Tyree v. Va. Fire & Marine Ins. Go

Decision Date16 February 1904
Citation46 S.E. 706,55 W.Va. 63
CourtWest Virginia Supreme Court
PartiesTYREE . v. VIRGINIA FIRE & MARINE INS. GO.

INSURANCE—INSURABLE INTEREST—APPLICATION—FALSE STATEMENTS—CONDITIONS OF POLICY.

1. A husband living with his wife in a house which is on her separate estate has no insurable interest therein.

¶ 1.See Insurance, vol. 28, Cent. Dig. § 153.

2. A false statement by an applicant for insurance to the agent that such applicant is sole and absolute owner of the house, the agent not knowing to the contrary, avoids the policy.

3. An insurance policy provides that, "if the title or interest of assured is less than the entire, absolute, unconditional, unincumbered, fee-simple ownership, " the insurance company shall not be liable under the policy. Such provision is reasonable, and, if the insured has not such title or interest, no recovery can be had on the policy.

(Syllabus by the Court.)

Error from Circuit Court, Greenbrier County; J. M. McWhorter, Judge.

Action by W. F. Tyree against the Virginia Fire & Marine Insurance Company. Judgment for plaintiff. Defendant brings error. Reversed.

Williams & Dice, for plaintiff in error.

Gilmer & Gilmer and Preston & Wallace, for defendant in error.

BRANNON, J. The Virginia Fire Insurance Company issued a policy to W. F. Tyree insuring a house and some furniture. The policy is in Tyree's name. The policy contains a clause that the company should not be liable under it "if the title or interest of assured is less than the entire, absolute, unconditional, unincumbered fee-simple ownership" in Tyree. The land was the separate estate of his wife. He built the house upon it at his own expense, and lived in it with his wife. When Tyree applied to the agent for insurance, Tyree says he said to the agent, "I want my house insured, " but the agent did not interrogate him as to his title. There is controversy only as to the loss from destruction of the dwelling house. The company tendered return of the premium. Tyree brought suit on the policy, recovered verdict and judgment for $1,875 of the $2,000 insurance on the house, and the company brought the case to this court

A vital question is, had Tyree an insurable interest in the dwelling house, it being his wife's separate estate? I am perplexed upon the question. "It has become a fixed rule of insurance law that the assured must have an interest of some kind in the subject-matter of insurance, whether property or life. Two reasons may be assigned for this rule. In the first place, it is inexpedient that a contract so necessary for the protection of legitimate business should be prostituted to illegal uses as a mode of speculation; and, in the second place, it is opposed to public policy, because demoralizing to the insured, that he should be permitted to enter into any contract under which, he would have an interest in the destruction of the subject-matter, rather than in its preservation." 16 Am. & Eng. Ency. Law, 846. "When there is no interest at all to be protected, a policy will be invalid, as counter to the spirit and purpose of the contract, as well as against public policy." "When the insured has nothing to lose, but everything to gain, by the event insured against, it would be dangerous and demoralizing to subject the insured to so great a temptation to destroy the property or the life upon which the insurance is effected." May on Ins. §§ 74, 75. "The question whether the husband has insurable interest in the wife's property must depend in great measure upon the statutes of the several states by which the rights of a husband in the wife's property are governed. If the loss of the property will deprive him of its possession, enjoyment, or profits, or any certain benefits growing out of it, or of a security or lien therein, it would seem that he has an insurable interest in such property. But, on the other side, if the wife's management of her property is not limited; if she may control absolutely its income; if she may lease it without his consent, and her lessee may expel him from possession; if during her lifetime he has no interest, no inchoate rights therein, nor even a right of occupancy, and after her decease his only rights would be acquired by descent, and not inchoate, which would be perfected thereby—he would, on general principles, seem to have no such pecuniary interest in the preservation of her property as would constitute an insurable interest." Joyce on Ins. § 1049. Under this statement it is hard to say that he has an insurable interest in this state. The wife has by statute power to lease, take all rents and profits to her sole use, and the husband has no control over her separate estate, does not take by descent and has no right ofpossession by law during marriage, and has no curtesy initiate. The able jurist Judge Cooley said that, if the husband could insure in his own name his wife's property, "it is manifest that any person may obtain insurance upon property without any right in it whatever. He has but to disclose the facts, and the policy, though only a wager policy, will be as legal as any other. But such a doctrine is at war with the fundamental principles of insurance, which require that a person shall have an insurable interest before he can insure. A policy issued when there is no such interest is void, and it is immaterial that it is taken in good faith, and with full knowledge. The policy of the law does not admit of such insurance, however willing the parties may be to enter into it. The doctrine of waiver has obviously nothing to do with such a case. The agent cannot do for the company by waiver what it is powerless by express contract to do for itself. He cannot, by waiver, invest the insured with an interest he does not own. There was occasion to consider this question In Peoria v. Hall, 12 Mich. 202, and it was held that an insurance of partnership property by one partner in his own name could not be made to embrace the interest of the other partner, though It was written by the agent with full knowledge of the fact. The reason is the one above assigned. It is not competent to write an insurance where an insurable interest is wanting. The difficulty is inherent in the case, and is beyond the reach of waiver. It is proper to say that under our statute the husband has no control whatever over his wife's property; so that the question arises here precisely as it would had the silver been owned by a stranger." So was the decision. Agricultural Ins. Co. v. Montague, 38 Mich. 548, 31 Am. Rep. 326. This holding is sustained by Trott v. Woolwich Co., 83 Me. 362, 22 Atl. 245, holding that a policy issued on a dwelling in the name of the husband when title was in his wife, the company not being informed that he was not the owner, is void. The reasons are fully stated in Clark v. Dwelling House Ins. Co., 81 Me. 373, 17 Atl. 303. "The Married Women's Acts take away from the husband all right to the possession or control of the wife's separate estate. He has no present right of enjoyment, no interest in the rents. A policy of insurance secured thereon by the husband, who has no insurable interest therein, is unenforceable." Traders' Ins. Co. v. Newman, 120 Ind. 554, 22 N. E. 428; Traders' Ins. Co. v. Barracliff, 45 N. J. Law, 543, 46 Am. Rep. 792, is to the reverse. American Central Co. v. McLanathan, 11 Kan. 533, cited...

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