Royal Ins. Co. v. Smith

• Decision Date: 04 February 1947
• Citation: 29 So.2d 244,158 Fla. 472
• Parties: ROYAL INS. CO., Limited, v. SMITH.
• Court: Florida Supreme Court

29 So.2d 244

158 Fla. 472

ROYAL INS. CO., Limited, v. SMITH.

Florida Supreme Court

February 4, 1947

Rehearing Denied March 14, 1947.

Appeal from Circuit Court, Citrus County; F. R. Hocker judge.

Reeves Allen & Johnson, of Tampa, for appellant.

W. Robert Smith, of Ocala, for appellee.

FABISINSKI Associate Justice.

This appeal is from a decree reforming and enforcing a fire insurance policy.

On September 25 1940, the property insured was conveyed by warranty deed to the appellee by other children and heirs of the deceased father of appellee. The deed was recorded on July 3, 1944. There is no issue made on appeal that the fact that the deed was not of record at the time of issuance affected the insurable interest of appellee, and the authorities are, so far as we have found, unanimous in holding that the failure to record the title papers of insured prior to the issuance of a policy does not affect the warranty as to sole and unconditional ownership.

At the time of the acceptance of the deed by appellee, fee simple title to the lands upon which the insured improvements were erected, was vested in the Trustees of the Internal Improvement Fund under the Murphy Act, Acts 1937, c. 18296, by reason of the failure of the former owner to pay taxes for certain years, and as the result of which failure the lands were certified to the Treasurer of the State of Florida, in 1928 and 1934.

The insurance policy was issued on February 26, 1941. The loss occurred on June 22, 1941. Appellee obtained title from the Trustees of the Internal Improvement Fund on June 19, 1942.

By its 'Eighth Defense' in its answer the appellant raised the question of ownership of the property by appellee, evidently in ignorance of the unrecorded deed. By a 'Ninth Defense,' the issue of breach of warranty, on the theory that fee simple title was vested in the Trustees of the Internal Improvement Fund, was presented. Motion to strike these two defenses was seasonably made and granted. However the testimony offered by the appellant to sustain these defenses is before us, although some parts of it were not considered in evidence by the chancellor.

We are first called on to consider whether the interest of appellee in the property was other than sole and unconditional ownership within the meaning of the policy issued thereupon.

It is conceded that at the time the appellee acquired title by warranty deed from the other heirs, his title was defective, because under the provisions of the Murphy Act, title had vested in the Trustees of the Internal Improvement Fund, and under the terms of that Act, no right of redemption remained in the grantors or their intestate ancestor, the latter having died on June 25, 1940.

45 C.J.S., Insurance, § 522, p. 254, summarizes the law on this subject as follows:

'Forfeiture for nonpayment of taxes. It has been held that, where the title to the property is in the state under a tax sale, insured is not the unconditional and sole owner, although the property is subject to redemption, but the contrary has been held where insured was in possession of the property.'

The case cited in the note to the first proposition unqualifiedly sustains the text (Perrin v. Stuyvesant Ins. Co., 140 La. 812, 74 So. 110), but that cited under the second proposition turns on a question of evidence, and is inconclusive as an aid to a determination of the question before us. In the latter case the period for redemption had expired.

29 Am. Jur., Insurance, §§ 618, 619, contains the following statement of the law:

'618. * * * The condition in an insurance policy of sole and unconditional ownership does not require a title absolutely good as against the world; it is enough if the insured's interest is sole and unconditional in the generally accepted sense. If one is in exclusive use and enjoyment of the entire estate, under claim of right and without assertion of adverse title by another, his interest is properly described as sole and unconditional ownership, although his title may be defective in some particular. * * *

'619. * * * The sole and unconditional ownership clause is not breached by the fact the property insured is situated upon a government homestead owned and claimed by the insured, in which the legal title remains in the United States Government, and on which final proof is not made until after the loss, which falls upon the homesteader. * * *'

In the latter case the court (Allen v. Phoenix Assur. Co., 12 Idaho 653, 88 P. 245, 8...