Puritan Ins. Co. v. Yarber, 51419
| Citation | 723 S.W.2d 98 |
| Decision Date | 20 January 1987 |
| Docket Number | No. 51419,51419 |
| Parties | PURITAN INSURANCE CO., Appellant, v. Roy B. YARBER, Patricia A. Massey, and Community Federal Savings and Loan Association, Respondents. |
| Court | Court of Appeal of Missouri (US) |
Philip L. Willman, St. Louis, for appellant, Puritan Ins. Co.
Allen I. Harris, St. Louis, for respondent Roy Yarber.
James M. McClellan, Sikeston, for respondent Patricia A. Massey.
Robert C. Jones, St. Louis, for respondent Community Fed. Sav. and Loan Ass'n.
Puritan Insurance Company (Puritan) petitioned for declaratory judgment alleging defendant Yarber, lessee of a mobile home, did not have an insurable interest as owner in the mobile home-trailer; and Massey as owner-lessor and Community Federal Savings and Loan Association the lienholder and lender to Massey were not named insureds under an owner's policy for a mobile home. The court found for defendants finding them to have an insurable interest and covered under the policy for fire loss and dismissed the insurance company's petition for declaratory judgment. Puritan appeals. We reverse.
The parties submitted to the trial court a stipulation of facts. Since August 11, 1977, Patricia Massey has held a Missouri Certificate of Title to the trailer and since July 25, 1977, Community Federal has been identified on the certificate as the first lienholder. On September 1, 1979, Patricia A. Massey (owner-lessor) and Roy B. Yarber (lessee) entered into a written lease with an option to purchase at a fixed price. Until 1982, Roy Yarber lived in a 1977 Fulton Trailer. Thereafter, until December 5, 1983, Roy Yarber sub-leased the trailer to his son and daughter-in-law. The rental price for Yarber as stated in the lease was "to make all payments on said mobile home to Ferrell Mobile Homes at [the] offices of Community Federal Savings and Loan Association in accordance with the terms and conditions of the note due them secured by said mobile home, or in the alternative and at Lessee's option to allow Lessee to pay directly to Community Federal Savings and Loan Association (hereinafter, Community Federal), the amount of said rental which shall completely satisfy Lessee's obligation to pay rental as herein required." From 1979 until 1983, all payments were made by Roy Yarber to Community Federal.
On April 6, 1983, Yarber purchased from Puritan Insurance Co. an owner's mobile home insurance policy. Roy Yarber, as owner, is the only named insured on the policy. This is the policy which is the subject matter of this law suit. On December 5, 1983, the trailer located in Sikeston, Missouri, was destroyed by fire.
Puritan contends three points on appeal asserting: Massey as owner-lessor, Yarber as lessee and Community Federal as lienholder did not have an insurable interest or were not a named insured in the policy. It claims the trial court erred as a matter of law, in finding an insurable interest.
Puritan contends the trial court erred in finding for lessee Yarber because he can not have an insurable interest as owner in an owner's policy for a trailer under Missouri law if he does not hold title. In a declaratory judgment action we must review both the law and the evidence, bearing in mind the trial court's judgment will not be set aside unless it is clearly erroneous. Hendrickson v. Cumpton, 632 S.W.2d 512 (Mo.App.1982). This court will sustain the trial court's judgment unless it is against the weight of evidence, or unless the court has erroneously declared the law or applied the law. Willhite v. Marlow Adjustment, Inc., 623 S.W.2d 254 (Mo.App.1981).
Puritan relies on Faygal v. Shelter Ins. Co., 689 S.W.2d 724 (Mo.App.1985) for the proposition that Missouri courts have consistently held, by reason of § 301.210 RSMo 1978, that even if accompanied by full payment or physical delivery of possession, the attempted sale of an automobile (or trailer) is fraudulent and void, passing neither legal nor equitable title, unless as a reasonably contemporaneous part of the transaction, the previously issued certificate of ownership, with a properly completed and acknowledged assignment by the seller, is delivered to the buyer. Faygal, 689 S.W.2d at 726. This view is supported by a substantial public policy argument. In the case at bar Yarber had a lease with an option to purchase the trailer. He did not exercise the option before a fire destroyed the trailer. He did not fulfill the requirements of § 301.210 RSMo 1978 so as to assert an ownership interest. Puritan therefore contends the failure to fulfill the requirements of § 301.210 prevents the lessee from recovering as an owner and so named as insured in an owner's policy.
The requirements of § 301.210 are an attempt to prevent fraud and deceit in the re-sale of cars and trailers thereby hampering traffic in stolen vehicles. This police regulation must be strictly enforced in order to accomplish the legislative purpose. Faygal, 689 S.W.2d at 726. To allow an individual to secure ownership without a certificate of ownership will allow the same individual to insure an automobile or trailer obtained through fraudulent means, even if the means was unknown to the possessor. This would certainly frustrate the purpose of the statute. We also note that if a lessee can insure as an "owner" then sub-lessees could also insure as "owner." This would open the door to coverage of the same value or loss by multiple claimants.
Faygal, 689 S.W.2d at 727 (citations omitted).
Yarber does not dispute the law as articulated in Faygal and similar cases cited by insurer. Rather, Yarber contends these cases are inapplicable for he is not a putative owner, but a lessee having "valuable property rights which may be insured." We agree with Yarber that he has property rights which may be insured. However, as a lessee his rights do not rise to the same interest as an owner and he only purchased a policy to insure his loss as an owner.
"[G]enerally a person has an insurable interest when he has such a relation or concern with the subject matter insured that he will derive pecuniary benefit or advantage from its preservation or suffer pecuniary loss or damage from its destruction." Lumbermens Mutual Insurance Company v. Edmister, 412 F.2d 351, 353 (8th Cir.1969). (Citation omitted).
[An insurable interest] may be a special interest entirely disconnected from any title, lien, or...
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