurance Co., 43 Vt. 497, 5 Am. St. Rep. 297.

The result of the rule that the policy does not pass with the property is that the majority of the cases hold that the person who effected the insurance is entitled to retain the proceeds.

Note, 37 L. R. A. 150.

In their very nature, policies of insurance are not incidents of the property. They are contracts between insurers and assured for indemnity of the assured, and not for loss or damages which another person may have sustained because of the destruction of the property, no matter what the interest of that person may be, as mortgagee, creditor, or otherwise. If another person has an interest in the property, he may insure for himself; nor can he set up claim to money which has become due to another, unless the other be his debtor, and the money is garnished or attached.

Home Insurance Co. v. Gibson, 72 Miss. 58; Bernheim v. Bein, 56 Miss. 149; 26 C. J., p. 437; Quarles v. Clayton, Admr., 3 L. R. A. 170; Washburn-Crosby Co. v. Home Insurance Co., 85 N.E. 592; McLean v. Hess, 7 N.E. 567; Shadgett v. Phillips & Crew Co., 31 So. 21; McLaughlin v. Park City Bank, 22 Utah 473, 54 L. R. A. 343; Cromwell v. The Brooklyn Fire Insurance Co., 44 N.Y. 42, 4 Am. Rep. 641; Zenor v. Hays, 228 Ill. 626, 81 N.E. 1144, 13 L. R. A. (N. S.) 909; Kortlander v. Elston, 52 F. 180; Northern Trust Co. v. Snyder, 76 F. 34.

OPINION

Smith, C. J.

The appellant, by means of an original bill, sought to recover from the appellee Therrell and the AEtna Insurance Company a judgment for six hundred dollars and interest. A demurrer to the bill was sustained, and an appeal to this court was granted, to settle the principles of the case.

The bill alleges, in substance, that Therrell leased to the appellant a lot in the town of Florence, on which was situated a filling station, for five years, at an annual rental of two hundred forty dollars per year, the lease contract stipulating that:

"Party of the second part (Panhandle Oil Company) does further agree to deliver the aforesaid property at the termination of this lease contract in the hands of party of the first part in as good state of repair as when received under the terms of this lease contract, saving and excepting wear and tear and ordinary deterioration of the property, and all acts of Providence, such as destruction by...