Phenix Ins. Co. v. Hilliard

• Court: Florida Supreme Court
• Writing for the Court: WHITFIELD, C.J.
• Citation: Phenix Ins. Co. v. Hilliard, 59 Fla. 590, 52 So. 799 (Fla. 1910)
• Decision Date: 27 May 1910
• Parties: PHENIX INS. CO. v. HILLIARD et al.

52 So. 799

59 Fla. 590

PHENIX INS. CO. v. HILLIARD et al.

Florida Supreme Court, Division A.

May 27, 1910

Rehearing Denied June 17, 1910.

Appeal from Circuit Court, St. Lucie County; M. S. Jones, Judge.

Bill by Charlotte Hilliard and others against the Phenix Insurance Company. From an order overruling a demurrer to the bill defendant appeals. Affirmed and remanded with leave to amend.

Syllabus by the Court

SYLLABUS

Where by inadvertence or otherwise a policy of fire insurance is issued contrary to the intention of the parties thereto, a court of equity may in a proper case reform the policy so as to make it express the real agreement and intention of the parties, and as so reformed to enforce the policy in order to do complete justice in the controversy.

The right to the reformation of an instrument is not absolute but depends on an equitable showing.

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.

The just and reasonable purpose of insurance policies in requiring the insured to have the 'unconditional and sole ownership' of the property insured is to give protection to only those upon whom the loss insured against would inevitably fall but for the insurance, and to avoid taking risks for those whose lack of interest or whose contingent interest in the property insured might tend to encourage carelessness or wrongdoing in the use or preservation of the property. Wager policies are not approved and should be avoided.

A conditional sale of personal property by which the vendee takes possession of the property with an unconditional promise to pay for it, but the vendor retains the title till payment in full of the purchase price is made, confers upon the vendor the absolute right of the purchase price, and imposes upon the vendee the unconditional obligation to pay the purchase price, and also casts upon the vendee all the risks of loss incident to the full and complete ownership of the property, unless otherwise specially provided by contract.

To be 'unconditional and sole,' the interest or 'ownership' of the insured must be completely vested not contingent or conditional, nor in common or jointly with others, but of such nature that the insured must alone sustain the entire loss if the property is destroyed; and this is so whether the title is legal or equitable.

By fair construction and intendment the 'unconditional and sole ownership' of property for the purposes of insurance is in those upon whom the loss insured against would certainly fall, not as a matter of mere contract obligation, but as the result of real bona fide rights in the property insured.

Where the insured and the insurer agree that a policy of insurance shall be issued to protect the insured 'according to their respective interests,' and the policy is not so issued, it may be reformed so as to show the real interest of the parties in all the property insured, and as reformed the policy may be enforced.

COUNSEL Geo. M. Robbins, for appellant.

F. L. Hemmings and John E. Hartridge, for appellees.

OPINION

WHITFIELD C.J.

This appeal is from an order overruling a demurrer to a bill in equity brought to reform and enforce a fire insurance policy.

The amended bill of complaint in substance alleges that Charlotte Hilliard was the owner of a certain building used as a sawmill, and also a stock of lumber as her separate statutory property; that she agreed to purchase from the Malsby Company certain sawmill machinery; that in pursuance of such agreement she took possession of the machinery and placed it in said building; that she paid $150.90 in cash on the purchase and gave four notes for the balance; that by agreement between Charlotte Hilliard and the Malsby Company the title to said machinery was reserved in the Malsby Company until fully paid for; that the agreements were made by Charlotte Hilliard for the benefit of her separate statutory property; that Charlotte Hilliard agreed to keep said machinery insured for the benefit of the Malsby Company, and she became the agent of the Malsby Company for that purpose; that she made application to the agent of the Phenix Insurance Company for a policy of insurance to protect her and the Malsby Company against loss by fire of said building, lumber, and machinery; that she informed said agent that she owned the building and lumber, and was buying the machinery from the Malsby Company; that it was not paid for, and the title to the machinery would remain in the Malsby Company until fully paid for; that though the agent was fully advised of the facts he by inadvertence, accident, or mistake issued the policy to Charlotte Hilliard alone and omitted the name of the Malsby Company as the owner of the said engine, boiler, and sawmill machinery; 'and also the fact that the insurance on said boiler and engine and sawmill machinery was for the benefit of the said Malsby Company;' that the premium was paid; that she received the policy from the agent believing it to have been properly prepared and written in accordance with the instructions; that it was the will, intention, and understanding of both Charlotte Hilliard and the agent to enter into a contract that would protect the interests of both Charlotte Hilliard and the Malsby Company 'according to their respective interests;' that the Malsby Company was not informed of the mistake until after the property was destroyed by fire; that the property was burned without the fault of complainants and the defendant, and the policy has not been paid. The prayer is that the policy be reformed in accordance with the alleged intention of the parties and enforced as such, for attorney's fees, and for general relief.

The notes for the balance of the purchase money for the machinery provide that: 'It is a part of the contract of sale that the title shall not pass from Malsby Company until all of said notes are paid; and if the amount of this note, with interest, is not paid at maturity, or in case of the removal of said machinery from the county of St. Lucie or if the said machinery shall not be properly cared for, then the said Malsby Company may declare all our notes at once due and payable, and take possession of said machinery, sell, or dispose of the same privately or publicly, at the discretion of Malsby Company or their authorized agent, and after payment of their debts and all costs, including counsel fees, pay over the remainder, if any, to me. The purchaser from them to receive a good and irrevocable title against me to the...